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 supply and demand report that may bring additional adjustments to the 2023 corn balance sheet.
(Recorded July 17, 2023