Planted acreage is up, but worldwide popcorn supply expected to remain tight through 2014.

By Dario Bard

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With the Seedmen’s Combined Field Day held in Lafayette, Indiana, and the Popcorn Board releasing the results of its 2013 planting survey, August proved to be an eventful month for the US popcorn industry. As the bulk of the popping corn harvest gets underway, IFT reports on what to expect.

Planting Survey

Participants in the Popcorn Board’s 2013 planting survey reported sowing 184,241 acres with popping corn seed. Although this represents a more than 10% increase over what was reported in 2012, Deirdre Flynn, the Popcorn Board’s Executive Director cautions, “It is not an apples to apples comparison from year to year.” She points out that the survey is voluntary and participants may change and their numbers vary from one season to the next.

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Photo: Richard Duty, Popcorn Board Chair

Popcorn Board Chair Richard Duty adds that the report should not be interpreted as a complete picture of acreage planted. “However,” he says, “you can extrapolate two pieces of information from each year’s report.”

“First, if you look at the folks who participated in this year’s report and look at what they reported for last year’s acreage and look at what they reported this year, it is safe to say that acreage is up to some degree compared to last year.”

“Second, if you look at the reported acres harvested last year and the production in pounds, you can see that yields last year were roughly 3,000 pounds to the acre. That is an important piece of information because in the last 10 years we’ve been issuing this report, we haven’t seen national yields below 4,000 pounds. So the 3,000 pound figure gives you a sense of the impact of last year’s drought.”

“If you estimate in the number of acres that went unreported by non-participants, we should be over 200,000 acres,” says Duty, who characterizes this planting season as average.

Daryl Hunnicutt of Preferred Popcorn, a farmer-owned company in Nebraska, where most of the US. popcorn is grown, estimates the planted acreage for his state is about the same as in 2012.

“There was a strong price incentive to grow more acres of popcorn this year,” says Hunnicutt. “Prices are high because of the decreased production nationwide in 2012 due to drought.”

Duty concurs, noting that the dealer price for popcorn is at a historic high.

“In my estimation, last year we had up to 50% reduction in both the U.S. and Argentina (the world’s top popcorn exporter) in consecutive crops, leading to a worldwide popcorn shortage that in turn resulted in high prices.”

Further, he points out that most of the U.S. popcorn acreage was contracted in February and March, before Argentina’s harvest figures were in and the full extent of the shortage became evident. Based on this, Duty concludes that prices are likely to remain high.

“Hopefully, we’ll get another acreage increase in 2014.”

State-by-state Acreage As Reported To The Popcorn Board

State

2013 Planted Acreage

2012 Planted Acreage

2013 Harvested Acreage (est)

2012 Harvested Acreage

2012 Production (in million lbs)

2012 Purchased

Illinois

10,644

13,572

10,579

12,451

45.4

N/A

Indiana

43,147

40,903

42,904

36,806

83.7

103,580

Iowa

7,499

7,839

7,449

7,757

19.6

N/A

Kentucky

13,511

10,020

13,511

8,720

12

N/A

Missouri

8,031

5,127

7,936

5,109

17.7

N/A

Nebraska

69,703

58015

68,655

54,650

221.9

36,214,120

Ohio

18,484

20,819

18,484

14,473

29.7

1,812,580

S. Dakota

6,584

5,735

6,584

5,395

21.86

122,380

Other*

6,638

4,535

6,624

4,508

6.7

687,699

TOTAL

184,241

166,565

182,725

149,869

458.7

38,940,359

 

U.S. Popcorn Crop Conditions

This year’s Seedmen’s Combined Field Day brought together the largest gathering of popcorn producers Duty has seen in many years. The event was held in Lafayette, Indiana, where Flynn described the mood as optimistic.

Duty says that the crop is in pretty good shape, but he did note two things at the Combined Field Day test plot that led him to readjust expectations: the crop was one or two weeks behind normal maturity and the pollination was spotty.

“They had a heavy rainstorm in July that coincided with some of the pollination dates, so there were ears with blanks in places instead of kernels. It is difficult to say if this is going to be a widespread issue.”

Nonetheless, Duty says, “I don’t anticipate above-average yields considering the condition and lateness of the crop, and the heat and stress we are seeing now.”

Recent weeks have seen heat and dry conditions in the heart of the corn belt. “In the states of Iowa, Illinois and Indiana, we’ve seen field corn come down from excellent to good to fair in a significant way over the last few weeks,” informs Duty. “I think we might see some yields compromised because of it.”

In Nebraska, where fields tend to be irrigated, the onset of hot dry weather is less of a concern.

“Irrigation helps with a consistent yield,” says Hunnicutt. “Except for some areas that had hail and wind damage, the crop is looking really good this year. The rainfall has been spotty here, but we’ve gotten more rain this year than last year, so we haven’t had to irrigate as much, and that obviously helps. This week, we are hot and dry with above normal temperatures, but our irrigation will get us through this hotter period.” He anticipates Nebraska will deliver above-average yields this year.

U.S. Popcorn Stocks

“Right now, we have a historically tight popcorn inventory,” says Duty. “Argentina has some new crop product that they are selling and shipping, but here in the U.S. we are next to out. When the new crop comes in, mostly in September and October, the pipeline will be basically empty. I don’t see any relief in sight till November at the earliest.”

Duty sees a need for big crop years from both the U.S. and Argentina to rebuild supplies and return prices to “what I call a more natural level.” This might have to wait another year; Argentina’s last harvest was slightly below average.

“We are certainly not going to have a bumper crop here in the U.S.,” says Duty.

External Markets

“Any country that has a large population that is gaining in personal disposable income and is able to go to the movie theaters and enjoy popcorn is a potential market for us,” says Hunnicutt; Preferred Popcorn exports popcorn to 57 countries, including Mexico, Japan and China.

Duty seconds this assessment: “Popcorn is a snack food purchased with discretionary income, so any market with a growing middle class has potential.” Both Hunnicutt and Duty point to India and China as examples, two nations that are currently on the Popcorn Board’s radar.

“Exporting to India is a challenge for U.S. processors because, not only does India have 56% custom duties, it also requires that food shipments be treated with methyl bromide before being allowed off the dock and into the country,” says Flynn. Methyl bromide was phased out in the United States in 2005 in accordance with the Montreal Protocol to reduce the use of ozone-depleting agents.

“This has become a real trade barrier for U.S. popcorn going into India,” says Duty. “We are seeing demand grow in India. It is an important market but we are having difficulty getting our product in.”

The Popcorn Board hopes, however, that it can follow in the footsteps of the pea and lentil industry, which has secured a recurring six-month methyl bromide exemption from the Indian government. The uncertainty created by an agreement that has to be renewed every six months makes it a less than ideal solution, but, as Duty puts it, “It is better to have a six-month waiver and be able to do business than to not have it and not be able to get your product into the country.”

With respect to China, the Popcorn Board is contracting a private firm to conduct market research into snacking preferences and cultural attitudes towards snacking. “The idea is to discover where popcorn would fit in,” says Flynn, “whether it be the grocery story, movie theaters, street vendors, etc. Once we have those findings, we can build promotions from there.”

The Popcorn Board continues to develop markets in Costa Rica, Mexico and Southeast Asia, as well.

U.S. Popcorn Harvest Begins

Flynn expects the bulk of the harvest to be completed by the end of September. And although the crop is late, Duty doesn’t anticipate that early frost will be an issue.

“The popcorn belt is far enough south in most of the growing areas; I haven’t heard concerns at this point.” The lateness of the crop, though, may result in the crop being harvested before it reaches full maturity, and that could adversely impact yields.