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Organic corn returns exceed those from conventional

Thursday, September 1, 2016

In 2010, U.S. producers saw average returns of $307 per acre for conventional corn, compared with $557 per acre for organic corn, primarily because higher organic corn prices more than offset lower organic corn yields. Total operating and ownership costs per acre (seed, fertilizer, chemicals, custom operations, fuel, repairs, interest, hired labor, capital recovery of machinery and equipment, taxes, and insurance) were not significantly different between organic and conventional corn, although many of the individual cost components differed. Three major components of operating costs?seed, fertilizer, and chemicals?are lower for organic corn than for conventional corn, while some components of ownership costs?the capital recovery of machinery and equipment, and taxes and insurance?are higher for organic corn. Although the acres planted to organic corn nearly tripled between 2001 and 2010, organic corn accounted for less than 1 percent of total 2010 corn acres.? Find this chart and additional analysis in Characteristics and Production Costs of U.S. Corn Farms, Including Organic, 2010.

Global stocks of major crops rising

Thursday, September 1, 2016

Global stocks of major crop commodities are forecast to expand in the 2014/15 marketing year, with total stocks of wheat, rice, corn, and soybeans completing recovery from the relatively low levels that preceded the 2008 spike in world crop prices. Record U.S. crops of corn and soybeans, along with good harvest by some other major producing countries, are forecast to push both U.S. and global stocks of these commodities to record levels. World wheat stocks are forecast to rise based on the outlook for record or near-record harvests by major foreign producers, including China, the EU, India, and the Former Soviet Union. While world rice stocks are forecast below peak levels of the early 2000s, good harvests and ample stocks are expected across the major producing regions in Asia. The supply outlook is expected to lead to lower commodity prices, with the average U.S. farm prices of corn (-24 percent), soybeans (-23 percent), wheat (-14 percent), and rice (-10 percent) all forecast down in their respective 2014/15 marketing years compared with 2013/14. Find additional analysis in the current editions of Feed Grain Outlook, Oil Crops Outlook, Wheat Outlook, and Rice Outlook.

Corn production in Brazil is expanding

Thursday, September 1, 2016

Since 2000/01, corn production in Brazil has doubled, reaching a record 85 million metric tons in 2014/15, equivalent to 8.4 percent of global corn production. Corn is now Brazil?s second largest crop (after soybeans), accounting for 20 percent of planted area, and Brazil is the world?s second largest corn exporter, behind the United States. Due to a favorable climate and long growing season, double-cropping is possible in much of the country, and the majority of corn in Brazil is harvested as a second crop planted after soybeans. Technological advances in soil management and improvements in hybrid corn varieties have supported this expansion. The second-crop corn harvest largely serves the export market, putting it in direct competition with the timing of the U.S. corn harvest. This chart is from the ERS report, Brazil?s Corn Industry and the Effect on the Seasonal Pattern of U.S. Corn Exports, released on June 15, 2016.

United States has lost corn export market dominance

Thursday, September 1, 2016

For most of the last century, U.S. corn accounted for between 50 and 75 percent of world corn exports, but over the last decade the United States has lost its dominance in world corn markets. The U.S. ethanol program provided underlying support for corn prices after 2005 and, together with rising global feed demand and policies in some foreign countries, encouraged expansion in foreign corn production, with Brazil and Ukraine notably successful. In 2012/13 (October/September), with several years of below trend U.S. yields compounded by severe drought, foreign corn has become increasingly competitive in world markets. U.S. corn export market share is forecast to fall to less than 20 percent in 2012/13.? With record U.S. corn production projected for 2013/14, U.S. export share is expected to increase and the United States is expected to return as the largest exporter. But the U.S. market share is forecast to remain well below 50 percent, while Brazil, Ukraine, and Argentina are each forecast to account for 15 to 20 percent of world corn trade. This chart is adapted from the Feed Grains Chart Gallery.

