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Are USDA's 10-year corn projections off?Are USDA's 10-year corn projections off?

Grain Scoops: Economist Kim Anderson evaluates a recently released USDA report regarding baseline projections for U.S. corn.

Kim Anderson

December 20, 2024

3 Min Read
Grains Scoops
Shelley E. Huguley

The USDA released 10-year (2025/26 through 2034/35 marketing years) baseline projections for U.S. corn. USDA’s baseline projections plus historical corn prices for the 2009/10 through 2023/24 marketing years and corn production for 2015 through 2024 (10 years) may be used to calculate future net returns from corn production.

The USDA’s 2024/25 through 2034/35 marketing years average annual corn price projection was $4.20 with a projected corn price range from $3.90 to $4.30 ($0.40 range). This may be compared to the 2009/10 through 2023/24 U.S. average annual price of $4.61 with a range from $3.36 (2017) to $6.89 (2022) ($3.53 range).

At this writing, corn may be forward contracted for 2025 harvest delivery in Perryton, Texas, for $4.56 and in Pond Creek, Oklahoma, for $4.10.

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During the 2009/10 through 2023/24 marketing years (15 years), the U.S. average annual corn price was $4.61. The lowest price was $3.36 (2016 and 2017), and the highest average price was $6.89 (2012).

During the last 15 years (2009/10 through 2023/24), Texas’s average annual corn prices ($5.05) were $0.44 higher than the average annual U.S. price. Oklahoma’s average annual corn prices ($4.89) were $0.28 higher than the U.S. average price and $0.17 less than Texas’s average price.

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Using USDA’s average baseline price of $4.20 and Texas’s historical 15-year average price difference (Texas over U.S.) of $0.44 indicates a 2025/26 through 2034/35 average annual Texas corn price of $4.64 with a price range from $3.39 to $6.92.

USDA’s baseline corn projected yields increased from a projected 182 bushels per acre in 2025 to 200 bushels per acre in 2034. The 10-year average yield was projected to be 190 bushels per acre. During the last 10 years (2015 – 2024), U.S. corn yields have averaged 173 bushels per acre with an average annual yield range between 153 (2015) and 183 (2024) bushels per acre.

Texas’s 10-year average corn yield was 123 bushels per acre with a range between 95 bushels (2022) and 140 bushels per acre (2017). Using USDA’s projected yield increase, Texas average corn yield is projected to increase from 123 bushels per acre to 141 bushels. This is about 1.8 bushels per year increase in yield.

The USDA calculated that corn’s variable costs per acre were $470 in 2023 and $440 in 2024. For the 2025 corn crop, the baseline variable costs per acre are projected to be $431, and projected to increase to $455 by 2034.

The average Texas corn yield per acre is 123 bushels compared to 133 bushels for Oklahoma corn. The per acre costs to produce dry land corn in Oklahoma were estimated to be $305 per acre (Oklahoma Cooperative Extension Service, 11/22/2024). Texas’s dryland corn production variable costs should be relatively close to Oklahoma’s corn production costs.

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The USDA estimates that the net return over variable costs for U.S. corn, for the 2023/24 corn marketing year, was $334 per acre. The net return for the 2024/25 corn marketing year is projected to be $314 per acre. Between now and the 2034/35 corn marketing year, the net return for U.S. corn is projected to increase to $405 per acre.

A 2024 Oklahoma dryland corn budget showed a $120 per acre return above variable costs.

USDA’s baseline projections for corn imply that increasing yields and slightly higher prices are expected to result in slightly higher returns for corn between now and 2034.

What we know with certainty is that USDA’s baseline projections are wrong. We also know that these are probably the best numbers to use, along with your farm’s history, to estimate future corn returns.

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