Corn prices are down, and acres in Texas and across the U.S. are expected to follow as improved overall growing conditions could deliver above average yields, according to a Texas A&M AgriLife Extension Service expert.
Mark Welch, Ph.D., AgriLife Extension grain marketing economist in the Texas A&M Department of Agricultural Economics, Bryan-College Station, said corn acres were expected to be down, but higher yields are expected thanks to improved soil moisture levels.
Welch said Texas corn acres were expected to drop 16% from 2.5 million acres in 2023 to 2.1 million acres, according to the March Prospective Plantings report from the U.S. Department of Agriculture. Corn acres in the U.S. were expected to drop 5% to 90 million acres this season. The final national acre total could swing one way or the other by up to 1 million acres, he said.
The acreage drop should not be a shock, Welch said. Prices are lower than they were last year, and the 10-year average for Texas is about 2.4 million corn acres.
Much of the corn fields in the southern half of Texas have been planted and most of those fields have emerged. Growers planning to put in corn in the High Plains and Panhandle regions were expected to begin planting soon and sowing will follow throughout the U.S. Corn Belt.
Welch said producers could still decide to go with other crops like sorghum, cotton or soybeans based on input cost considerations, production expectations and expected prices in their local markets. He noted that acres in Texas harvested for hay and other forages were up by more than 1 million acres since 2022. This could be a sign that producers may be trying to capture more value in forage crops due to higher beef cattle prices and drought limiting forage supplies.
“With any crop, it’s not just what you plant, it’s how many acres make it to harvest and how much grain you harvest,” he said. “There could be a reduction in planted acres in grains and still an increase in production due to a better harvested percentage and better crop conditions this season.”
Supply and demand weighing on corn prices Conditions so far are shaping up for a good Texas corn crop, Welch said. Soil moisture levels have improved significantly in coastal and Central Texas, which have both seen shifts from cotton to grains, specifically corn, in recent years.
But better growing conditions don’t always translate to more profit potential, he said. Corn prices have dropped over the past year based on supply and demand factors.
Cropping conditions improved for Texas farmers, but soil moisture has also improved in the nation’s Corn Belt. Some areas of the major corn-producing region remain drier than normal, but soil moisture levels have improved significantly as planting nears. Better growing conditions suggest at least the potential for average to above average yields, Welch said.
National corn yields have improved each season by an average of 2 bushels per acre since 1950, Welch said. Better commercial fertilizers, better management practices, improved plant genetics that optimize yields along with traits like disease and pest resistance have all contributed to crop performance. Technologies used to plant seeds and harvest grain have also contributed to better yields.
Despite drought in Texas and swaths of the Midwest, Welch said corn producers averaged 177 bushels per acre, a record, in 2023. He suspects that trend to continue and would not be surprised if averages hit 181 bushels per acre this season.
As the potential for supplies remains high, demand for corn has remained static or increased only marginally, Welch said.
Demand for feed and fuel – 39% of the 2023 corn crop went to livestock feed while 37% went to ethanol production for gasoline – has not returned to pre-pandemic levels. That combined with larger than normal corn stocks have fueled the price declines, he said. Corn stocks surpassed 2 billion bushels compared to 1.3 billion at this time last year.
“That bigger supply increase has depressed prices,” Welch said. “That number is a significant shift year-to-year, and despite the expectation to plant fewer acres, we should expect to harvest a better percentage of them and there is potential for even better yields. Those projections mean we could see corn stocks pushed beyond 2 billion bushels.”
Texas corn facing bearish market Corn prices were $4.65 per bushel late last week, Welch said. That is $2.50 below the per bushel price this time last year.
That decline is significant for producers. Profitability calculations are different for every operation, Welch said, but the break-even price for corn has been in the $4.70-$5 range the last few years.
Texas producers do have an advantage in the various corn markets, Welch said. They are the first to plant and harvest. If their corn arrives at grain elevators in August before the Corn Belt harvest gets underway, producers can find better marketing opportunities.
But Welch said this is not the year for producers to wait for higher prices. He expects there may be 10-15 cent increases here and there throughout the season, and that if contracts are available, it may be worth locking in a price bump.
There are a few factors that could positively influence prices for Texas producers as the season progresses, Welch said. There may be some looming concerns about the corn crop in Brazil, which is experiencing levels of drought.
Poor yields from Brazil could improve export prospects for U.S. farmers. But demand from China, the world’s leading corn importer may be dampened by increased production in 2024, lower feed use due to low pork prices, and the nation is holding two-thirds of the world’s corn ending stocks in reserve.
Welch expects exports to Mexico – the No. 1 importer of U.S. corn – should remain strong, and that other global factors like the conflict between Iran and Israel and the Ukraine-Russia war could weigh on commodities across the board.
Whether Texas growers find better prices selling early harvested corn to localized buyers or can access export markets, Welch said they should seek any price advantage in this market.
“There are a lot of domestic and global factors that have contributed to the current market,” he said. “The speculative traders on corn and soybeans are the most bearish we’ve seen in 20 years of data. Right now, the recipe is not there for higher prices, so any chance our producers can get to lock into advantageous pricing, that could be a positive.”
FARWEST
The average reported temperatures for the week were a high in the 90’s and a low in the low 40’s. Precipitation was reported in a large portion of the region over the weekend. Average rainfall was between a trace and 2.3 inches, significantly boosting crops.
Larger totals should help build a little soil moisture in the profile. The lower totals barely freshened up the top and kept the ground from blowing. Significant rainfall was still needed. Corn and sorghum were doing well. The watermelon crop was looking good. Insect pressure was minimal, and weed control was continuous. Mesquites were beginning to bloom. Pastures should benefit from this rain, especially in the northern region.
The livestock stocking rate has slightly increased due to recent rains. Livestock were in fair condition. Producers started working with young lambs. Producers continued feeding livestock and wildlife. Producers across the area were forming plans for the summer heat.
WESTCENTRAL
Warm weather decreased all moisture. Rainfall ranged between 1 to 3 inches in numerous counties. Producers cut and baled small grain fields for hay and planted summer forages in fields. Peach trees were setting fruit, and vegetable planting increased.
Several producers planted Sudan grass for hay and grazing. Sorghum planting continued, with some already emerging. Pecan crops were suffering. The wheat crop was mostly in good condition. Stock tank and lake water levels were dropping. Rangeland and pasture conditions were declining due to limited rainfall. Cattle conditions looked good.
SOUTHWEST
Dry conditions persisted, accompanied by strong winds. Recent rains have been a welcomed sight in some areas.
Mostly overcast skies with humidity and drizzle; some areas reported heavier rains over the weekend, totaling almost 1 inch. Some also reported a hailstorm, resulting in moderate damage to row crops, but no damage to livestock production has been reported. Cooler weather prevailed over the weekend. Cool-season hay fields continued to grow and were ready for harvest, while warm-season grasses continued to emerge.
The continued mild conditions allowed the first cutting of hay to begin harvest. Livestock markets were holding steady to high. The moisture received came just after corn and cotton had been planted. Sorghum was planted slightly later this year, but all were planted, with a good portion emerging. All oats will be used for forage. Most of the winter wheat was cut green and baled for livestock forage this year. Pastures remained green, and evidence of fertilization and weed control was apparent in some areas.
Despite the ongoing drought, producers remained optimistic about summer as they continued to fertilize, although they were still selling stock due to the arid conditions. Rangelands remained dry as spring lambing and kidding concluded and spring shearing continued. Producers were managing to hang on by heavily supplementing livestock and wildlife.
Due to the current drought, very few brush species were leafing out. Overall, crops and pastures were looking good due to the recent rains.