Corn

Corn Consumption Exceeds Expectations, Now What?

January  2016

 

 

Corn research and development efforts continue to pay dividends as we work together to bring solutions that maximize yield potential and return on investment for growers throughout the Americas and the world.

 

Water utilization is top of mind with many growers, particulrly after the record-setting drought in the central U.S. last summer. Corn seed breeders continues to invest in both native and genetic drought tolerance research with the goal of building corn hybrids with more consistent yield under moisture stress.

 

Dow AgroSciences contends their corn research and development is paying off for farmers which is what has driven the sales figures.

Some of the success seem to be related to hybrids with SmartStax trait technology and some other success is related to dought-tolerant hybrids.  

The ethanol magin is the difference between the market price of ethanol and its cost of production adjusted by the value of co-products is a measure of the profitability of producing ethanol.

 

Between October 2012 and January 2013 the ethanol margin for producers was close to zero. The recent reduction in corn prices had a major impact on the profitabliity of ethanol production because purchased corn is by far the largest cost incurred by ethanol producers.  On average one bushel of corn use to produce 2.8 gallons of ethanol.

 

Improved margins have incentivized greater levels of ethanol prodution with output recovering to pre-drought levels. At the same time, lower prices have made ethanol more economically attracive for refinery blending and output of ethanol-blended gasoline has risen.

 

Net use of ethanol by refiners and blenders reached an all-time high of 884,000 barrels per day in August 2013.  

The number of acres harvested in 2013 is projected to be 35.3 million (87.2 mil/ac). This is 0.1 mil/ac (0.2 mil/ac) less than in 2012, yet the second largest number of acres for the last 80 years.

 

Total U.S. corn production for 2013 isprojected t be 355.3 mmt. (13,989mil/bu). This is about 81.5 mmt (3,209 mil/bu) higher than 2012 and the largest U.S. corn crop on record.

 

Despite the slightly lower harvested acres in 2013 than 2012, the projected recod total production in 2013 was due to significantly higher yields in the key U.S. corn production areas.

 

Corn production in Iowa, Illinois and Nebraska increased significantly from 2012 o 2013, while Minnesta corn production was slightly lower in 2013 compared to 2012.

 

Other than North Dakota, corn pruction in the remaining eight states was higher in 2013 than in 2012. 

Around 80 million acres of land are planted to corn, with the majority of the crop grown in the Heartland region.

 

The U.S. is a maor player in the world corn trade mrket, with approximately 20 percent of the corn crop exported to other countries.