In a press teleconference today, environmental analyst and President of Earth Policy Institute Lester Brown cautioned that the U.S. Department of Agriculture has grossly underestimated the decline of the 2012 U.S. corn harvest.
On July 11, the U.S. Department of Agriculture reduced its June 12 estimate of the 2012 U.S. corn harvest from 376 million tons to 329 million tons, a drop of 47 million tons or 12 percent. This drop, one of the largest month-to-month drops on record, sent corn prices climbing.
“Stunning though USDA’s drop in the projected harvest was, it appears to be a gross underestimate of the fall, given the widespread deterioration of the crop,” says Brown. “The actual decline in the harvest will likely be closer to 95 million tons, roughly double the USDA estimate.”
The combination of record temperatures and low rainfall has led to widespread drought. In St. Louis, Missouri, located in the southern Corn Belt, the temperature in late June and early July climbed to 100 degrees or higher ten days in a row. By July 10, the most extensive U.S. drought in half a century covered 61 percent of the country, including much of the Corn Belt.
With this near-record drop in the U.S. corn harvest, Brown says we are looking at a further decline in world grain stocks, rising food prices worldwide, and the potential spread of food unrest. On Thursday’s call he will explain why he thinks USDA is overestimating the harvest.