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In its August World Agricultural Supply and Demand Estimates (WASDE) report, the United States Department of Agriculture (USDA) increased its US corn yield projection for the 2025/26 crop year (the crop currently being harvested in the fall of 2025) from 181.0 bushels per acre in July to 188.8 bushels per acre.
Additionally, the USDA increased its US harvested area estimate from 86.8 million acres to 88.7 million acres. The September WASDE report the following month reduced the corn yield estimate down to 186.7 bushels per acre, but increased harvested area to 90 million acres, increasing total production by 72 million bushels over the August estimate. A US average 186.7 bushels per harvested acre would be a record yield, eclipsing the previous high of 176.6 bushels per acre set in crop year 2017.
Every year, in the monthly WASDE report up to the July WASDE report, yield estimates for the upcoming marketing year are based on long-term trend yields. Beginning with the August report, yield estimates are given more attention and are based on farmer reported yield estimates, the USDA objective yield survey, which uses physical sampling of plant counts and ear development by USDA staff, and satellite imagery, specifically the Normalized Difference Vegetation Index (NDVI). The difference in estimation method can cause large jumps in yields and production as it did this year.
Compounding the estimated record yield’s impact on the US corn balance sheet, acreage is also estimated to be historically high this crop year. The estimated planted area of 98.7 million acres is the highest level since 1936. Harvested acreage, estimated at 90 million acres is the highest level since 1931 and the 4th highest level ever over the last 100 years.
While the September WASDE yield and acreage estimates rely on a significant amount of data and years of estimation method refinement by the agency, they always contain some forecast error. Over the last 35 years, the September yield forecast has shown little statistical bias (a systematic under- or over-estimation) but has demonstrated significant variance compared to final estimates. The forecasted yield has exceeded the actual yield by as much as 12 bushels per acre (in 1993, the year of extensive flooding in the Midwest).
In 2004, on the other hand, the September forecast undershot the actual yield by 11 bushels per acre. Near perfect planting and growing conditions in 2004 led to a US average yield of 160.3 bushels per acre, almost 21 bushels per acre higher than the previous record set in 1994. Based on the standard deviation over the last 35 years, it is expected that there is a 68% chance that the final corn yield for 2025/26 will fall between 181.39 bushels per acre (approximately the pre-August yield estimate) and 192 bushels per acre, although the upside to the current yield estimate is probably more limited than the downside.
Corn is the second most cultivated crop in the world behind wheat. Over 50.6 billion bushels of corn are expected to be produced globally in the 2025 crop year on 518 million harvested acres. Approximately 32 billion bushels of corn will be fed to livestock with an additional 19 billion bushels going to food, seed, and industrial use (FSI). FSI includes products such as starch, high fructose corn syrup, and fuel, beverage, and industrial ethanol. About 8 billion bushels of corn are traded internationally each year. Note that, from a global perspective, trade is counted twice here as it appears on both sides of the balance.
Global growth in meat consumption and production will continue to support feed demand for corn as populations continue to grow and economic growth pushes a larger portion of the global population into the middle class. More economic resources tend to increase per capita meat consumption up to a point. The most productive and developed economies in the world such as the US and EU have much slower growth in overall meat consumption, with most growth in recent years driven by Asia and South America.
Different regional feeding systems result in different corn feeding intensity between countries with similar per capita meat consumption. For example, even though Brazil produces approximately 11% of the world’s meat (19% of beef), it only consumes 8% of global feed corn because, unlike the US, Brazilian cattle are usually not fattened in concentrated feed lots and instead are more likely to be grass finished. The US, on the other hand, where concentrated feed rations are the norm for all species, accounts for 19% of global corn feed demand supporting 16% of global meat production.
Over the last 35 years, US corn acreage has become significantly more productive with yields increasing by 57% over the period from 118.5 bushels per acre to an estimated 186.7 bushels per acre this year. Over the same period, China, the second largest producer, saw yields grow from 72 bushels per acre to 106 bushels per acre, an increase of 47%. US productivity far outpaces all other major corn producers, with expected 2025 yield 71 bushels per acre higher than Ukraine, the next most productive country. US yields are the product of a combination of the widespread use of improved genetics and fertilizer application along with favorable growing conditions, particularly in the Midwest. In some years when fertilizer is expensive, that high fertilizer use weighs heavily on profitability.
Combining the US record yield and near-record acreage, 2025 forecasted production is 16.8 billion bushels, exceeding 2024 by almost 2 billion bushels and accounting for 33% of total world production (see Table 1). The top 3 producing countries, the US, China, and Brazil account for over 66% of global production.
The WASDE is widely considered a benchmark of global agriculture information and while it disseminates essential market intelligence supporting price discovery in agricultural markets, the market reaction to production estimate changes in the WASDE is not clear cut. All else being equal, it would typically be assumed that a decrease in the WASDE forecasted production by an increase in either yield or acreage would result in an increase in price as the supply curve shifts to the right.
However, this is not necessarily the case. Data reported by USDA for the change in Iowa cash corn reported by the USDA Agricultural Marketing Service (AMS) price 1 day after the WASDE is released and 1 week after the WASDE is released shows that the relationship between WASDE production and price changes is much less deterministic than expected with many examples of production and price moving in the same direction.
