Analysis released recently by the National Corn Growers Association showed cash corn prices have declined by 16% on average, with several regions experiencing declines of more than 20%, since March 1 as a result of the COVID-19 pandemic. The analysis projects a $50 per-acre revenue decline for the 2019 corn crop.
“The COVID-19 pandemic is being felt across all sectors of our economy,” NCGA President Kevin Ross said in a news release. “This analysis clearly illustrates its impact on corn growers and will be beneficial as we work to ensure they have the resources needed to navigate these very difficult times.”
NCGA commissioned the economic analysis, conducted by Dr. Gary Schnitkey of the University of Illinois, as part of the organization’s efforts to better understand the economic impact of the global pandemic on the corn industry. The information also will be used to help corn farmers and their customers recover from the financial impacts of this crisis.
The analysis was based on cash corn prices as of mid-April, and estimated losses would likely increase through the rest of the marketing year. Further analysis is already underway for the 2020 crop year, with losses anticipated to be higher than those in 2019.
“Corn will be one of the most impacted crops as its two largest uses – livestock feed and ethanol – are under pressure. Impacts of reduced livestock demand are just beginning to come to bear in the market, as livestock processing plants are beginning to be disrupted,” Schnitkey wrote in the report.
An average Price Loss Coverage program payment of $17 per base is projected for corn, which would fall short of covering 2019 revenue losses, underscoring the need for the assistance provided by the U.S. Department of Agriculture’s Coronavirus Food Assistance Program.
Read: Impacts of Coronavirus on 2019 Corn Revenue