Reuters writer Nigel Hunt reported last week that “the International Grains Council (CIG) Thursday raised his forecast for the world corn harvest 2021/22, mainly reflecting the improved outlook for the United States and Ukraine.
“In its monthly update, the intergovernmental body increase its outlook for the 2021/22 world maize (maize) harvest by 7 million tonnes to a save 1.209 billion tons.
World #But (#But) production in 2021/22 is expected to exceed the previous record, set five years ago, with year-on-year production gains expected in a number of key producers, including major exporting countries. pic.twitter.com/t5UhJbdFcQ
– International Grains Council (@IGCgrains) September 23, 2021
“The harvest in the United States, the world’s largest corn producer, was seen at 380.3 million tonnes, up from a previous projection of 374.7 millions but marginally below forecasts from the United States Department of Agriculture 380.9 million issued earlier this month. “
As it concerns Corn exports from the United States, the USDA’s Economic Research Service (ERS) said earlier this month in its Fueling Perspectives report that, “With a higher corn supply forecast this month, U.S. corn exports for 2021/22 expected to be higher, up 1.5 million tonnes to 62.5 million. The United States is currently (seasonally) the world’s least price competitive corn exporter. In addition, its ability to ship grain was affected by Hurricane Ida (at the very end of August) which damaged major export terminals around the Gulf Coast, although port disruptions caused by Hurricane Ida are presumed to be temporary (based on all available information). The increase in corn exports implies greater shipments to Canada and Mexico, the two destinations where grain can be transported by rail and truck, thus avoiding the current disturbances with the Gulf. “
ERS added that, “For the 2020/21 commercial year, US corn exports cut by 3 million tonnes, has a still a record 69.5 million. The decline in price competitiveness and the subsequent slowdown in the pace of exports in August was likely exacerbated by Hurricane Ida at the end of the month. The hurricane’s negative effects are expected to affect September shipments (which marks the end of the 2020/21 international business year). Record exports (revised downward) are 22.5 million higher than in 2019/20. “
In addition to export flows, Hurricane Ida also had a negative impact on the agricultural input supply chain.
Reuters Editors Pj Huffstutter and Mark Weinraub reported last week that, “Ida disrupted Gulf Coast grain and soy shipments, which accounts for around 60% of US exports, at a time when global crop supplies are tight and Chinese demand strong.
Now, the ripple effects of the storm are hampering the production and movement of some fertilizers and agricultural chemicals ahead of the US harvest. This is straining an agriculture and food supply chain already affected by trade and logistics delays during the pandemic.
“Rising input costs threaten farmers’ incomes which had banked on booming profits this year, as crop prices hit their highest level in nearly a decade, after years of stagnating around breakeven points. [Kentucky corn and soybean farmer Caleb Ragland] and other farmers have rethought what they will plant in the spring; crops requiring less fertilizer appear more attractive. “
And Bloomberg writer Elizabeth Elkin reported last week that, “A perfect storm of events – extreme weather conditions and plant closures to new government sanctions – hit the chemical fertilizer market this year, slamming farmers already under pressure from rising food production costs. Prices of urea, a popular nitrogen fertilizer, soared earlier this month in highest since 2012 in New Orleans, the main hub for the fertilizer trade in the United States. A common phosphate fertilizer known as DAP is the most expensive in this market since 2008, Bloomberg data show.
“‘As fertilizer prices continue to rise, farmers will either be to cut application rate, to cut fertilizer entirely in the hope of lower future prices, or to cut other agricultural products to account for the larger expected spending, ”said Alexis Maxwell, analyst at Green Markets, a Bloomberg-owned company. Some are hold on before buying for the next growing season in the hopes that costs will come down – a risk, she said, as prices could continue to rise.
The Bloomberg article added that, “‘We predict this will impact the acreage battle next year.‘said Arlan Suderman, chief raw materials economist at StoneX. Therefore, we are looking for a smaller corn area next year. Suderman estimates the acres of American corn at 91 million, down from 93.5 million this year.