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Global warming is worsening the outlook for corn growers in key markets, which could provide a boost to U.S. exporters hoping for a record harvest.
Global corn production is expected to decline this month in regions including Ukraine and the European Union as extreme heat and dry weather puts significant stress on crops, according to a report Monday from the U.S. Department of Agriculture.
Continued dry weather in Europe’s “granaries” has reduced soil moisture and Ukraine’s production is expected to be down 14 percent from last year. Major producers Paraguay and Romania could see production and yields down by up to double digits compared to previous marketing years, according to the USDA.
Unfavorable weather conditions have made U.S. corn prices competitive on the world stage, which could be a bright spot for exporters struggling to process a significant surplus. Last summer’s record harvest, combined with expectations of another bumper crop this year, has fueled a domestic corn glut, weakening farm prices and profits.
U.S. corn production is expected to be down just 1 percent from last year’s bumper crop, with yields expected to hit a record 183.1 bushels per acre. Several major corn-producing states in the Midwest are forecasting record yields, according to the USDA’s National Agricultural Statistics Service.
“You have to go beyond the central Midwest to find real problems with this crop,” USDA meteorologist Brad Lippi told the agency’s radio station. Early heat and drought have hit growing conditions hard across the Southeast, with states like North Carolina reporting “poor to very poor” crops for much of the state.
The decline in global corn supplies has pushed up world prices in all major exporters, but the increase in US corn prices has been minimal. Ukraine’s bids rose 10% last month to $205 per tonne, while Brazil’s and Argentina’s bids have risen $5 and $4 per tonne respectively.
The U.S. bid was the smallest, up $1 to $182 a ton, which the USDA said was “currently the most competitively priced due to expectations of abundant supplies.” Nevertheless, the U.S. seasonal average farm price fell 10 cents to $4.20 a bushel, highlighting the headwinds facing growers as they brace for lower profits.
