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US corn production could fall more than expected this season because of the impact of heavy rains on planting and yields, a senior US agriculture official has warned.The US is the world’s largest corn exporter and accounts for 70 per cent of global trade. Any shortfall is likely to push corn prices higher, analysts said.Corn surged to a record high of $6.73 a bushel in Chicago this week, up 45 per cent since January.Mark Keenum, US under-secretary of agriculture, said “extensive rains” in the US Midwest during the planting season, from late April to mid-June, could reduce corn acreage because farmers were unable to access flooded fields, and this would dent productivity.“It could cause even more of a reduction in corn production,” Mr Keenum told the Financial Times.The US department of agriculture has already forecast an 8.1 per cent acreage drop as farmers switch to more profitable wheat and soyabean.Even if dry weather allowed farmers to finish planting their intended acreage, corn yields could still suffer, Mr Keenum said, because plants would not have long enough to develop to withstand the summer’s heat.“It could affect both actual acreage and the quality of the crop,” he said. “We are monitoring it very carefully.”In a sign of the magnitude of the problem, the USDA on Tuesday unexpectedly cut corn yields to 148.9 bushels per acre, down 5 bushels from last year and the lowest since 2005-06.US corn production would fall in 2008-09 to 11.73bn bushels, down 10.2 per cent from last year’s 13.07bn bushels, the USDA said. This reduction reflected slow planting progress, slow crop emergence and persistent heavy rainfall across the corn belt.The fall in production means corn stocks will shrink to 673m tonnes by next summer – the lowest level for 13 years.Analysts fear there could be more bad news. The USDA did not cut its projection for how much land farmers will devote to corn production from May’s estimate of 86m acres.But, because of the heavy rain in the Midwest, about 4m acres of this year’s corn crop has still to be planted and some of the fields that have been flooded may have to be replanted.Lewis Hagerdon, agriculture analyst at JPMorgan in Chicago, said that while it was too early to forecast large acreage or yield losses definitively, “it appears that achieving record levels of production efficiency is increasingly unlikely”.The lower production and the warning of an even larger shortfall come as demand for corn from the biofuel industry increases.The USDA estimates that the biofuel industry will consume about 33 per cent of this season’s US corn crop.Mr Keenum warned that record high oil prices would boost demand for biofuel feed crops, such as corn and soyabeans, even further.By Javier Blas and Chris Flood in London
As in the days of Noah....
