Corn has recorded six consecutive quarters of declines, marking the longest losing streak since 1959, according to Bloomberg data. Increased plantings and another abundant harvest outlook have pressured prices. As a result, US farmers are now stockpiling corn at levels not seen in nearly four decades.
The latest data from the US Department of Agriculture shows approximately 91.5 million acres were cultivated with corn this year, which is about 1.5 million more acres than forecasted in March. Estimates from Bloomberg were around 90.3 million.
Corn futures have tumbled on USDA's latest outlook estimate, highlighting crops are in great shape as the July pollination season begins. This has sent prices in Chicago to around $4 a bushel or halved since the market commanded $8 a bushel in April 2022 during uncertainties stemming from the war in Eastern Europe.
Bloomberg noted on Sunday that US farmers are now holding the largest stockpiles of corn since 1988. This is primarily because of high production costs and sliding prices of the grain.
"The US farmers, who are the world's largest corn producers, have been holding off selling early in the season as prices of the key grain slide toward $4 a bushel for the first time since 2020. Russia's war in Ukraine and South American weather woes in the last few years have given US farmers an edge when competing for a share of the global demand," the media outlet said.
Meanwhile, sliding grain prices and elevated production costs are toxic for farmers. A recent USDA forecast shows farmers are poised for another year of financial misery.
USDA expects the largest income drop since 2006 and back-to-back years of financial pain by the end of this year.
"With this expected decline, net farm income in 2024 would be 1.7 percent below its 20-year average (2003–22) of $118.2 billion and 40.9 percent below the record high in 2022 in inflation-adjusted dollars," USDA wrote in the report.
Simultaneously, farmers are witnessing a rapid decline in their leading role in the global grain market. Decades of corn export dominance were shredded by Brazil last year. And Argentina recently shipped the first cargo of corn to China in 15 years.
