Smallest US Corn Crop Since 2019 Signals Higher Food Costs Ahead

(Bloomberg) — The US is set to harvest its smallest corn crop in three years, dashing hopes that one of the world’s largest agricultural exporters would give some relief to a global grain supply crunch and a break on higher food prices.

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The corn harvest in the world’s biggest producer will total 13.759 billion bushels, according to estimates Friday from Farm Journal Inc.’s agricultural marketing arm, Pro Farmer. That’s down 4.2% from the US Department of Agriculture’s estimate of two weeks ago and, if realized, would be the smallest bounty since 2019.

The outlook comes after US spring plantings were lower than expected, with farmers keeping more land out of production than anticipated. Pro Farmer sees average corn yields at 168.1 bushels an acre, 4.2% below USDA’s outlook.

All of this points to an American harvest that will disappoint those who had been hoping for some relief from mounting food shortages and soaring prices. Buyers had been anxiously awaiting word on the US harvest because a large chunk of the world’s grain has been tied up with Russia’s invasion of Ukraine. With dry weather and extreme heat hurting plants across the Midwest, it’s becoming less and less likely that the US will be able to fill those supply gaps.

Corn is key to the global food supply and is the most dominant crop in the US. It’s a versatile grain that feeds both humans and livestock and is used to make ethanol to help fuel cars. Corn also provides a base for starch, corn syrup, sweeteners and alcoholic beverages.

The forecast is critical for agricultural markets in assessing the US harvest and understanding whether there will be relief from food inflation. The findings follow this week’s Pro Farmer Crop Tour in which growers, traders, government statisticians and reporters fanned out across seven of the top corn- and soybean-producing US states to inspect fields.

Pro Farmer results were decidedly underwhelming in the parts of the crop belt hampered by some of the worst drought conditions in at least a decade. Fields in Illinois and Indiana fared better, but not enough to offset losses in the west.

“The question heading into Crop Tour was whether there would be enough bushels in the eastern Corn Belt to offset the bushels lost in the drier western areas,” said Brian Grete, editor of the Pro Farmer newsletter. “The answer is clearly there won’t be enough in the east to offset the west, not nearly enough.”

The soybean harvest is forecast by Pro Farmer to be a record 4.535 billion bushels, slightly above USDA’s estimate, while yields of 51.7 bushels an acre are just below USDA’s outlook.