The U.S. Department of Agriculture (USDA) has unexpectedly cut its forecasts for the coming fall's corn and soybean crop. This revision could force those responsible for carrying the harvests to market to revise their runs and make adjustments for the smaller-than-expected yields, a task that could require carriers to use route planning software.
Lower yields expected
While this year's corn crop is still expected to be the largest ever, the government recently reduced its production estimate by 1.3 percent. Initial forecasts anticipated growers would harvest 13.95 billion bushels in July, this number dropped slightly to 13.763 billion bushels, according to the USDA report. Corn wasn't the only crop that the USDA anticipates will come in lower than expected. Soybeans also saw a drop, with projected output falling from 3.42 billion bushels to 3.255 billion bushels, though the lower yield would still be record breaking.
There are a variety of factors that led analysts to lower their initial forecasts. Environmental factors, such as temperature and rain, played a significant role in the revised numbers.
"Planting of the 2013 corn crop was hampered by abnormally wet and cold spring weather," read the USDA's recent report. "Significant flooding throughout the middle Mississippi Valley during mid-April further added to the frustrations of farmers struggling to get their seed in the ground. By April 28, only 5 percent of the crop had been planted, 44 percentage points behind last year's unusually fast pace and 26 percentage points behind the five-year average."
Soybean planting was also significantly delayed thanks to environmental conditions. According to the USDA report, as of late May, only 44 percent of the intended crop had been planted, a number that lagged 43 percentage points behind the pace seen in 2012.
Adjusting strategies to accommodate lower forecasts
As some farmers cope with lower-than-anticipated yields, they may need to make adjustments in regard to sales, while the carriers responsible for transporting the crops might find it necessary to rework planned routes. This is especially true if they'll be transporting crops from an area from which harvests were much lower than initially projected. Companies may need to revisit their scheduled pickups and deliveries to ensure they are taking the most direct route, especially if certain stops have been eliminated or a driver will be carrying much less cargo than initially expected.