This summer's historic drought ravaged corn and soybean production around the U.S. Midwest more than the government is predicting, Pro Farmer said on Friday.
The farm newsletter predicted U.S. corn and soybean harvest would fall below the U.S. Agriculture Department's most recent outlook. If their forecast is realized, the size of both crops would be the smallest since 2003 and would further tighten up world supplies, adding to food inflation around the world.
Pro Farmer estimated U.S. corn production at 10.478 billion bushels, based on a yield of 120.25 bushels per acre. That compares with the U.S. Agriculture Department's latest forecast of a 10.779 billion bushel crop on a yield of 123.4 bushels per acre.
Soybean production was seen at 2.60 billion bushels on a yield of 34.8 bushels per acre. Earlier this month, USDA pegged the soybean harvest at 2.692 billion bushels and yield at 36.1 bushels per acre.
To alleviate dry soils and reach the yield forecasts, soybean fields across the growing region need rain soon, Pro Farmer said.
Pro Farmer released its estimate following its annual crop tour, which surveyed more than 2,200 corn and soybean fields in Midwest states that accounted for 73 per cent of U.S. corn production in 2011 and 66 per cent of soybean production.
"Last year, they were pretty close in a short crop year and they probably have some respect for that," Don Roose, analyst at U.S. Commodities in West Des Moines, Iowa, said in reference to Pro Farmer's view of the crop. "The trade has pretty much been trading a 120 (bushel per acre corn yield) on down right now anyway."
In Iowa, the top producer of both corn and soybeans, Pro Farmer pegged corn yields at 139 per bushels per acre as the corn went through its yield-determining phase of growth in scorching temperatures and parched soils.
"Iowa's early start to the growing season turned into a mid-season nightmare for corn trying to pollinate and fill kernels," a Pro Farmer news release said.
Soybean yields in Iowa were forecast at 41 bushels per acre. Pro Farmer said the state's soybeans were the "least bad" of the western Corn Belt.
Pro Farmer pegged corn yield in Illinois, the second biggest production state, at 139 bushels per acre and soybean yield at 36 bushels per acre.
"The eastern half of Illinois was the epicenter of this summer's drought - and it was proven by this year's Tour." Pro Farmer said.
Corn and soybean prices rose this week — with soybeans posting a 5.2 per cent gain — as reports from the tour trickled in, underlining the damage done by the worst drought in more than half a century.
"After Labor Day, we'll start to see more and more harvest activity and that will drive the market more than anything. We'll be getting actual yield data and everything else," said Karl Setzer, analyst at MaxYield Cooperative in West Bend, Iowa.
Setzer said that Pro Farmer "has a habit of underestimating the crop."