Like many other corn growers, I have been poring over supply and demand estimates for this year’s crop and next year’s and wondering how the heck we will ever get the two numbers within shouting distance of each other. The demand numbers seem fairly obstinate: the protein sector (feed) is struggling; ethanol is up against the wall; and exports are already robust. Not much help there, except
in incremental nudges.
Meanwhile, the supply figure is swelling ominously. This year is just a continuation of increased output thanks not just to our production skills but also to seemingly ever more acres planted to corn. Given the dismal prices for wheat as well, even Plains producers are considering corn as the lesser of two losers.
Corn Conundrum. Here in the U.S., we love to grow corn and to date have not been particularly troubled by this singular obsession. Monocultures hold no menace for us. But something fundamental about corn production has been going on for a few years that we pretend not to notice because acknowledgement would roil our political and cultural identities.
Climate change has expanded the globe’s suitable production areas. Corn is beginning to share the Wheat Curse—“you can grow it anywhere.” Although corn is not quite to the “anywhere” level, adding two weeks and 2" of rain to higher latitudes such as the prairies of Canada, coupled with ingenious plant breeding, means we’re not the only corn store in the mall anymore. More importantly, former customers will be able to fulfill demand domestically.
Lost in the “warmest (insert month) ever” streak of global warming records is the fact warmer air holds more water. In fact, for each degree Fahrenheit it’s about 4% more, which is a lot for a cloud. This makes the news in the form of “rain bombs,” massive rain events such as the one in Houston this summer.
Although we were warned decades ago by climatologists that climate change implied longer and more frequent droughts, and larger and more frequent rain events, I think we focused mostly on the first repercussion. After all, with subsidized crop insurance, a drought can raise revenue even at ground zero. Many dismissed both threats as politically driven nonsense.
The U.S. Global Change Research Program projects by mid-century, my part of Illinois will have a summer climate similar to Arkansas today. By 2100, it could be like eastern Texas. The buckle on the Corn Belt is moving up faster than a Florida retiree’s, instead of centering on the “I” states.
There is not much we can do immediately to cope with these unfolding prophesies, but they should prompt us to rethink how we address the real economic danger: very low prices because of oversupply.
Maybe our aversion to metric measurements is a bigger blind spot than we realize. We tend to spend too little time and analysis on global supply and demand. Although we are still the dominant producer, newly climate-enabled locations in Europe, Russia, China and especially Canada can respond to corn demand, often at much lower costs.
Think Globally. I expect calls for supply management, such as increased CRP acres, to become more strident this winter. But such efforts might not work as well as during the ‘80s. We can temporarily starve demand with some planting reduction scheme. We could also relearn how quickly customers encourage other suppliers to grow more.
Corn is becoming a free-range crop, not an American exclusive. Even with unhelpful governance abroad, more acres will see more stalks. Our policy for the future should come to grips with a bigger playing field and focus on lowering costs to compete with new players. For corn, climate changes everything.