The Corn Economy

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...

Mar 17, 2023

Key Issues: TradeProductionResearch

Author: Krista Swanson

Phosphorus, an essential nutrient for plant growth and development, is important for corn productivity. Farmers use fertilizers to replenish phosphorus and other nutrients in the soil to maintain healthy and fertile land, but vital fertilizer management comes at a high cost. This is especially true for corn producers, particularly right now.   Since 1996, average annual fertilizer costs were about one-third of total operating costs incurred in growing a corn crop. For 2023, the United States Department of Agriculture (USDA) projects fertilizer to make up 46% of the total operating costs incurred by the U.S. farmer in growing a corn crop, unchanged from 2022, but up from 37% for the 2021 crop and 35% for the 2020 crop. Aside from 2008, the current fertilizer-to-operating-cost ratio is at the highest point since the 1970s.   Compared to other major commodity crops, corn not only has the highest fertilizer costs in dollar value, but also the highest fertilizer-to-operating-cost...

Feb 24, 2023

Key Issues: TradeProductionResearch

Author: Krista Swanson

The United States Department of Agriculture’s (USDA) annual Agricultural Outlook Forum began yesterday with a 2023 Agricultural Economic & Foreign Trade Outlook by Chief Economist Seth Meyer. The USDA coincidingly released the 2023 Grains and Oilseeds Outlook. This provides a near-term update to the USDA Long-Term Projections Report. The report was released earlier this month but used a baseline set in October 2022. Highlights from the USDA Ag Outlook Forum for corn center on new forecasts for acreage, yield and production, price and use.   Acreage Projections for 2023: USDA provided an update to planted acres for major commodity crops. Although the economic-based approach for these estimates differs from the farmer-based survey responses used for the upcoming March 31st Planting Intentions Report, it provides insight into what we may expect. Corn is projected on 91.0 million acres. This is a reduction from the October 2022 baseline projection of 92.0 million acres, but up 2.4...

Feb 10, 2023

Key Issues: EthanolHigh-Octane Low-CarbonProductionResearch

Author: Krista Swanson

Projected corn ethanol use for the 2022/23 marketing year declined by 25 million bushels from last month, according to this week’s UDSA World Agriculture Supply & Demand Estimates report. As the only change on the supply or demand side of the corn balance sheet, it resulted in a corresponding increase of 25 million bushels in projected corn ending stocks for the current marketing year.   Despite a return to the post-COVID normal in 2022, fuel ethanol produced using corn trailed the years leading up to the 2020 COVID disruptions. From 2017 to 2019, the average annual fuel ethanol production was 15.9 billion gallons, calculated using data from the U.S Energy Information Administration (EIA). After dropping to 13.9 billion gallons in 2020 and recovering to 15.0 billion gallons in 2021, production in 2022 was 15.4 billion gallons. This is 88% of the 17.4 billion gallon per year total of U.S. ethanol production capacity.   The EIA Short-Term Energy Outlook, released earlier this week,...

Jan 13, 2023

Key Issues: ProductionResearch

Author: Krista Swanson

The United States Department of Agriculture released the January World Agricultural Supply & Demand Estimates (WASDE) report yesterday. The expected reductions in use were met with notable changes to U.S. production that resulted in lower-than-expected ending stocks for the 2022/23 marketing year.   As compared to the December WASDE report, a 200 million bushel drop in total production was spurred by a 1.6 million acre cut in final 2022 harvested acres, more than offsetting a one bushel per acre increase in yield to 173.3 bushels per acre. The downward adjustment to 79.2 million harvested acres brings 2022 harvested acres to the lowest level since 2008. This translates to 89.4% of planted corn acres harvested in 2022, the lowest share of planted acres harvested since 2002.   The decline in harvested acres from the December report was highly concentrated in four states, with Kansas (-710,000 acres) and Nebraska (-480,000 acres) accounting for nearly three-quarters of the total...

Dec 22, 2022

Key Issues: ProductionResearch

Author: Krista Swanson

Krista Swanson, the National Corn Growers Association’s lead economist, provides an analysis of a newly published independent study on the accuracy and market impact of USDA information on corn markets.   The United States Department of Agriculture (USDA) collects survey data from farmers that is used as a basis for forecasts in several publicly published reports and databases. Agriculture economists, like me, frequently use USDA information in articles and studies that benefit farmers and our industry.   In recent years growers have raised concerns about the complexity of the survey process, report accuracy and declining survey participation. The declining survey response rates have left USDA with a growing rate of insufficient data not only limiting what can be published, but also limiting ways data can be of value to farmers in return. As an example, when making the 2019/2020 farm program selection, farmers in counties with unpublished 2019 county survey yields, which would...