Many factors impacting profitability of corn producers

NORMAL, Ill. — Tight margins, rising input costs, shifts in global trading and changing biofuels are all impacting U.S. corn growers.

“These four things are not separate stories — they are all connected,” said Krista Swanson, chief economist for the National Corn Growers Association.

“The U.S. Department of Agriculture shows the net farm cash income for 2026 is expected to land at the 20-year average,” she said during a presentation at the Generations of Women in Agriculture Across America event, a project of the Illinois Agri-Women.

“You would expect 20 years of experience, effort and hard work to show up in your earnings, but it does not work that way on a farm.

“Farms have been getting bigger, machinery is getting more sophisticated, the cost to cash flow a farm has increased a lot and the amount of risk it takes to capitalize that farm has also increased.

“So, we have more acres, risk, machinery and management for the same real return. That is the situation farmers are in right now.”

However, there is a huge deviation around the average depending on various factors such as how much land a farmer owns or rents.

“When you buy your fertilizer can make a big difference or how you market your crop, so some farms are feeling the pressure more than others,” Swanson said.

Fertilizer makes up about 30% to 40% of operating costs for corn growers, the economist said.

“There have been a few years in the past five years where buying fertilizer in the fall versus in the spring has made a really big difference in the overall farm budget,” she said.

The United States produces about 90% of the nitrogen products that farmers apply to their land.

Therefore, Swanson said, farmers were questioning why there were huge spikes in fertilizer prices when the Strait of Hormuz was closed.

“Fertilizers like other agricultural commodities are global commodities,” she said. “If I am a buyer of fertilizer from another part of the world and I normally buy it from the Middle Eastern region, now there is a conflict and a huge jump in price, I am going to buy it from the U.S.

“The reason our prices spiked, even though we are producing it here, is it had to increase to keep the fertilizer here. Otherwise, it would go to other places in the world, so there are a lot of dynamics happening that can be difficult to understand.”

Earlier this summer, NCGA released a study that looked at the cost U.S. farmers pay for inputs compared to farmers in Brazil.

“We partnered with a global research firm and they used data points from thousands of farmers in both countries,” Swanson said.

“Making comparisons across two countries is difficult because the pest pressures are not the same, products that are used are not always exactly the same, the regulatory and tax structure is different and the farm sizes and market structure is different,” she said.

“When we stripped out all the differences possible, we found that U.S. corn and soybean producers pay substantially more than the Brazilian price for seed and crop protection products — and sometimes even more than double.”

One of the exciting things for corn producers is exports, Swanson said.

“We are exporting over 3 billion bushels of corn right now, which is impressive,” she said. “This is a really good thing, because last year we produced a record 17-billion-bushel corn crop.”

However, the U.S. market share of corn exports in terms of volume has changed significantly.

“In 1990, the U.S. had 75% of the global market share, Argentina had 7%, Ukraine had 1%, the rest of the world had 17% and Brazil was not even in the picture,” the economist said.

For the upcoming marketing year, she said, the U.S. market share is expected to be 40% of the global corn exports, with Brazil at 21%, Argentina at 18%, Ukraine at 10% and the rest of the world at 11%.

“That shows the growing competitiveness of Brazil in the global market,” Swanson said.

“For many years U.S. agriculture has been competitive globally because we are the most productive and efficient producers of commodities like corn,” she said.

“The 17-billion-bushel corn crop we produced in 2025 is seven times larger than what we produced in 1925 on fewer planted acres, but the problem is that productivity is not translating to profitability right now.”

Ethanol has been an important driver for corn demand.

“As we look ahead to the coming decade, the amount of motor gasoline we expect to use is declining,” Swanson said.

“Securing year-around, nationwide E15, I believe can make a difference in the short term,” she said. “But as we think longer term, even a higher percentage share of an overall declining market share is still declining in the long run.”

Therefore, the NCGA is doing a lot of work to think about ethanol beyond on road use.

“If corn-based ethanol could capture 10% of the global maritime fuel market, that would be 3 billion bushels of corn per year,” Swanson said.

“If we can capture 10% of the sustainable aviation fuel market, that would be 5 billion bushels of corn per year,” she said. “And if we can capture 10% of the bioeconomy product market, that would be over 6 billion bushels of corn per year.”

So many products that people use and wear have petroleum in them, that include things like plastic water bottles and activewear, which could be replaced with corn-based ethanol.

“This is not an abstract idea,” Swanson stressed. “I have tights made from corn-based ethanol from corn grown in Iowa.”

There are products in the works, but it will take innovation and policy changes to move them to large scale production.

“This is where we need a lot of people advocating and working with Congress to get an environment established where these things can grow,” Swanson said. “Because it can make a big difference.”