October 23, 2018

Corn is King in Kossuth County

By Karl Setzer, Risk Management Team Leader

There is an old adage in the market that “corn is king,” and nothing could be more true for Kossuth County. Corn production in Kossuth County has been on a steady incline for the past several years, and shows no signs of slowing down.

In 1997, farmers in Kossuth County seeded 299,000 acres of corn. The average yield that year was 147.2 bushels per acre for a country production figure of 44 million bushels. Within twenty years this yield grew considerably. By 2016 the average county yield had grown to 204.7 bushels on 334,000 acres according to Farm Service Agency and U.S.D.A. data. This gave the country a production figure of 68.4 million bushels of corn.

The real noticeable increase in corn yield and production came in the early 2000’s. In the year 2001 the county corn yield was 138 bushels for an average. Just a year later this average jumped to 171 bushels per acre. Even in the drought year of 2012 the country yield only decreased to 164.6 bushels as most soils in the country yield better when dry rather than having excess moisture to contend with.

There are several reasons for the steady growth in corn yield. The main one is simple improvements to farming practices as a whole. Today’s farmers are planting much higher quality genetics than just a few years ago. Many of these are able to withstand insect pressure as well as adverse weather. This was proven last year when the corn crop seemed resilient to drought conditions. We have also seen practices such as variable rate fertilizer applications and variable rate seeding, which plant higher populations on parts of fields where yields tend to be higher.

While we have witnessed increases to corn yields and production in the county, more is needed. This is from the fact that demand has grown at a greater pace than production has, causing the country to import corn from other areas. If one would draw a circle with a fifty-mile radius of Algona, corn consumption is nearly 1 million bushels per day. This means country corn production is only a little over a two-month supply.

The big push for corn in the country came in the 1990’s with the expansion of hog production. This was most noticed in the southern half of the country. Within ten years the ethanol boom started, and created a large demand base in the northern half of the country. Since then corn demand has steadily increased in counties surrounding Kossuth, creating even more competition for corn stocks. As a result, corn values in the regions have went from being some of the poorest in the nation to the strongest in just a few short years. This demand has also helped isolate our market from many of the factors that used to impact prices when corn exports were more common.

For more information, you may contact Karl Setzer at 1-800-383-0003, or e-mail at ksetzer@maxyieldgrain.com. The opinions and views expressed in this commentary are solely those of Karl Setzer. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position.

 

 

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