US Corn Growers Face Tight Margins Amid Rising Input Costs
Corn growers in the US are facing tight margins and rising input costs due to various factors. According to Krista Swanson, chief economist for the National Corn Growers Association (NCGA), four key elements are connected and impacting profitability: tight margins, increasing input costs, shifting global trade dynamics, and changes in biofuels.
The US Department of Agriculture projects a 20-year average net farm cash income for 2026, but this does not reflect the actual earnings of farmers. Swanson attributes this discrepancy to increased farm sizes, advanced machinery, higher operating costs, and rising risk levels.
Fertilizer prices make up around 30-40% of corn growers' operating expenses. The US produces approximately 90% of nitrogen products used by farmers. Swanson explained that when global conflicts or trade disruptions occur, such as the closure of the Strait of Hormuz, fertilizer prices can surge due to increased demand from other regions.
A recent NCGA study compared input costs for US and Brazilian farmers. Despite differences in pest pressures, product availability, regulatory structures, and market dynamics, the study found that US corn and soybean producers pay significantly more than their Brazilian counterparts for seed and crop protection products, sometimes even double.