USDA Releases Crop Update

From the USDA:

Corn production is forecast at 12.5 billion bushels, down 3 percent from the August forecast but up fractionally from 2010. If realized, this will be the third largest production total on record for the United States. Based on conditions as of September 1, yields are expected to average 148.1 bushels per acre, down 4.9 bushels from the August 1 forecast and down 4.7 bushels from 2010. If realized, this will be the lowest average yield in the United States since 2005.

Soybean production is forecast at 3.09 billion bushels, up 1 percent from August but down 7 percent from last year. Based on September 1 conditions, yields are expected to average 41.8 bushels per acre, up 0.4 bushel from last month but down 1.7 bushels from last year. Compared with last month, yield forecasts are higher in the Central Great Plains and along much of the Atlantic Coast. If realized, the forecasted yield in Nebraska will be a record high. Yield forecasts are below last month across the Southern Great Plains and portions of the Southeast as hot, dry conditions persisted during August. Area for harvest in the United States is forecast at 73.8 million acres, unchanged from August but down 4 percent from 2010.

All cotton production is forecast at 16.6 million 480-pound bales, up fractionally from last month but down 9 percent from last year. Yield is expected to average 807 pounds per harvested acre, down 5 pounds from last year. Upland cotton production is forecast at 15.8 million 480-pound bales, down 10 percent from 2010. American Pima production, forecast at 737,200 bales, was carried forward from last month.

While energy gets the headlines, the condition of the US agricultural complex is just as important from an inflationary perspective.