A report from Rabobank titled "Can Corn Keep Up?" says that structural shifts in U.S. corn production are decellerating yield growth. The report explains, "We believe that changes in production geography to less productive land and reduced crop rotation render it unlikely that improvement in U.S. corn yields will increase world grain stocks from their historically low levels ... with yield not increasing fast enough to keep up with demand, pressure to grow corn on more acres will increase until demand softens or new technology accelerates yield growth."
Rabobank notes that over the short-term, yield growth trends give the probabability of production keeping up with demand needs around 50%. Over the long-term, this declines to an only 20% probability according to the report.
The report lists the following as an explanation for a decelleration of the yield curve:
- Increased vulnerability to weather with the expansion in corn acres.
- Less rotation reduces yield growth in high production states.
- Already-optimal plant popultation per acre present a near-term growth challenge.
- Breakthrough technologies not likely to have an immediate impact on national yields.
- Technology-resistant pests to challenge yield growth.
- Expected yeild growth is likely below USDA's estimate.
Rabobank estimates expected yield for U.S. corn in 2012-13 at 156 bu. per acre, with a range of 146 bu. per acre to 168 bu. per acre. This is well below USDA's baseline projection of 164 bu. per acre for the coming marketing year.