Corn is King

May 19, 2005

May 19, 2005

Corn is king in Illinois, Iowa, Nebraska and many mid-western states and on thousands of farms. Last week, on our family farm in Illinois, I was inspired and excited to look down the rows of tiny corn plants spiking through the black soil. It's a new crop year -- new hopes and lots of uncertainty. The thrill of growing and producing something that you can see, touch and measure is one of the farming addictions that we can't escape.

Corn is such an important crop and the uses continue to expand. The export market consumes 2 billion bushes (about 17% of our crop) with cattle feeders chewing up almost as much. Chickens, pigs and dairy cows each eating away more than 1 billion bushels. Twenty-five years ago, ethanol's use of corn was so little you couldn't even measure it. Today, corn for ethanol is pushing one and one-half billion bushels and still rising.

If you are making and selling a product of any kind, you always want to be number one or two in the market. Well, the U.S. is by far number one in corn production in the world. We grow 43% of the corn in the world. Our closet competition is China at 18%. Everyone else is in single digits.

I know that corn prices now are disappointing with a 2 billion bushel carry-over this fall. However, may I remind you that the 2000 carry-over was almost as high and in three short years, it was cut in half. Demand for corm is on a growth path. Consumers around the world want more meat and those meat animals eat corn. We all know that weather is the wild card in growing crops. Corn yield was 160 bushels per acre last year while three years ago it was 130 bushels.

All I can say is as erratic as production and prices can be for corn, you can't ignore the positive long-term outlook.

Until next week, I am John Block from Washington.