Analyzing USDA’s Corn Supply and Demand Numbers

Earlier in May, the USDA put out its first balance sheets looking at 2024-2025 supply and demand. Ben Brown is an agricultural economist with the University of Missouri’s Food and Agricultural Policy Research Institute. Brown talks about the corn side of the balance sheets.

“On the corn side, I think that as a producer of corn, we have to feel pretty good. Again, this is my opinion, but we have to feel pretty good to see a 181 national average yield and an ending stocks number for new crop at 2.1 billion bushels. That new crop number, given that the national average yield could be 2.4 or 2.5 billion bushels of ending stocks, puts even more pressure on corn prices for next year or this current growing season. And so, I feel like we’ve seen demand come back. And when I look down through the balance sheets and the expectations for next year, I think the corn numbers look very achievable. I don’t think there’s anything in there that’s so lofty that we can’t reach.”

He says people are already taking umbrage with the 181 bushel-per-acre national average corn yield estimate.

“We’re going to pick apart a number of different categories in the next two months. The big one there is the supply side, given how much of the corn crop is going in in less-than-ideal conditions, people are going to start picking apart, and have already started picking apart, that 181 national average corn. You start lowering that and that starts to make that ending stocks number a little bit tighter, even if we pull back a little bit on demand. The second thing is we’ve seen some deterioration in corn production around the world. You know, because of a range of different factors, all the way from drought to leaf hopper disease to the flooding.”

The world’s corn production challenges may mean unanticipated demand for U.S. corn in the months ahead…tape

“If that started to translate into higher U.S. corn exports due to supply issues around the globe, that would start to tighten the balance sheet a little bit. So, on the corn side, to have a 181 national average yield and an ending stocks number at 2.1 billion bushels certainly gives me a reason to say that the demand numbers were overly inflated, and I look at them and say, I don’t think they’re unrealistic. They certainly seem achievable to me.”