China's corn yields continue to lag behind U.S. yields

Thursday, September 1, 2016

Data sources indicate that China?s corn yields continue to lag behind yields achieved in the United States (the world?s leading producer) with implications for China?s ability to meet future corn demand through domestic production. Both China?s official yield estimates provided by the National Bureau of Statistics (NBS) and alternative survey-based estimates provided by China?s National Development and Reform Commission (NDRC) show China?s average corn yields to be both lower and growing more slowly than U.S. average yields. A key factor constraining yield growth in China is slow progress in breeding appropriate varieties to build on past gains achieved from the adoption of hybrid corn. While fertilizer use is already high by world standards, improvements in pest protection and drought resistance?potentially through the adoption of genetically modified varieties?may offer yield gains.? Current USDA corn supply and demand projections for China indicate that demand is likely to outpace production, leading to expanding corn imports.? Find this chart and additional analysis in Prospects for China?s Corn Yields and Imports.? ?

Import restrictions begin to curtail growth in U.S. feed exports to China

Thursday, September 1, 2016

With record shipments so far in 2013/14 (September/August marketing year), China has emerged as a major buyer of U.S. feed grains, but this trade is now being disrupted by China?s rejection of U.S. shipments containing unapproved genetically modified (GM) material. U.S. corn exports to China have reached 4.0 million tons so far in 2013/14 and China has also, for the first time, initiated large-scale imports of U.S. sorghum, with imports of 2.3 million tons in the first 7 months of 2013/14. China has become the largest U.S. export market for distillers dry grains with solubles (DDGS, a byproduct from production of corn-based ethanol) with sales to China of 2.8 million tons in 2012/13 and 4.0 million tons so far in 2013/14. Feed sales to China are being driven by the continued expansion of meat and feed consumption, high Chinese corn prices, and demand by animal product producers for cost-efficient feed ingredients.? Until recently, China?s trade policies have helped channel demand toward DDGS and sorghum, which face relatively low tariffs and?unlike corn?are not subject to import quotas. But, so far in 2013/14, China has rejected about 1.1 million tons of U.S. corn and DDGS containing unapproved GM material, specifically the MIR 162 strain, and other shipments have been cancelled or diverted to other destinations. More recently, China has halted issuance of licenses for imports of any U.S. DDGS.? These developments place prospects for U.S feed grain exports to China in 2013/14 and beyond in question. For further analysis, see China?s Market for Distillers Dried Grains and the Key Influences on Its Longer Run Potential.

Changes in U.S. double-cropped acreage roughly mirror commodity prices

Thursday, September 1, 2016

Double-cropped acreage has varied from year to year. Because decisions about double cropping are made annually, fluctuations are likely as farmers respond to changing market and weather conditions. For example, higher commodity prices give farmers more incentive to intensify production and could offset revenue shortfalls from lower potential yields when double cropping. From 2004 to 2012, total double-cropped acreage roughly paralleled soybean, winter wheat, and corn prices. When commodity prices at the time of planting decisions were increasing or relatively high, total double-cropped acreage also increased. Total double-cropped acreage peaked at 10.9 million acres in 2008, when prices for soybeans, winter wheat, and corn also peaked. In 2005 and 2010, nearly every region witnessed declines in double-cropped acreage amid commodity price declines. This chart is found in the ERS report, Multi-Cropping Practices: Recent Trends in Double-Cropping, EIB-125, May 2014.

Most U.S. corn acres at risk of nitrogen losses to the environment

Thursday, September 1, 2016

Corn is the most widely planted crop in the U.S. and the largest user of nitrogen fertilizer. By using this fertilizer, farmers can produce high crop yields profitably; however nitrogen is also a source of environmental degradation when it leaves the field through runoff or leaching or as a gas. When the best nitrogen management practices aren?t applied, the risk that excess nitrogen can move from cornfields to water resources or the atmosphere is increased. Nitrogen management practices that minimize environmental losses of nitrogen include applying only the amount of nitrogen needed for crop growth (agronomic rate), not applying nitrogen in the fall for a crop planted in the spring, and injecting or incorporating fertilizer into the soil rather than leaving it on top of the soil. In 2010, about 66 percent of all U.S. corn acres did not meet all three criteria. Nitrogen from the Corn Belt, Northern Plains, and Lake States (regions that together account for nearly 90 percent of U.S. corn acres) contribute to both the hypoxic (low oxygen) zone in the Gulf of Mexico and to algae blooms in the Great Lakes. This chart is based on data found in the ERS report, Nitrogen Management on U.S. Corn Acres, 2001-10, EB-20, November 2012.

