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Texas corn yields below 10-year average; Marketing likely challenging

Corn producers face demand/supply marketing challenges going into 2025. Economist Mark Welch considers the possibility of a multi-year trend for low prices, similar to 2014 through 2018.

Ron Smith, Contributing Writer

October 22, 2024

3 Min Read
corn
Shelley E. Huguley

A combination of record corn yields in the Midwest and disappointing production across much of the Southwest, the Delta, and into the Southeast will put pressure on marketing decisions.

“The USDA and WASDE reports show a 183.8 bushel per acre average yield,” says Texas A&M AgriLife Extension Economist Mark Welch, College Station. “We are seeing incredible numbers for U.S. corn yields out of the Corn Belt.

Not so much for Texas.

“Harvest is moving along at a good pace,” Welch adds. “The latest progress report was delayed but the last update showed Texas at 95% complete. That’s ahead of normal. We are seeing some disappointing yield numbers.”

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Welch says nationally 30% of the corn crop has been harvested, slightly ahead of the 27% average. “If we have no major delays, harvest will be earlier than usual.”

He says price patterns are also running early, “and have been all year. December corn hit market highs a month early, April into early May instead of June. Prices also hit the seasonal low a month early, if it holds.”

Optimism exists

Not all is gloom. Welch sees some marketing opportunities going into 2025. “I’m somewhat optimistic into 2025 as we just finished wrapping up the 2023 cropping year. The stocks to use ratio for old crop corn got a little better,” he says. “The pile of grain on hand got a little smaller.”

Related:Dawn to dusk: It's sorghum harvest

He said increased use for feed, ethanol, and exports helped reduce stocks. “The possibilities for demand are looking better. Even in the face of a record crop and high supplies, improved demand can be a positive. The cure for low prices is low prices.”

Welch says livestock numbers may be challenging with diminishing numbers. “But feedyards are feeding animals longer and to heavier weight with the species cattlemen are producing now. That means they are feeding more grain with incentives to feed longer and market heavier animals. That’s good for corn.”

He adds that cheaper gasoline makes transportation into the economy more efficient.

Export opportunities

“The export picture is big factor,” Welch says. “Gaining market share back, perhaps from Brazil, is important. We are seeing trends of increased foreign corn consumption. That helps adjust the supply and demand picture for 2025.”

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Welch says the biggest changes to the supply and demand picture came from increases in old crop corn use, lowering the beginning stock number for 2024/25 by 52 million bushels. “Domestic use categories in new crop corn were unchanged, but USDA increased the export number by 25 million bushels. World corn ending stocks were down slightly as the 1.6 million metric ton (mmt) increase in supply was met with a 3.5 mmt increase in use.”

Related:Southwest sorghum rated good to excellent

Looking ahead

Soon after farmers finish harvesting the 2024 crop they start thinking about 2025 acreage, Welch says. “Improved demand would support prices at a more profitable level for the 2025 crop, depending on normal and seasonal patterns and trends.”

Welch says the record crops in the Midwest will offer profit potential, even at lower prices, but producers with marginal or poor yields will find profits challenging.

“The overall Texas state yield will be below the ten-year average,” he says. “Crop ratings in Tennessee and North Carolina are also off, but yield numbers out of the Midwest are stunning.

“If everybody made a crop this year, it would be exciting,” he says. “Bumper yields can absorb lower prices. Unfortunately, those who did not make a crop will face financial hardship with this price situation.”

Welch says corn producers face demand/supply marketing challenges going into 2025, and he considers the possibility of a multi-year trend for low prices, similar to 2014 through 2018.

He recommends corn growers make a critical evaluation of marketing strategies. “Know your budget, then look for market opportunities. Get costs under control,” he advises. “The efficient producer who can maintain yields,  manage costs, and capture marketing opportunities that might be fleeting will have better opportunities to find something that might work.”

Related:Wheat, corn price benchmarks help determine price

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About the Author

Ron Smith

Contributing Writer, Farm Progress

Ron Smith has spent more than 30 years covering Sunbelt agriculture. Ron began his career in agricultural journalism as an Experiment Station and Extension editor at Clemson University, where he earned a Masters Degree in English in 1975. He served as associate editor for Southeast Farm Press from 1978 through 1989. In 1990, Smith helped launch Southern Turf Management Magazine and served as editor. He also helped launch two other regional Turf and Landscape publications and launched and edited Florida Grove and Vegetable Management for the Farm Press Group. Within two years of launch, the turf magazines were well-respected, award-winning publications. Ron has received numerous awards for writing and photography in both agriculture and landscape journalism. He is past president of The Turf and Ornamental Communicators Association and was chosen as the first media representative to the University of Georgia College of Agriculture Advisory Board. He was named Communicator of the Year for the Metropolitan Atlanta Agricultural Communicators Association. Smith also worked in public relations, specializing in media relations for agricultural companies. Ron lives with his wife Pat in Denton, Texas. They have two grown children, Stacey and Nick, and two grandsons, Aaron and Hunter.

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