Drought in the Corn Belt is concerning
July 22, 2023
The June Acreage report released the end of June by USDA-NASS brought some good news for livestock producers. The report places the total U.S. planted corn acreage at 94.1 million acres. USDAs latest estimate for 2023 corn acreage is 2.3% higher than their previous estimate and 6.2% percent higher than the last year’s acreage. All top 5 corn states had an increase in corn acreage except for Nebraska, which had a 1.0% decline in acreage for corn.
The relevance of the June Acreage report for livestock producers is the impact acreage will have on feed prices. While the report brought good news regarding corn acreage, there are still concerns regarding total corn supplies for the 2023-2024 crop. These concerns are about drought and its impacts on corn yields. Even small weather-induced yield declines could result in significant price swings for corn.
The map shown above is the latest U.S. Drought Monitor for the region classified as the Midwest. Currently, 87.8% of the Midwest is categorized in D0-D4 drought. Compare that to a year ago when 50.9% of the Midwest was in D0-D4 drought. The big difference between this year and last is the more severe drought categories. Last year only 1.5% of the Midwest was in D2-D4 drought (severe to exceptional drought). The most recent drought map has 24.9% of the Midwest categorized as D2-D4 drought.
Cattle markets are expected to remain strong through the remainder of 2023 and into 2024. However, many people have noticed that profitability is not as strong as it was during previous years of high cattle prices. Costs are still a big problem for many producers. Part of that cost is feed prices, and the drought impacting the major corn-producing states is a slight cause for concern. Overall, though, most agree there’s more to be optimistic about in the cattle industry.