02/27/2025 USDA Forum Report, Cold Storage

On the Grains
The first estimates for 92 million corn acres were made in October 2024. At that time, the corn/bean ratio was 2.5 (Dec corn $4.37/November $11.00), so the billion-dollar question is, how many did we buy since then? Before putting the numbers on paper, I would have said more than the average trade guess. It is realistic to think that we could return to the $11 mark or higher on a combination of fewer acres and weather problems for soybeans, and some can’t handle the additional workload of all that corn. If we gain a significant amount of corn acres, it will likely come from the fringe acres. When I say significant, I am referencing 95 million or more estimates, and it is highly unlikely that the USDA will move the needle that far. Next, we consider the trendline yield, which is 181 BPA. We have failed to make trendline yields in the last six growing seasons, and increasing marginal acres doesn’t support that. The other factor I feel is important if we plant these acres is that it’s only marginally profitable or less of a loss (depending on your individual cost structures). We are not working with the difference between making $300 an acre on corn and $150 an acre on beans. It’s a slight profit vs a loss. The point of my story is, if we had wildly higher prices, those corn acres would get the full meal deal, vs. today, they might get planted on an insurance guarantee- leading me to be skeptical of a 181 trendline yield.