Feedgrains Sector at a Glance

Sector at a Glance

The major feed grains are corn, sorghum, barley, and oats. Corn is the primary U.S. feed grain, accounting for more than 95 percent of total feed grain production and use.   

  • More than 90 million acres of land are planted to corn, with the majority of the crop grown in the Heartland region.
  • Most of the crop is used as the main energy ingredient in livestock feed.
  • Corn is also processed into a multitude of food and industrial products including starch, sweeteners, corn oil, beverage and industrial alcohol, and fuel ethanol.

The United States is a major player in the world corn trade market, with between 10 and 20 percent of its corn crop exported to other countries. 

Corn is grown in most U.S. States, but production is concentrated in the Heartland region (including Illinois, Iowa, Indiana, eastern portions of South Dakota and Nebraska, western Kentucky and Ohio, and the northern two-thirds of Missouri). Iowa and Illinois, the top corn-producing States, typically account for about one-third of the U.S. crop.  

Because of provisions in the Federal Agriculture Improvement and Reform Act of 1996 that permits farmers to make their own crop planting decisions based on the most profitable crop for a given year, corn acreage in the United States has increased from a Government-mandated low of 60.2 million planted acres in 1983 to close to or exceeding 90 million since 2010.  Much of this growth in area and production is a result of expanding ethanol production, which now accounts for nearly 40 percent of total corn use.  While the number of feed grain farms (those that produce corn, sorghum, barley, and/or oats) in the United States has declined in recent years, the acreage per corn farm has risen. Moreover, the number of large corn farms (with more than 500 acres) has increased over time, while the number of small corn farms (with less than 500 acres) has fallen.   

Corn production has risen over time, as higher yields followed improvements in technology (seed varieties, fertilizers, pesticides, and machinery) and in production practices (reduced tillage, irrigation, crop rotations, and pest management systems).

Strong demand for ethanol production has resulted in higher corn prices and has provided incentives for farmers to increase corn acreage. In many cases, farmers have increased corn acreage by adjusting crop rotations between corn and soybeans, which has caused soybean plantings to decrease. Other sources of land for increased corn plantings include cropland used as pasture, reduced fallow, acreage returning to production from expiring Conservation Reserve Program contracts, and shifts from other crops, such as cotton.  Corn production has also expanded to nontraditional growing areas, especially in the north, as short-season hybrids have been developed. 

Corn has food, seed, and industrial (FSI) uses. It is a major component of livestock feed. Feed use, a derived demand, is closely related to the number of animals (cattle, hogs, and poultry) that are fed corn. The amount of corn used for feed also depends on the crop's supply and price, the amount of supplemental ingredients used in feed rations, and the supplies and prices of competing ingredients.   

As ethanol production increases, the supply of ethanol coproducts also increases. Both the dry-milling and wet-milling methods of producing ethanol generate a variety of economically valuable coproducts, the most prominent of which are distillers' dried grains with solubles (DDGS), which can be used as a feed ingredient for livestock. Each 56-pound bushel of corn used in dry-mill ethanol production generates about 17.4 pounds of DDGS. In the United States, feed for both dairy and beef has been the primary use of DDGS, but increasingly larger quantities of DDGS are making their way into the feed rations of hogs and poultry.

Corn is also processed for human consumption and other industrial uses. FSI uses of corn account for about one-third of domestic use. During processing, corn is either wet or dry milled depending on the desired end products:   

  • Wet millers process corn into high fructose corn syrup (HFCS), glucose and dextrose, starch, corn oil, beverage alcohol, industrial alcohol, and fuel ethanol.
  • Dry millers process corn into flakes for cereal, corn flour, corn grits, corn meal, and brewers grits for beer production.   

The market for food made from corn has grown in recent years with the expanding Latin American population in the United States. In the future, food uses for corn are expected to expand at the rate of population growth. Various industrial uses for corn and corn byproducts continue to be developed. 

Some Federal policies affecting farmers also encourage the production of corn. Farmers may be eligible to receive Government payments that support or protect their income. These include production flexibility contract payments, marketing loans, disaster aid, conservation payments, and crop insurance. Government programs have been instrumental in the development of the HFCS and fuel alcohol markets. Import fees, duties, and import quotas on sugar have also made HFCS an economical alternative. Additionally, recent Federal environmental laws have paved the way for greater use of corn in fuel alcohol production.

Corn is the largest component of global coarse grain (corn, sorghum, barley, oats, rye, millet, and mixed grains) trade, generally accounting for about two-thirds of the volume over the past decade. The United States is the world's largest corn producer and currently exports between 10 and 20 percent of its annual production. Because much of the foreign competition is in the Southern Hemisphere, farmers plant their corn after discovering the size of the U.S. crop, thereby providing a quick, market-oriented supply response to short U.S. crops. Several countries—including Brazil, Ukraine, Russia, India, and South Africa—have had significant corn exports when their own crops were bountiful or international prices were attractive.