The cost of producing corn and soybeans varies across the three leading exporters

Thursday, September 1, 2016

The cost of producing agricultural commodities varies across countries and regions due to many factors, including the quality of resources, climatic conditions, and the cost and availability of necessary inputs. Differences in cost of production help to determine a country?s export competitiveness in global markets, with low-cost producers usually capturing a larger share of global exports. Corn and soybeans are among the most important agricultural commodities traded in global markets, and the United States, Brazil and Argentina are the leading exporters, accounting for a combined 88 percent of world soybean exports and 73 percent of world corn exports between 2008 and 2012. Based on data for 2010 and 5-year average yields, the cost of producing soybeans in Argentina average $8.81 per bushel, compared to $7.47 in Brazil and just over $8.00 in the United States. For corn, Brazil had the highest cost of production at $4.74 per bushel, compared to $3.93 for Argentina and $3.80 in the United States. This chart is from the ERS report, Corn and Soybean Production Costs and Export Competitiveness in Argentina, Brazil and the United States, released on June 22, 2016.

Farmers adjust to rising fertilizer prices in a variety of ways

Thursday, September 1, 2016

Fertilizer prices have increased overall since 2006, reaching historical highs in 2008. Fertilizers are an important input into farming and higher prices have forced farmers to alter their use. Beginning in 2006, USDA?s Agricultural Resource Management Survey (ARMS) asked farm operators how they adjusted their operations in response to higher fertilizer and fuel prices. For most crops (soy, cotton, and wheat) farmers responded to higher prices by reducing their application rate. However, the largest users of fertilizer?corn farmers?responded most often that they managed fertilizer use more closely, for example by using practices such as soil testing, split applications, variable-rate applications, or soil incorporation. This chart is found in the ERS report,?Agriculture?s Supply and Demand for Energy and Energy Products, EIB-112, May 2012.

Rising corn stocks to drive down prices

Thursday, September 1, 2016

Despite higher December forecasts for U.S. corn use for feed and ethanol, USDA continues to forecast significantly higher U.S. and global corn stocks and lower prices for corn in 2013/14 (September/August marketing year). Total U.S. corn production is forecast at 355.3 million tons, up 30 percent from the drought-damaged 2012/13 crop, while total use is forecast to rise 12 percent from 2012/13. Key sources of demand growth for corn in 2013/14 are a 20 percent increase in feed and residual use, and a 6 percent increase in the use of corn for ethanol production. Lower corn prices combined with relatively high prices for ethanol and distillers dried grains (DDG) have boosted ethanol production. Even with increased use, U.S. ending stocks of corn are forecast at 45.5 million tons, more than twice the estimate of U.S. ending stocks for 2012/13 and accounting for nearly all the forecast rise in global stocks.? The U.S. corn price received by farmers for 2013/14 is forecast at $4.05 to $4.75 per bushel, with the midpoint forecast of $4.40/bushel down sharply from the record season-average price of $6.89 per bushel in 2012/13. This chart can be found in the Feed Grain Chart Gallery, with accompanying analysis in Feed Outlook: December 2013.

Yield growth supports rapid expansion of Brazilian corn production

Thursday, September 1, 2016

Rising yields have been the primary driver of growth in Brazil?s corn production since the mid-2000s. Production gains have allowed Brazil to meet rising domestic corn demand, as well as emerge as a major corn exporter. New high-yielding varieties, the introduction of GMO corn, improved cultural practices, and a shift to higher-yielding land has supported long-term yield growth.? A large share of second-crop corn is planted following soybeans in the frontier agricultural State of Mato Grosso, where corn production quadrupled over the past decade.? In 2011/12 and 2012/13 (March/February marketing year), above-average rains in Mato Grosso pushed corn yields and production to record levels.? For 2013/14, lower corn prices caused reductions in corn area and, with the assumption of more normal weather, corn yields are forecast below the 2012/13 record.? Brazil is the world?s third largest corn producer after the United States and China.? Brazil became the world?s largest corn exporter in 2012/13 when the U.S. corn crop was damaged by drought, but is forecast to be the second largest exporter in in 2013/14. Find additional analysis of corn market developments in Feed Outlook: March 2014.

