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Niche Corn Opportunities
Revised April 2022
Organic crop production is a rapidly expanding segment of agriculture in the U.S. Between 2016 and 2019 (the most recent census of organic production), the number of farms using organic production techniques rose from 14,217 to 16,585 and the number of certified acres from 5.0 million to 5.5 million. U.S. certified organic corn acreage for grain or seed increased from 213,934 in 2016 to 319,953 in 2019. The estimated value of the sale of organic corn was $278 million in 2020. The majority of this production was used in organic feed rations and the remainder was used in food products. More than 90% of the organic corn production in the U.S. is used domestically. Future growth in organic corn production will depend on increased demands from both organic livestock producers and final consumers.
In 2002, the U.S. Department of Agriculture (USDA) established a set of national standards that food labeled as "organic" must follow. Following these standards, organic corn must be raised without the use of synthetic pesticides, fertilizers or corn hybrids with trans-genetic modifications (GMOs). Furthermore, there is a three-year transition period between when conventional practices are used and when a field can be certified as organic. To ensure that appropriate production methods are being applied at the farm level, government-approved inspectors evaluate organic operations to validate that approved USDA organic practices are being used. In addition, companies that elevate, transport, or process organic grains must also be certified by the USDA.
Certified organic corn was grown in 44 states on 319,953 acres in 2019. Corn is the second largest organic grain/seed crop after organic wheat (451 million acres). The states with the largest production of organic corn are: Iowa, Nebraska, Minnesota, Wisconsin and Michigan.
Yields tend to be lower under organic production as the crop cannot be protected with pesticides and weed control is more demanding. Providing adequate fertility using organic sources can be challenging and more expensive. However, the price premium associated with organic grain almost always offsets the lower production and greater input cost if reasonable yields can be obtained. Organic production practices can be knowledge intensive and developing a network with other growers can be helpful in learning best practices. Weed control and soil fertility management are two areas that require very different approaches when compared to conventional practices. There are many online resources, some of which are listed below, that can help guide a new grower.
State-specific information on organic corn production and market opportunities can be found, at the National Organic Program Web site at: www.ams.usda.gov/nop. This site also provides a list of local certifying agencies.
The price premium for organic corn can be substantial over conventionally produced corn. There are growing market opportunities for organic corn in both the food grade and animal feed segments. Each segment will have distinct quality requirements and potentially different points of sell. The animal feed market is the largest of the two and is expected to grow at a faster pace than the food grade segment. In the food grade segment, the greatest demand may be for white and blue corn types. Identifying market opportunities and product delivery systems prior to planting is recommended.
- Accredited Certifying Agents, National Organic Program, Ag Marketing Service (AMS), USDA. Current database of certification agencies and other helpful resources.
- Organic Production: Alternative Farming Systems Information Center-USDA. Identifies resources about sustainable food systems and practices, including current updates on regulatory and marketing issues.
- Market Trends, Organic Trade Association.
- Marketing Organic Grain, 2005, Appropriate Technology Transfer for Rural Areas (ATTRA), National Center for Appropriate Technology (NCAT). Organic grains can be successfully marketed at premium prices. To achieve the best prices, growers need to understand and build relationships with buyers, find markets for most of the crops in the rotation, meet quality standards, be able to store the crop if necessary and be able to contract most of their crop to reliable buyers.
- National Organic Grain and Feedstuffs, updated regularly, AMS, USDA. Includes a biweekly summary for organic grains and feedstuffs and a weekly feed and seed summary.
- Organic Agriculture, Iowa State University Extension and Outreach. Information from production to marketing, including resources for certification compliance.
- Organic Grain Buyers, Iowa State University Extension and Outreach. This website provides contact information for Midwestern organic grain buyers.
- Organic Crop Exchange.
- National Organic Program, AMS, USDA. Governing body for organic standards, labeling and regulations. Includes a list of state by state certifying agencies and regulatory changes.
- Organic Trade Association - Covers current industry news, events and links related to organic food processing, production and marketing.
- Grain - Center for Integrated Agricultural Systems, University of Wisconsin-Madison. Publications relative to organic grain production and marketing in Wisconsin.
- Organic Farming Research Foundation, Santa Cruz, California. Working for the improvement and widespread adoption of organic farming. Focused on research, policy and grants. Numerous organic research project results and ongoing production projects.
- Leopold Center, Ames, Iowa. Links to research findings and other publications about organic and sustainable crop production.
- Organic Farm Performance in Minnesota-2011, 2012, Minnesota Department of Agriculture.