This counter-intuitive supply/price relationship is likely a result of the impact of evolving market participant expectations between WASDE report releases. For example, the August 2022 WASDE estimated 2022 marketing year US corn yield at 175.4 bushels per acre. Then, in the September 2022 report, the forecast was lowered to 172.5 bushels per acre and, along with lower acreage, the production forecast dropped by 415 million bushels. While there was a price increase over one day following the September report, after a week the price decreased by 27 cents instead of increasing on the news of lower supply. In this case, futures price movements between the two reports suggest that market participants expected the production decrease that was reported in September.
On August 12, the release date of the August report, futures closed at $6.40/bushel. On the day before the September report was released futures closed at $6.99/bushel, a 59 cent/bushel increase between the two reports. Thus, it is likely that market participants were collecting and analysing other data to develop market expectations ahead of the WASDE release. While the WASDE is quite important for market transparency, it becomes stale quickly and likely only confirms most market information after the fact. This does suggest that the corn market tends to be at least somewhat efficient, incorporating new information into price quickly.
The latest WASDE estimates that the US will export 2.97 billion bushels of corn during the 2025/26 crop year, almost 1.3 billion bushels more than Brazil and a 150 million bushel increase over the 2024/25 crop year. Brazil has been the second largest corn exporter after holding the top position for one year in 2022. Of the 5.57 billion bushels of corn supply (stocks + production) in Brazil in the 2025 crop year, 21% is expected to be consumed for food use and a growing corn-based ethanol industry and 46% is expected to be used for animal feed, leaving approximately 30% (1.7 billion bushels) of supply to be exported while reducing stocks slightly.
US exporters have already acted on the expectation of higher exportable supply. The USDA Foreign Agricultural Service (FAS) publishes weekly export sales data including sales commitments for the next marketing year. The last weekly report published included sales commitments made for export during the 2025/26 marketing year through the end of the 2024/25 marketing year (the last week of August). US exporters have sales commitments of 21.9 million metric tonnes (862 million bushels), 71% higher than commitments at the same time last year. 34% of those exports are bound for Mexico, 11.6% to Japan, 7.3% to Colombia, and 25% is to unknown destinations.
It is expected that South American farmers will plant large first (summer) corn crop over the next couple of months followed by a large safrinha in the new calendar year, leading to ample ending stocks for crop year 2025/26. Even with expanded exports, US ending stocks are forecasted at 2.1 billion bushels in August 2026, the highest crop year ending level since 2018/19 when futures prices averaged $3.80/bushel. Stocks or stock/use are often used as an indication of tightness in the market and, consequently, the equilibrium price.
Currently, nearby (December) CME corn futures are trading near $4.24/bushel and September 2026 (end of the crop year) futures are at $4.56/bushel. Prices in this range may not be profitable for a significant portion of US farmers. The USDA Economic Research Service (ERS) estimates that, for 2026/27, the total operating cost per planted acre for US corn is $457.90. Additionally, the ERS estimates that allocated overhead will be $457.61 per acre. If the opportunity cost of farmer labor and land is removed from the allocated overhead, it is reduced to $225.20 per acre. Removing these two items does not allow for a profit to the producer.
Assuming the 2025/26 average estimated state corn yields from the September WASDE, the chart shows the breakeven corn price required to cover operating cost, allocated overhead, and total costs by state. For a large portion of the US, corn prices around $4.00 per bushel are enough to cover total costs, though not necessarily by a large margin. At the calculated breakeven price, an operation is not profitable; it is just not losing money.
At 2025/26 estimated production levels, all state with breakeven prices above $4.00 per acre account for 2.25 million acres and 273 million bushels of production. Thus, if the large, expected crop is realized and the South American crop is also large, US corn acreage can be expected to fall next crop year if prices remain in the $4.00 per acre range. If opportunity costs (returns to labor and land of approximately $70,000 for the enterprise) are included in the breakeven calculation, almost no US production is profitable.
There are many factors that could improve the outlook for corn production economics and acreage next year. The size of the South American crop is speculative and is dependent on actual planted area and weather over the next 6 months. The record large US crop for 2025/26 is not yet out of the field and could be larger or smaller than expected. California recently passed legislation allowing E15 (gasoline blended with 15% ethanol) to be sold year-round in the state, but the bill has not yet been signed by Governor Newsom.
Efforts are also underway to allow E15 sales year-round nationwide without summer restrictions. Increased ethanol demand would be supportive of domestic corn prices. The US Energy Information Agency (EIA) estimates US ethanol production capacity at 18 billion gallons per year while production over the last 12 months was 16.4 billion gallons with strong production margins. Therefore, while there may be some slack ethanol production capacity, there is a short term limit to production expansion.
US biofuel policy, which is in flux across multiple programs, will also help drive competing planting decisions between corn and soybeans next year. Domestic soybean oil use as a biofuel feedstock is incentivized in current biofuel policy guidance through preferential tax credits (45Z) and preferential Renewable Fuel Standard (RFS) credit generation compared to imported feedstocks. In turn, domestic soybean crush economics and soybean demand are supported by the programs.
US trade policy will also help shape planting economics. Currently, China is importing virtually zero soybeans from the US as China and the US continue to clash over broad trade policy. Continued weak international demand for US soybeans could drive US farmers to plant more corn relative to beans. For most crops, domestic and foreign policy will be of utmost importance as farmers begin to form expectations and make planting decisions in spring 2026.
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