USDA reports push corn prices lower benefiting livestock producers

By Andi Anderson

The annual Acreage report released last week by USDA-NASS revealed larger-than-expected corn acreage, putting downward pressure on corn prices.

The report listed corn acreage at 91.5 million acres, which is 1.4 million acres higher than the March Prospective Plantings report had projected. Corn prices, which surpassed $6 for the 2022/23 marketing year, are now below $5 for the current marketing year and are projected to be closer to $4 for the 2024/2025 marketing year.

Although higher than previously projected, corn acreage will be slightly lower than the 2023 totals. However, favorable growing conditions are supporting higher yield expectations compared to 2023.

The latest WASDE report estimated a yield of 181 bushels per acre, up from 177.3 bushels per acre last year. Stronger yields could result in corn production for 2024 being similar to the 2023 total.

USDA Quarterly Grain Stocks Report, released last week, provided estimates of corn stocks held on farms. Total corn stocks on June 1st were estimated at 5 billion bushels, up 22 percent from 2023 and the highest June 1st total since 2020.

Most of these stocks are still being held on farms as farmers await better pricing opportunities. On-farm corn stocks were just over 3 billion bushels, roughly 800 million more than last year, and the largest June 1st total since 1988.

Overall, this news is positive for livestock producers. The key takeaway is that corn production and stocks are expected to be plentiful, and corn prices are back to lower levels after a surge a few years ago.

This should continue to bring relief to livestock feed costs and reduce the cost of gain for cattle. While this year’s corn crop is not yet harvested, and production risks remain, the current combination of record-high cattle prices and moderate corn prices is favorable for cattle producers.

By keeping an eye on these trends and reports, farmers and livestock producers can better plan for the future and adapt to changing market conditions.

Photo Credit: usda