Feedstuff Situation: Corn, Soybean Meal and Hay

USDA-NASS raised their expected corn and soybean yield forecasts in the latest Crop Production report (released August 10th). Their latest estimate is for a U.S. corn yield this year to be record large at over 178 bushels per acre. The latest estimate for soybean yield is 51.6 bushels per acre, the second highest ever. Recent rains in the Midwest could pull the soybean yield to a new record.

Turning to hay, the alfalfa yield per acre will be well above 2017’s (up about 12%), but shy of prior record levels. Alfalfa production was pegged at about 5% above 2017’s. The other hay category (grass hay, etc.) NASS expects the U.S. yield to drop 11% from 2017’s and to be the lowest since the drought of 2012. Other hay production in 2018 is projected to be down 7% year-over-year. The lower other hay output is attributable to the Southern Plains, especially Texas, due to drought. Though recent precipitation in the Southern Plains states and elsewhere may boost hay production compared the latest NASS estimate, the amount of all hay may be only slightly above 2017’s. Importantly, the 2017 national hay crop was the smallest since the devastating drought of 2012

Corn prices are forecast to remain near year ago levels well into 2019. Soybean meal prices are likely to come under increased price pressure as the large 2018 crop materializes. Increased supplies, and hence competitive prices, of cottonseed meal should be available this year, too. In contrast, hay prices, which increased in much of the U.S. compared to a year ago, are likely to remain above a year ago.