U.S. corn and soybean farmers use a wide variety of glyphosate resistance management practices

Thursday, September 1, 2016

For weed control, U.S. corn and soybean farmers rely on chemical herbicides which were applied to more than 95 percent of U.S. corn acres in 2010 and soybean acres in 2012. Over the course of the last two decades, U.S. corn and soybean farmers have increased their use of glyphosate (the active ingredient in herbicide products such as Roundup) and decreased their use of herbicide products containing other active ingredients. This shift contributed to the development of over 14 glyphosate-resistant weed species in U.S. crop production areas. Glyphosate resistance management practices (RMPs) include herbicide rotation, tillage, scouting for weeds, and other forms of weed control. In some cases, ERS found that usage rates for RMPs increased from 1996 to 2012. In other cases, RMP use dropped from 1996 to 2005/06 but increased as information about glyphosate-resistant weeds spread. For example, herbicides other than glyphosate were applied on 93 percent of planted soybean acres in 1996, 29 percent in 2006, and then 56 percent in 2012. This chart is found in the April 2016 Amber Waves finding, ?U.S. Corn and Soybean Farmers Apply a Wide Variety of Glyphosate Resistance Management Practices.?

Nearly all U.S. ethanol is produced and sold in domestic markets

Thursday, September 1, 2016

U.S. production of ethanol hit a record 14.8 billion gallons in 2015, and when combined with the carry-over stocks from the previous year and 2015 imports, the total ethanol supply reached an all-time high of 15.7 billion gallons. Nearly all ethanol blended into the U.S. gasoline supply is produced domestically, and, over the past five years, about 94 percent of domestic production was used in the United States. Ethanol imports peaked in 2006 at 731 million gallons (equal to 12 percent of the U.S. supply), but each year since 2010 exports have exceeded imports, making the United States a net exporter of ethanol. The domestic market for ethanol is at full capacity due to the technical and regulatory constraints that limit most of the U.S. gasoline supply to a 10 percent maximum ethanol blend, so the export market is now the primary opportunity for growth. Ethanol exports peaked in 2011 at nearly 1.2 billion gallons, but have remained below 850 million gallons for the past four years. This chart is based on the ERS U.S. Bioenergy Statistics data product.

Verified non-genetically engineered products see steady increase since 2010

Monday, April 4, 2016

Genetically engineered (GE) crops are now widely used to produce breakfast cereals, corn chips, soy protein bars, and other processed foods and food ingredients, and a market for foods produced without crops grown from GE seed has emerged. The Non-GMO Project is a private group that provides verification services for products made according to best practices for genetically modified organism (GMO) avoidance. In 2014, the Non-GMO Project Verified label appeared on nearly 12,500 products with unique universal product codes (UPC), up from fewer than 1,000 in 2010. Many of the food products verified under this protocol, and bearing the Non-GMO Project Verified butterfly logo, are not at risk of GE contamination: that is, they do not contain corn, soybeans, or other crops for which GE varieties are available. Also, over half of the products verified under this protocol are certified organic under USDA’s organic regulations, which already prohibit the use of genetic engineering in organic production and processing. Non-GMO Project Verified labeling currently accounts for most of the conventionally grown U.S. products that are non-GE verified. This chart appears in the ERS report, Economic Issues in the Coexistence of Organic, Genetically Engineered (GE), and Non-GE Crops, February 2016.

After a decade of rapid growth, corn use for ethanol is projected to decline

Wednesday, March 16, 2016

Ethanol production in the United States is based almost entirely on corn as a feedstock. Corn‑based ethanol production is projected to fall over the next 10 years. This reflects declining overall gasoline consumption in the United States (which is mostly a 10‑percent ethanol blend, E10), infrastructural and other constraints on growth for E15 (15‑percent ethanol blend), and the small size of the market for E85 (85‑percent ethanol blend), with less-than-offsetting increases in U.S. ethanol exports. Even with the U.S. ethanol production decline, demand for corn to produce ethanol continues to be strong. While the share of U.S. corn expected to go to U.S. ethanol production falls, it accounts for over a third of total U.S. corn use throughout the projection period. This chart is based on information in USDA Agricultural Projections to 2025.

