With the summer drought, corn prices could average $2.53 per bushel this crop year, according to University of Missouri economists.
As crop conditions deteriorate, prices could reach higher levels than current production. The 2001 crop is expected to average $1.93 per bushel.
The corn price projection by the MU Food and Agricultural Policy Research Institute (FAPRI) is above the mid-point price projected by the U.S. Department of Agriculture in their August 12 crop report.
That USDA report, based on field surveys as of August 1, shows corn yield potential at 125.2 bushels per acre, down from 135.8 bushels per acre in July. Drought and poor growing conditions across much of the Corn Belt cut yields.
"Growing conditions since the first of August have not improved the corn outlook," said Brian Willott, FAPRI crop analyst.
With lower yields, USDA raised the corn price outlook from their July estimate by 50 cents per bushel to a range of $2.30 to $2.70 per bushel.
For soybeans, the FAPRI price outlook of $5.25 per bushel is within the updated USDA price range of $5.15 to $6.05 per bushel. USDA estimated the average soybean yield this year at 36.5 bushels per acre, down from 39.7 bushels in July.
In preparing its ten-year baseline projection last spring, FAPRI added a "stochastic outlook," which involves running 500 scenarios that have random draws on variables including weather, domestic demand, livestock supplies and exports that are based on historical records, Willott said.
The USDA report lowered the total U.S. corn crop to 8.89 billion bushels, down from 9.79 billion bushels in 2001. The USDA August soybean yield projection was 2.63 billion bushels, down from 2.86 billion in July.
Based on the historic scenarios used in the 500 stochastic model runs, the current yield estimate puts this year as a "one-year-in-five drought," Willott said. In Missouri, the most recent drought was in 1999, when the corn averaged 99 bushels per acre.
In looking at the array of outcomes in the 500 computer runs, 92 runs gave yields lower than those forecast by the current USDA outlook, Willott said. For soybeans, 62 of the 500 scenarios were worst than the current bean yield total. "This shows a 13 percent chance of a drought as bad for soybeans as the one this year," Willott said.
Soybean yields can still be helped by August rains, said University of Missouri agronomists. For corn, the yield potential is controlled to a great extent by weather during silking and pollination in July when kernels are set on the cob.
Soybeans continue to flower and set pods with August rains.
USDA field checks showed the second highest number of cornstalks per acre on record. The number of ears per acre, however, was the lowest since 1997.
The mid-August crop report is based on field checks in seven states: Illinois, Indiana, Iowa, Minnesota, Nebraska, Ohio and Wisconsin. It is the first projection of the year based on actual crop conditions. The next USDA report will be September 12.
Last year the harvested U.S. corn yield average was 138.2 bushels per acre. For soybeans, the 2001 crop averaged 39.6 bushels per acre.