The Corn Economy

Sep 28, 2023

Key Issues: Production

Author: Krista Swanson

USDA recently lowered the national corn yield projection from 175.1 to 173.8 bushels per acre and raised both planted and harvested acres. The increase in acres more than offset the impact of the yield decline, with a 23-million-bushel increase in projected corn production, still rounding to 15.1 billion bushels.   Should we expect further adjustments in corn acres and yields in upcoming reports? This question is on the minds of farmers and industry stakeholders right now. With great variability in early harvest reports, the answer will become clearer as U.S. corn farmers progress to the finish. In the meantime, here’s a look at three historical data relationships to provide historical context.   Path of Projected Planted Acres for 2023 USDA initially projected 92.0 million planted corn acres, based on farmer intentions in March 2023. Farmer surveys of actual planted acres and area remaining to be planted in the first two weeks of June led USDA to raise the projection to 94.1...

Sep 1, 2023

Key Issues: Production

Author: Krista Swanson

Remarkable growth in corn yields has boosted corn productivity in the United States over the past century. While corn production has risen, the land used to grow corn has not. United States farmers planted an estimated 94.1 million acres of corn in 2023, the highest level since 2013.   Despite status as the highest acreage of this decade, it falls short of the more than 100 million acres of corn farmers planted a century ago. In the past decade, U.S. corn production is over six times production of the 1930s with fewer corn acres.   Corn Yields Throughout the 1930’s the average U.S. corn yield was 24.2 bushels per acre, grown on an average of 102.2 million acres for an average production of 2 billion bushels of corn. In contrast, the 2010s brought an average U.S. corn yield of 161.5 bushels per acre, grown on an average of 91.4 million acres for an average production of 13.5 billion bushels of corn. In the decades between, yield grew steadily. On average, the annual increase in...

Aug 10, 2023

Key Issues: Production

Author: Krista Swanson

In the second quarter of 2023, drought was a big concern for corn growers. Despite drought concerns throughout the growing season, the U.S. is on track for record corn production, as of the July projections. While earlier in the season many were expecting corn yields to drop further from the initial trend yield projections, that isn’t as clear now as weather has turned more positive. The outlook for record corn production for 2023/24 is dampening price expectations. The USDA is projecting a $4.80 per bushel market year average price for 2023/24, a drop of $1.80 per bushel from 2022/23. Although the most recent cost of production forecast for 2023 shows relief in farm inputs, higher costs for interest and overhead expenses are keeping the total cost of growing corn elevated. Price expectations for 2023/24 are 27% lower than last year while the total cost of production is only 2.5% lower, putting pressure on farm margins for many corn farmers. Tomorrow USDA will release the August...

Jul 27, 2023

Key Issues: Trade

Author: Krista Swanson

Mexico is an important trade partner and leading export destination for U.S. corn. As Mexico’s domestic use of corn more than doubled over the past decade, the U.S. has helped meet the country's growing demand. Mexico issued a decree in February 2023 calling for the immediate ban on genetically modified (GM) corn in the masa or tortilla flour food sector. The Office of the U.S. Trade Representative (USTR) is in consultations with its Mexican counterparts over the issue. Continued and strengthened trade with Mexico is important to U.S. corn.   In this article, I’ll present a look at Mexico’s corn import needs and changes in trade flow patterns. First up, three takeaways from the analysis, followed by more detail.   Three Takeaways Mexico has made notable reductions in white corn imports from the United States in this marketing year. Through May, U.S. white corn exports to Mexico were 84.5% lower than the same period a year ago. And the U.S. total exports of white corn to...

Jul 5, 2023

Key Issues: Production

Author: Krista Swanson

Fourth of July fireworks weren’t the only eruptions in the nation over the past week – the corn market experienced an upheaval in reaction to unexpectedly high corn acres, weather pattern shifts, and stabilizing crop conditions. In the week from June 26 to July 3, the December 2023 corn futures contract dropped nearly a dollar landing at $4.93. Here is a look at the factors that led to this position and what we may expect ahead.   Analysis of Corn Acres, Weather, & Crop Conditions In their quarterly crop acreage report, USDA raised the 2023 corn planted area estimate to 94.1 million acres, a 2.1 million acre increase from the earlier estimate, and a 6% increase from 2022. The only two years in which corn-planted acres have exceeded the updated 2023 estimate are 2012 with 97.3 million acres and 2013 with 95.4 million acres. In 2016, the U.S. achieved a record corn production of 15.15 billion bushels with 94.0 million planted acres.   Ultimately this level of corn acres...

Jun 2, 2023

Author: Krista Swanson

Now that corn planting is mostly in the rearview, attention turns to growing season climate conditions and what that means for corn production in 2023.   Planting Progress & Crop Conditions The USDA reports 92% of corn is thought to be planted as of May 28, 2023, a notable jump from 81% a week prior and ahead of the 84% five-year average. In most states planting progressed very quickly. In other states, where planting initially progressed more slowly, corn planting has now surpassed or nearly caught up to the five-year average.   With 72% of corn estimated to be emerged, the USDA reported 2023 corn conditions for the first time this week with 69% rated Good or Excellent (G/E) and 5% rated Poor or Very Poor (P/VP). In comparison, the first weekly corn crop condition ratings were 73% G/E with 4% P/VP in 2022, and 72% G/E with 5% P/VP in 2021. The three largest corn producing states – Iowa, Illinois, and Nebraska – all have notably lower estimated G/E as compared with the first...

May 16, 2023

Key Issues: Trade

Author: Krista Swanson

Black Sea Initiative Success & Status The Black Sea Initiative has allowed for the safe export of over 30 million metric tons (MMT) of grain and foodstuffs from Ukraine since initial agreement in July 2022, according to the United Nations. As of May 11, 2023, 50% of the total grain and foodstuffs cargo exported through the program has been corn, the grain most affected by blockages at the beginning of the war. Officials from United Nations, Ukraine, Turkey, and Russia are meeting this week in pursuit of extending the agreement beyond the approaching expiration date on May 18, 2023.   The grain corridor has accounted for 25.2 MMT, or 50% of Ukraine’s 52.9 MMT total grain and oilseeds shipments from July 2022 to March 2023. Three ports on the Danube River provide another increasingly used pathway for grain exports from Ukraine, accounting for 22% of grain and oilseed exports in that time frame. Ukraine now exports 1.5 million tons of grain monthly on the Danube, and expansion of a...

May 4, 2023

Key Issues: ProductionResearch

Author: Krista Swanson

1Q End Report (PDF) 1Q End Report Slides (PDF)    

Mar 31, 2023

Key Issues: ProductionResearch

Author: Krista Swanson

The recent banking fallout and economic comparisons to the 1980s are likely to grab the attention of anyone in agriculture. Fortunately, the general economic environment and financial positioning of farmers is quite different than that period. Here is a look at three key points, with data to assess the current conditions as compared to the 1980s.   Highest Farm Debt Since 1980, But Stronger Farm Solvency   The USDA has forecast total real (inflation adjusted) farm debt at $535.1 billion for 2023, continuing what has been a relatively steady upward trend throughout the 2000s. Up until 2020, farm debt remained below the 1980 inflation adjusted peak of $501.7 billion. Since 2020, farm debt levels have been higher, but near the peak points of the earlier era. The comparison of today’s farm debt levels to 1980 may be concerning, but other important values differ.   In the 1980s, real estate accounted for only half of total farm debt. For 2023, real estate accounts for 70% of total...