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corn fieldBy Gary W. Brester, Professor of Agricultural Economics, Montana State University, February 2012.


In 2011, 319 million acres of cropland were planted to principal crops in the United States. Of these, about one-third was planted to feed grains (102.6 million acres). Corn is the most widely produced U.S. feed grain with almost 92 million acres planted in 2011.

About 6 million acres of corn are harvested as silage annually with the remainder being harvested as grain. Corn production totaled 12.36 billion bushels in 2011, which was slightly below the 2010 level of 12.45 billion bushels. In 2009, a record crop of 13.1 billion bushels was produced.

The rest of the world produced nearly 22.16 billion bushels of corn. Hence, a total of 34.52 billion bushels of corn was produced throughout the world in 2011. U.S. production represents about 36 percent of world corn production.  (WASDE)

U.S. corn production is used for livestock feed (37%), food products (11%) and ethanol production (40%). Use as livestock feed totaled 4.6 billion bushels in 2011, while 5 billion bushels were used to produce ethanol. However, one of the by-products of ethanol production is distillers grains, which are subsequently used as livestock feed. In 2011, just over 33 million tons of distillers grains were produced, which is about 25 percent (by weight) of the 5 billion bushels used to produce ethanol. About 1.4 billion bushels of corn were used to produce food products, the majority of which are one of several variants of high-fructose corn syrup. Starch, corn oil and various other food products are also produced from corn. The remaining uses of corn include seed production, other industrial uses and exports.


Corn acreage has increased from 80 million acres in 2004 to almost 92 million acres in 2011. Acreage increases have come at the expense of soybeans, wheat and barley. The expansion of corn production has been caused by increased demands for corn by the ethanol industry. In 2011, the ethanol industry used over 5 billion bushels (or 40%) of U.S. corn production.

U.S. corn production in 2011 totaled 12.4 billion bushels, which was 1 percent below 2010 levels, even though planted acreages were larger. Lower total production occurred because corn yields declined from 152.8 bushels/acre in 2010 to 147.2 bushels/acre in 2011. In 2009, corn yields reached a record of 167.7 bushels/acre.

In terms of production, the top four states in 2011 were Iowa (2.4 billion bushels), Illinois (1.9 billion bushels), Nebraska (1.5 billion bushels) and Minnesota (1.2 billion bushels).


Corn prices have increased from an average of $2.00/bushel over the 2004-2005 period to more than $4.00/bushel over the 2007-2011 period. The average price in 2011 was $6.20 per bushel for a total value of $76.5 billion.

The impetus has been an increase in demand for corn by the ethanol production sector. Ethanol production has increased from 3.4 billion gallons in 2004 to 13.8 billion gallons in 2011. Concurrently, the use of corn to produce ethanol has increased from 1.3 billion bushels (16% of domestic production) to 5 billion bushels (40% of domestic production) over the same period.

Increased ethanol production has been spurred by the need for an oxygenate to replace Methyl Tertiary Butyl Ether (MTBE) in gasoline blends. MTBE, a petroleum-based product, was originally used in gasoline as a substitute for lead to prevent pre-ignition pinging. Subsequently, the EPA mandated the use of oxygenates in winter gasoline blends, and later, in year-around gasoline blends as a means for reducing pollution in selected cities. Over the past several years, however, the use of MTBE as an oxygenate has been banned by 27 states because of suspected links between groundwater contamination caused by fuel spills and cancer. Consequently, ethanol has become the oxygenate of choice for meeting EPA blend requirements.

In addition, the Renewable Fuels Standards was created under the Energy Policy Act of 2005 and required that specific levels of ethanol be produced annually. The requirements have been increased over the past several years and have greatly increased the demands for ethanol production and corn.


U.S. exports of corn in 2011 were nearly 45.7 million metric tons (MT) (8% of production and a 10% drop from 2010) and represented 46 percent of world corn trade. Major U.S. corn export destinations included Japan (nearly 13 million MT), Mexico (nearly 8.6 million MT) and South Korea (nearly 6 million MT). Exports to Japan and South Korea fell by double digits, while exports to Mexico increased.

Historically, U.S. exports have represented as much as 70 percent of world trade. But, exports have declined as U.S. ethanol production has increased. About 10 million tons of distillers grain were exported in 2011.


In 2011, the United States imported more than 563,500 MT of corn, an 86 percent jump from the previous year. Canada was the largest supplier of corn, followed by Brazil, Argentina and Mexico.

Value-Added Opportunities

A variety of value-added corn production opportunities exist. Research is on-going with respect to the production of specific corn varieties that are better suited for ethanol production. A variety of niche markets exist for the production of organic corn, popcorn, sweet corn and white (and blue) corn.

Competitive Analysis

The United States has a competitive advantage in the production of corn with respect to the rest of the world. Furthermore, the expansion of the ethanol industry has been responsible for doubling the price of corn over the past few years. This has put pressure on livestock feeding margins and has reduced the production of alternative crops such as soybeans, wheat and barley.

Ultimately, the future of corn prices depends on government policies with respect to the Renewable Fuels Standard (RFS). For example, the RFS dictates that 13.2 billion gallons of ethanol (along with 1 billion gallons of biomass-based diesel and 2 billion gallons of advanced biofuels) be produced in 2012. The RFS is scheduled to require 36 billion gallons of biofuels from all sources by 2022. A relaxation of these goals would cause the price of corn to decline.


Crop Production Annual Summary, National Ag Statistics Service (NASS), USDA. 
Crop Values Annual Summary, NASS, USDA.
Feed Grains Data Yearbook, Economic Research Service, USDA.
Grain: World Markets and Trade, FAS, USDA.
World Agricultural Supply and Demand Estimates, World Agricultural Outlook Board, USDA.

Links checked November 2013.




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