The Corn Economy

Aug 15, 2024

Author: Krista Swanson

The United States is a global leader in corn production, producing a record 15.3 billion bushels of corn on 94.6 million planted acres in 2023.    Founded in 1957, the National Corn Growers Association represents nearly 40,000 dues-paying corn growers and the interests of more than 300,000 farmers who contribute through corn checkoff programs in their states. NCGA and its 50 affiliated state associations and checkoff organizations work together to help protect and advance corn growers’ interests.   3Q: NCGA Economic Update

Jul 18, 2024

Key Issues: Ethanol

Author: Krista Swanson

Scott Gerlt, PhD, ASA Chief Economist Krista Swanson, NCGA Lead Economist Katelyn Klawinsky, ASA Economics Intern   The Inflation Reduction Act (IRA), passed in August 2022, created a sustainable aviation fuel tax credit. This tax credit, called 40B due to its section in the IRA, is in effect for 2023 and 2024. The 40B credit amount is based on the carbon intensity from a lifecycle analysis for the specific sustainable aviation fuel (SAF) obtaining the tax credit. As such, lower carbon intensity (CI) biofuels receive a larger tax credit than those with higher CI scores[i].   While SAF can be produced from many different feedstocks, both soybeans and corn are options that can be used at scale. One option to lower the CI of the SAF is for corn and soybean farmers to implement specific conservation practices. Unfortunately, the requirements in 40B for conservation bundling severely limit the ability of producers to provide additional carbon intensity benefits to the 40B program....

Jul 10, 2024

Author: Krista Swanson

Corn farming is one of the largest sectors in American agriculture. In 2023, corn farmers in the United States grew 15.3 billion bushels of corn for grain valued at $73.9 billion. For the 2023/24 marketing year the United States is the world’s largest producer and exporter of corn. The nation’s corn farmers bolster the economy and help build strong communities as evidenced by the results of the Study of the Economic Value of Corn Farming in the United States for 2023.    The contribution of corn farming and linkages extended across 524 different industry sectors in all 50 states. Corn farming for grain generated an estimated $151 billion in total economic output in 2023, with an estimated contribution of $62 billion to Gross Domestic Product (GDP), making the industry an essential contributor to the nation’s agricultural and economic value chain. Driving the creation of over 600,000 jobs and providing $35 billion in wages, corn farming strengthens communities in rural America and...

Jul 8, 2024

Author: Krista Swanson

Challenges in Farm Country Large on-farm stocks, coupled with the latest corn acres projection, add downward pressure on already below break-even prices. The United States Department of Agriculture (USDA) released two major reports and another key dataset in the second half of June. Together these pieces of information add clarity to the challenges corn farmers are facing right now.   The June Stocks Report The UDSA June Stocks Report provides an estimate of the total corn held in commercial storage facilities and by producers on their farms as of June 1. For 2024, USDA estimates total U.S. corn stocks at 4.993 billion bushels, 21.7% higher than a year ago. Aside from the years 2017 to 2020, when the country experienced trade wars and COVID ravaged the world, this is the highest total stocks level since 1988.   Even more notable was the increase in corn on farms. The report shows farmers have 3.026 billion bushels of corn in possession as of June 1, 2024. This is 36.5% more...

Apr 30, 2024

Author: Krista Swanson

The United States is a global leader in corn production, producing a record 15.3 billion bushels of corn on 94.6 million planted acres in 2023.    Founded in 1957, the National Corn Growers Association represents nearly 40,000 dues-paying corn growers and the interests of more than 300,000 farmers who contribute through corn checkoff programs in their states. NCGA and its 50 affiliated state associations and checkoff organizations work together to help protect and advance corn growers’ interests.    NCGA Quarterly Economic Report 2024: 2Q (pdf)  

Apr 8, 2024

Author: Krista Swanson

Motor gasoline use is expected to decline in the future even under a baseline case, but new tailpipe emissions rules really put the pedal to the metal – rapidly accelerating that process. This would be a major shock on demand for corn used to produce ethanol spurring potentially devastating impacts on farmers and the rural economy.       The New Tailpipe Emissions Rule The Environmental Protection Agency recently released its final rule for multi-pollutant emissions standards for model years 2027 and later light-duty and medium-duty vehicles with heavy reliance on the use of electric vehicles. The ruling dictates that sales of non-electric vehicles will drop from over 92% of new vehicle sales in 2023[i] to under 30% of new vehicle sales in 2032. In the EPA central scenario, that translates to a 6.9-billion-gallon reduction in motor gasoline use in 2032, a 5.7% decline from the baseline projection for that year. Motor gasoline use is expected to decline in the baseline, but...

Feb 16, 2024

Key Issues: Production

Author: Krista Swanson

USDA released the Grains and Oilseeds Outlook this week providing an initial look at the 2024/25 marketing year projections that include lower production, greater domestic use, increased exports, and higher ending stocks as compared to the current 2023/24 market years. The following is a summary and some additional context for five projections from the latest outlook.   Yield Corn yield is projected at 181 bushels per acre. Yield projections depend on the modeling approach and time series used. While a 3.7 bushel per acre increase over the 2023 record 177.3 bushels per acre may seem like a stretch, a regression on annual yields from 2023 to several different historical points including 1934, 1980, and 1996 all predict 2024 yields within about one bushel of the USDA projection.   Trendline yields are a reasonable expectation at this point. Adverse weather is generally thought to have a negative impact on yields but in 2023 a record yield was achieved in a year with widespread...

Feb 9, 2024

Key Issues: Trade

Author: Krista Swanson

A combination of climate, conflict, and currency values are factors in cost competitiveness that impacts transits and overall U.S. corn exports.   Climate Climate conditions brought widespread drought to the United States Corn Belt in 2023. Dry conditions in the Mississippi River basin led to record low water levels. As a result, barge weight and traffic restrictions were imposed, and the 7.7 million tons of corn moved by barge on the Mississippi River in 2023 was 30% lower than 2022 and 54% lower than 2021. Ultimately, the cost of added time and weight restrictions were factors contributing to a higher corn price at port but also meant pace of getting grain to the port was slowed.   Climate-induced waterway challenges for U.S. corn don’t end at the Gulf. Extreme drought has forced substantial scaleback of shipping through the Panama Canal, a key global maritime channel. The Panama Canal Authority (ACP) has reduced traffic to 24 ships a day, about two-thirds of the normal...

Dec 1, 2023

Key Issues: TradeTransportation and Infrastructure

Author: Krista Swanson

For the second year in a row, drought conditions are impacting transportation on the Mississippi River at the peak shipment point of the year. Shallower river levels mean barge weight restrictions, slower barge traffic, and higher costs to ship commodities on the river. Ultimately, this translates to a relatively lower price at the farmgate and higher cost for the world buyer.   Drought Slows Grain Barge Traffic in 2022 and 2023 The Mississippi River is an important channel for commodity transportation. The USDA reports the final mode of transport was barge for 13% of U.S. grains in 2020, and 46% of exported U.S. grains[i]. There are normally two peaks in grain barge movements, one in late summer leading up to the end of the marketing year for corn and soybeans, and the other emerging in the fall harvest season and into the post-harvest months.   The impact of low water levels on grain barge movements was notable in 2023, marking the second consecutive year of drought...