- Organic Grains and Oilseeds for Animal Feed, 2011, Cooperative Extension Service, University of Kentucky- College of Agriculture.
- Organic Field Corn Production, 2002, ATTRA, NCAT.
- Organic Crop Production Enterprise Budgets, Iowa State University Extension and Outreach.
- Organic Commodities, North Carolina State University Extension. Resources on production and marketing organic commodities including corn.
Popcorn is a special type of field corn (Zea mays) with a vitreous kernel that expands and pops when heated. Early varieties of popcorn can be traced back thousands of years. North American explorers observed Native Americans eating popcorn and using it in necklaces and headdresses. European settlers in the U.S. served popcorn as a breakfast cereal with milk or cream. However, popcorn did not become commercially popular until the Great Depression when it became attractive as a low-priced snack. During World War II, much of the U.S. sugar supply was diverted to the war effort. Hence, candy manufacturing was greatly curtailed, and popcorn was used as a substitute by many consumers.
Most of the world’s popcorn is produced in the U.S. The major producing states are Indiana, Nebraska, Ohio, Illinois and Missouri. Total popcorn production in 2017 (most recent data) was estimated at 1,071 million lbs and was produced on 221,264 acres and had an average yield of 4,840 lbs per acre. Popcorn yields much less in similar environments than the more commonly grown dent corn due to less genetic yield potential. Popcorn, however, is commonly grown under irrigation, particularly in the parts of Nebraska where irrigation is used for other row crops.
Popcorn varieties are quite different from either sweet corn or field corn varieties. White, yellow, red, and black kernel popcorn varieties are available, but only white and yellow (both small and large kernels) are commonly grown commercially. There are two main types of popcorn. One, when popped, produces a compact mushroom shape that is favored by processors that coat their products, while the finer textured butterfly shape is typically favored as a snack for popping at home. Currently single cross hybrids are used that contain no genetic modifications (non-GMO) and fields must be isolated from other field corn types to ensure both popping quality and the absence of GMO traits. Most production practices for popcorn are similar to those recommended for field corn.
Nearly all of U.S. popcorn production is contracted with processors. Because of contractual arrangements and thin markets, most popcorn is produced under irrigation. More than 80% of U.S. production is consumed domestically. Although popcorn is often associated with consumption in movie theaters and at sporting events, away-from-home consumption represents only one-third of total popcorn consumption. Domestic popcorn sales accelerated in the 1980s with the advent of microwaveable popcorn. By 1995, microwave popcorn accounted for 65% of all popcorn sales. The market share increased to 72% by 1999.
Because popcorn is a snack food, it faces substantial competition from other products. However, popcorn’s versatility and nutritional attributes helps it compete with other snacks. Popcorn is low in calories and fat, and high in carbohydrates. Weight Watchers® recommends popcorn as a snack for the weight-conscious. The American Dental Association® endorses popcorn as a sugar-free snack. The American Cancer Society® recognizes the benefits of its fiber content. Demand in the more traditional segments of the of the market has been softening as consumers’ tastes appear to be shifting from popcorn to other processed snack foods. Within the popcorn industry, competition centers on flavoring and packaging. In the unpopped category, nearly all companies offer microwaveable packaging. This packaging form not only meets consumer convenience demands, but also allows for a variety of flavors. The ready-to eat segment is expected to offer new growth in the demand for popcorn products as these products are convenient and can be offered in a wide range of flavors and toppings. Demand for popcorn is expected to continue to increase globally in the next decade.
Popping quality is important in maintaining marketing value. The major factors that influence popcorn quality are kernel moisture, expansion ratios, and popping ratios. High-quality popcorn has a moisture content of 13.5%. Expansion ratios refer to the volume of popped corn per gram of unpopped kernels. Some varieties expand to over 40 cubic centimeters per gram. In addition, kernel moisture and expansion ratio are also related to popping ratios. Popping ratios represent the proportion of kernels that actually pop during the popping process. The highest-quality popcorn has at least a 98% popping ratio.
The Popcorn Promotion, Research, and Consumer Information Act was signed in 1996 and the Popcorn Board was established in 1998 to help processors promote and strengthen popcorn markets both domestically and internationally. Funds, collected from industry members are used by the Popcorn Board for generic promotion, the provision of consumer information, and investments in market and related research.
- Popcorn Board - Web site for the board, a national commodity promotion and research program funded by U.S. popcorn processors. Also in Spanish.
- Popcorn: Enterprise Budget, 2010, Beginning Farmer Center and the Leopold Center, Iowa State University Extension.
