The U.S. Department of Agriculture has lowered its estimate of both corn production and ethanol usage of corn for this year.

The latest crop forecast for corn was cut three percent in the August report, due to excessive summer heat that lowered average yields by almost five bushels an acre. The estimate for corn production this year is now 12.5 billion bushels, down 3 percent from the August forecast but would still be the third largest corn crop in history. Yields are expected to average just over 148 bushels/acre, the lowest yield in six years.

With tighter supplies and higher prices, the USDA supply/demand outlook now projects corn usage to be 400 million bushels lower. “Corn use for ethanol is projected 100 million bushels lower with higher expected corn prices and continued weakening in the outlook for U.S. gasoline consumption as forecast by the Energy Information Administration,” according to the report. “The season-average farm price is projected 30 cents per bushel higher on both ends of the range to a record $6.50 to $7.50 per bushel.”