Will Corn Be the Breakthrough Crop in 2025?

Here is how feed, exports and ethanol may affect a farmer’s/rancher’s crop production strategy.

Corn planting acres may increase as markets and memories have farmers recalling a good year in 2024. 

With a mix of supply, demand and market dynamics aligning, the corn story remains one to watch in 2025.

Strong feed use, record weekly ethanol production, robust exports and potential weather-driven challenges in South America create an encouraging outlook for corn, says University of Missouri Extension agricultural economist Ben Brown.

He predicts a slight rally in corn futures early in 2025, which could influence U.S. farmers to plant more corn.

“Producers will remember how great it was harvesting corn in 2024,” Brown says, suggesting that price signals at planting might push additional corn acres onto the balance sheet in the coming year.

Corn demand for feed

From a supply standpoint, the U.S. currently has the largest corn supply ever recorded, including carryover stocks from the previous year. While a large supply can sometimes drag down prices, Brown sees this as a demand-driven story with positive implications for corn.

The Southeast, particularly Georgia and the Carolinas, faced more crop production challenges. While not major corn producers, these states have a massive corn demand as feed for poultry and hogs. Given the shortage, states such as Missouri are shipping corn to the Southeast to fill in the gap.

“The feed demand category has been very strong,” Brown explains. “And I think feed use will be something that helps us and helps our price basis as we move through the winter months.”

Excited for ethanol and exports

Corn ethanol was strong in 2024, breaking the all-time weekly production record three times.

Brown compared the ethanol demand driver in the corn market to star athletes like Kansas City Chiefs football players Travis Kelce and Patrick Mahomes, saying, “You want your best players performing well consistently across the board, and it’s doing just that.”

Still, he said it is important for the corn industry to look for other players to pick up some opportunities. He finds it in the potential future growth of sustainable aviation fuel.

“I don’t know what the tax credits for sustainable aviation fuel that come out of the Inflation Reduction Act will look like,” Brown adds, “but it is an opportunity down the road that could help move corn ethanol demand higher.”

Another promising place to seize on demand is exports.

Brown points to traditional corn buyers like Colombia, Japan, Korea and Mexico showing increased demand. “All four are at levels very much higher than where we’ve seen them in the past.”

He sees the potential for U.S. exports to fill gaps created by lower corn acreage in Argentina, which cut its planting by 20% because of disease issues.

Weather woes boost corn demand

The weather could also further tip the scales in favor of U.S. corn.

Brown expressed concerns about La Niña conditions affecting South America’s second corn crop, which follows the soybean harvest. With Argentina already facing lower acreage, any weather issues could create even greater potential yield reductions and lead to stronger global demand for U.S. corn.

“January and February are setting up to be a very strong period for corn demand,” Brown says. “It’ll help basis levels. I think we’ll see a little bit of a rally in corn futures markets.”

All of this comes right when producers in the U.S. are getting ready to plant.

For now, the corn outlook is a bright spot in the agriculture economy, Brown concludes, offering opportunities for U.S. farmers.

EDITOR’S TAKE:

With corn being the largest cash crop in the U.S., Brown’s analysis offers a pleasantly optimistic outlook for 2025. The combination of increasing demand and usage, coupled with lower plantings and production in South America, comprises a perfect storm that favors U.S. corn production. Farmers/ranchers will look carefully at these factors when determining how much seed and what type of fertilizer they will order this winter for spring planting. Overall, this is very good news for corn producers. Put them on your customer prospect list and be sure to target them through AgTruckTrader.com.