Corn Acreage Insufficient

Corn acreage in the U.S. is estimated to be at record highs. The U.S. Department of Agriculture estimates that planted corn acres could be higher this year that any year since 1944. Despite these estimates, corn acreage and estimated yield might not be enough to stabilize corn prices.

Corn prices have risen over the last few years. Partly due to higher exports and partly due to increased ethanol demand, farmers are storing less corn that eventually makes its way to American consumers. Domestic corn stocks have been halved since last May, dropping from over 1 billion bushels to just over 600 million. This level of domestic stocks is the lowest since the 1990s.

Shortages are in part due to foreign export. Corn exports to China have recently reached 15 year highs. Current estimates place Chinese corn imports at over 2 million tons. Added to these exports is an increasing demand for corn-based ethanol. Increased ethanol use and research continues to drain U.S. domestic corn stocks.

Finally, low yields and poor weather have convinced many farmers to plant soybeans and cotton, which tend to yield higher incomes. Record high soybean and cotton prices are playing a major role in the decline in needed acreage.

Domestic shortages all lead to higher food prices and will almost certainly intensify the debates over ethanol currently going on in the U.S. Senate. Senators from agricultural states, such as Iowa’s Chuck Grassley, have been pushing for ethanol tax credits for the upcoming Farm Bill, and corn shortages will most certainly take center stage in these debates.

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Written by: Justin Ellison / Farm Plus Staff Writer