Fundamentally Speaking

It seems like the only one market factor of importance now to the feed markets is the ongoing global trade wars headlines as the grain and oilseeds complex are basically moving in sync with the macro markets at this point.

In the midst of the stock market carnage, the corn market has actually held on rather well as our largest customer, Mexico, appears to have been spared the worst of the tariff levies while the jury still out on the Brazilian safrinha corn crop, accounting for 75% of their total output.

On the other hand, as we head into the 2025 U.S. growing season, this year's corn acreage is up 5.2% from the year ago final (4.73 million acres) which implies production of 938 million bushels (mb) higher than a year ago if one used the USDA February 2025 Ag Outlook corn harvested to planted ratio of 91.6% and yield at 181 bushels per acre (bpa).

We should note that the USDA's Feb Outlook corn yield projection has been below the final figure every year since 2018.

This could be the reason why the national corn yield has been falling short in recent seasons of the government estimate as in addition to adverse weather, increasingly larger amounts of production are coming from some of the lower yielding states, especially in areas of the Plains.

For instance, states like Kansas and North Dakota have seen increased corn acreage sown at the expense of other crops that used to be traditionally seeded there such as spring wheat, minor oilseeds, sunflowers and sorghum to name a few.

Exploring this idea further, this chart shows the state yields of the top 18 corn producing states as a percentage of the U.S. yield looking at the five, ten and then 25-year averages on the left-hand axis.

Reported on the right-hand axis is the percent of each state's corn harvested area over the past 25 years.

The figures in the yellow rectangles are each state's percent of 2024 U.S. corn harvested area.

There really are only six states that have yields consistently above the U.S. yield and those are IL, IN, IA, MN, NE and OH.

The best yields are seen in Illinois where over the past five years their corn yields have averaged 17.3% above the U.S. yield.

This is even higher than the 15-year average of 11.2% better and the 25-year average of 10.6% better, so IL yields have improved relative to the rest of the country.

The same pattern is seen in IN, IA and OH to a lesser extent.

These are also some of the larger producing states with harvested acreage last year 12.1%, 6.1%, 15.0% and 3.9% respectively of total U.S. harvested area.

On the other hand, you have states like CO, KS, NC, ND and TX where over the years their yields have fallen relative to the U.S. average.

As noted, KS and ND have seen their corn acreage increase dramatically over the years, up 83% in Kansas over the past 25 years as they now account for 7% of total U.S. harvested acreage and North Dakota up 291% in corn harvested area from 2000 to 2004 and now accounting for 4.4% of total national harvested area.

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