US corn production is forecast at 10.7bn bushels, down slightly from the September forecast and down 13% from 2011, according to a new crop report from the US Department of Agriculture (USDA). The decline represents the lowest production in the US since 2006.
Based on October 1 conditions, yields are expected to average 122 bushels per acre, down 0.8 bushels from the September forecast and 25.2 bushels below the 2011 average.
If realized, says the report, “this will be the lowest average yield since 1995."
What does this mean for the food industry?
Speaking to FoodNavigator-USA about the impact on food manufacturers and retailers, Symphony Consulting managing director Dr. Krishnakumar Davey said:
“While price increases in the past few months have been slowing down compared to the first half of 2012 and the situation has eased a bit for food manufacturers, summer drought conditions seen this year in most of the country are likely to put upward pressure on food and beverage prices.
“Meat prices are likely to go up in the next three to four months, but we’ll only know in the next few months how the drought will impact food prices next year. I think there is a lot of apprehension about what will happen.”
Click here to read the full USDA report.