- Popcorn Production Census Data - 2017, Quick Stats, National Ag Statistics Service (NASS), USDA.
- Popcorn, Specialty Corns for Value-Added Grain Production, Ohio State University Extension.
- What’s Popcorn Really Worth? 2007, Ohio State University.
Only about 3% of U.S. corn production is used for human consumption annually. Of that, white corn accounts for less than 1%. However, demand for white corn is increasing as U.S. Latino populations expand and the popularity of Hispanic cuisine grows. White corn is the preferred grain color for use in Mexican-style and other corn-based foods including tortillas, corn flakes, corn meal, grits and hominy. White corn hybrids are basically dent corn, like their yellow counterparts, with white kernel color and whiter starch. Genetically they may only differ in a gene for grain color. White corn, when marketed may not contain more than 5.0% of other corn colors. White corn requires isolation from yellow corn types as kernel color is regulated by the genetics of the pollen grain. Care in drying is important to avoid kernel cracks. End-users require stricter aflatoxin and fumonisin levels than non-food grade markets and are often tested for their presence.
Food-grade white corn is grown in several states, but Texas and Nebraska are the leading producers with Indiana, Illinois, Iowa, Kentucky and Tennessee also producing significant quantities. The U.S. Federal Government does not track white corn production statistic. Nevertheless, an estimated 700,000 acres were planted to white corn in 2005, compared to 430,000 acres in 1990. During the 2011-2016 production years the total production in the U.S. was estimated to be between 90.5 and 157.5 million bushels, suggesting a further expansion in white corn acreage. Genetic improvements in white corn hybrids have kept pace with yellow types so yield increase over time have been similar.
White corn must be identity-preserved to maintain its value in end-use products. Producers must minimize cross-pollen contamination from yellow corn, and in some cases, genetically-modified varieties. To maintain necessary isolation requirements, producers use isolated acreages or pay neighboring yellow corn producers to maintain a 660-feet buffer zone between yellow and neighboring white corn fields. These isolation requirements add to production costs. Other factors that increase production costs include handling requirements and low-temperature drying, which is needed to reduce kernel stress cracks.
Increased production costs must be offset by price premiums relative to yellow corn production. Premiums range from $0.30/bushel to $0.60/bushel depending on specific contract and quality standards. End-users or processors often pay growers additional premiums (as much as $0.30/bushel) for meeting various additional quality factors including #1 grade, hardness, cleanliness, kernel size and kernel color.
Domestic use of white corn has experienced modest increases of 4% to 7% over the past several years. Processing practices must preserve the identity of white corn from harvesting through processing. Nearly all white corn is delivered to specific delivery points where it is cleaned and dried. For several large end-users, the specified delivery point is their processing plant. Some growers choose to dry corn on their own farms, provide storage, and then deliver on demand.
Much of the U.S. white corn is produced under contract to buyers or end users. Many contracts stipulate varieties and numbers of acres planted. Several major white corn processors and numerous small processing facilities process food-grade white corn. Major white corn users and millers include PepsiCo-owned products labeled under Frito Lay, Quaker Oats and Archer Daniels Midland (ADM). Milling product lines including Azteca and Martha White. Frito Lay has a large presence in Nebraska and Illinois. Illinois and Indiana provide white corn for Azteca.
The United States exports about one-third of its white corn production. Exports grew substantially during the 1990s. Almost no white corn was exported in 1990, but about 40 million bushels (out of 100 million bushels of domestic production) were exported in 1999. However, exports declined to about 35 million bushels in 2010.
Mexico grows more white corn than yellow corn because of the country’s focus on food rather than feed production. Nonetheless, Mexico’s production usually does not meet domestic demand. Hence, Mexico has historically been the largest U.S. white corn export market. In 2009, Mexico represented 54% of the U.S. export market. Mexico imported 19 million bushels of white corn followed by Columbia (4.3 million bushels), Honduras (3 million bushels), Costa Rica (2.3 million bushels) and Japan (1.9 million bushels). In recent years exports of white corn to Mexico have increased in line with the increase in population in Mexico, while corn exports in general have increased much more rapidly, due to a more rapid increase in demand for corn for animal feed.
- Corn, Economic Research Service (ERS), USDA.
- Feed Grains Database, ERS, USDA
- Value-Enhanced Grains 2005/2006 Report, 2006, U.S. Grains Council.
- The Growing Corn Economies of Mexico and the United States, 2019, Economic Research Service, USDA.