Certified organic corn was planted later than GE corn in 2010 to avoid cross-pollination

Friday, February 26, 2016

U.S. farmers used genetically engineered (GE) seed varieties that contain traits to tolerate herbicides used for weed control and/or to resist other pests on over 90 percent of corn acreage in 2015. To receive the price premiums associated with organic and other non-GE crops, these producers must minimize the unintended presence of GE materials in their crops. Organic and other non-GE farmers use various practices—including the use of buffer strips to minimize pesticide/pollen drift and/or delaying crop planting until after any nearby GE crops are planted—to prevent their crops from commingling with GE crops. While some field crops are mostly self-pollinating, most corn pollination results from pollen dispersal by wind and gravity. In USDA’s most recent (2010) corn survey of conventional and organic producers in top corn producing States, delayed planting was reported on two-thirds of planted organic corn acreage. While this strategy helps protect against commingling of GE and non-GE crop pollen, growers may realize lower yields from planting at a suboptimal time. This chart is found in the ERS report, Economic Issues in the Coexistence of Organic, Genetically Engineered (GE), and Non-GE Crops, February 2016.

Falling prices for corn and gasoline drive ethanol prices lower

Thursday, January 21, 2016

Errata: On January 26, 2016, this chart was reposted to correct the data labels for ethanol and gasoline, which were switched in the original chart.Each gallon of automobile gasoline typically contains about 10-percent ethanol, reflecting a mandate under the Renewable Fuels Standard that specifies the volume of ethanol that must be blended into the Nation’s gasoline supply. The steep decline in crude oil prices over the past 18 months has pushed the price of many conventional fuels down by more than 50 percent, including gasoline, which has fallen to price levels not seen since 2007. The price of ethanol has also fallen, driven primarily by the more than 50-percent decline in the price of corn—the primary ethanol feedstock—since summer 2013. Although ethanol is not derived from crude oil, its price is still influenced by the price of gasoline (as well as the price of corn) since ethanol and gasoline can substitute as an energy source, and as an oxygenate or octane booster, ethanol competes against petroleum-based alternatives. The price of ethanol is usually below the price of gasoline because of ethanol’s lower energy content, but the most recent data show wholesale gasoline prices falling slightly below the price of ethanol. This pattern, if it continues, suggests further downward pressure on ethanol prices. This chart is from the USDA/ERS U.S. Bioenergy Statistics data set.

The price of sorghum has returned to below the price of corn

Friday, December 18, 2015

Sorghum is a common feed grain that can substitute for corn in livestock feed rations and in the production of ethanol. Corn tends to be preferred over sorghum as a feed ingredient, so sorghum typically sells at a discount compared to corn in global markets. Throughout much of the 2014 marketing year (September-August) this situation reversed, and due in large part to strong demand from China, sorghum began selling at a premium over corn, at times exceeding 20 percent. As a result, sorghum use for ethanol production declined while acreage for the 2015 harvest increased to result in a record-large U.S. crop. This, combined with recent changes in China’s import policy that could reduce U.S. sorghum’s export prospects for the 2015 crop, has greatly increased the availability of sorghum in domestic markets for feeding and ethanol production. Because of the greater availability of sorghum, the price fell back below the price of corn and is now more in line with historic relationships. Given these lower prices, sorghum use for ethanol production is expected to expand more than fivefold this year, and U.S. shipments to Mexico, which were hampered by the high prices for the 2014 crop, are expected to at least partially resume during the current marketing year, which began in September 2015. This chart is based on the October 2015 Feed Outlook and the ERS Feed Grains database.

A growing share of U.S. corn is exported as ethanol byproducts

Thursday, November 5, 2015

U.S. exports of distillers dried grains with solubles (DDGS)—a common byproduct of corn ethanol production—have grown from nearly zero in 2005 to as high as 12 million metric tons in the 2013/14 marketing year (September/August), with 10 million metric tons forecast for export in the 2015 marketing year. This increase in exports reflects the expansion in ethanol production that occurred over this same period, rising from just under 4 billion gallons in 2005 to more than 14 billion gallons in 2014. While U.S. corn exports still exceed the volume of DDGS exported, these markets are linked because each ton of corn processed into ethanol produces just under a third of a ton of DDGS. Ethanol production accounted for 38 percent of U.S. corn use in 2014/15, while exports were less than 14 percent, but DDGS exports represent another way that U.S. corn production enters global markets. This chart is from the ERS data products, U.S. Bioenergy Statistics and the Feed Grains Database.

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