Plot a Course for Corn Missouri

The path to success is marked by a drive for diversification and making the most of an operation's unique advantages.

Angelo Erickson (Progressive Farmer image by Jim Patrico)

TARKIO, MISSOURI. White corn is considered a niche market in U.S. agriculture, but it's a focal point on the Ericksons' family farm.

With only 751,000 acres of this crop produced domestically each year, buyers are demanding more direct delivery methods to reduce contamination risks. That has the ring of opportunity for Angelo Erickson.

"It's what we're investing in, and it's where we believe our future lies," he says. "We are working with a company now hoping to supply them with non-GMO white corn. A key part of that is the ability to take that risk of contamination out of the equation."

About half of U.S. white corn is produced under contract to buyers or end users, most requiring the corn be identity-preserved to maintain value in end uses. This adds to production costs but also yields price premiums. Recent estimates put an average premium at 30 to 60 cents per bushel. The Ericksons have seen as much as $1.50 premium in past years.

Domestic use of white corn has shown modest growth, accounting for about 50% of U.S. production today. Exports account for the other 50%, and Erickson believes tariffs are stifling growth in this area.

"On the whole, we are very optimistic about the future of farming. I wouldn't be doing this if I weren't. But the tariff situation has me concerned," he notes.

Production costs are another ongoing challenge. Even with smart planning and economies of scale across an operation of more than 4,000 acres, Erickson says it's impossible to cash-flow today. They need corn in the $4.50- to $4.75-per-bushel range. "It's almost impossible to cut costs anymore," he adds. "You don't want to cut back on fertilizer. So, you try not to buy more machinery and hope what you have lasts through the downturn."

This year, he says no one in his area is expecting record production to offset low prices. As their season neared an end, Erickson anticipated average yields under 200 bushels per acre. Volatile markets, unreliable government market reports and the strain of economic loss in the region concern him moving into the new year. As for Market Facilitation Program payments, he sees those as nothing more than a Band-Aid.

"Here's the thing: Farmers want to farm," he concludes. "We want to produce a crop and get paid a fair price for it. When a government payment means the difference between going out of business and being able to farm, something is wrong."

Corn Outlook 2020 from DTN Analyst Todd Hultman:


The final story has yet to be told for the 2019 crop. After corn growers saw some of the worst planting conditions in the modern era for the 2019 season, it remains difficult for the industry to know just how big the U.S. corn crop is as the season wraps up. Immature corn and wet harvest conditions have been part of this fall's challenges and could put new-crop ending stocks somewhere between 1.6 and 1.9 billion bushels.


In early 2020, a bearish factor for U.S. corn prices comes in the form of increased competition from South America. Larger 2019 corn crops for both Brazil and Argentina increased their total corn-export projection levels by more than a billion bushels compared to the previous season. This increased competition has already taken a toll on U.S. corn exports for the 2019-20 season and will make it difficult for exports to reach USDA's projection of 2.05 billion bushels.


South American weather problems early in 2020 are one of the few scenarios that might allow July 2020 corn to trade above $4.25 by late May, when the next wave of South American crops start to ship.


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