USDA Corn Yield Estimate Under Fire Amid Discrepancies
The recent USDA estimate of corn yield for 2025-26 has sparked controversy among experts. The feed and residual use total for this year is almost 1 billion bushels more than the previous year, but the grain-consuming-animal-units (GCAU) are nearly identical. This suggests that last year's production was overstated based on quarterly grain stocks reports.
Warren Buffett once said, 'Only when the tide goes out do you discover who's been swimming naked.' An overstated yield for 2025-26 could lead to unrealistic expectations for the 2026-27 yield, resulting in inadequate supplies to meet record demand. The problem is that the lower production implied by the feed and residual use data suggests the corn yield for 2025-26 was overstated by 10 bushels per acre.
This would have an impact on the trendline yield calculation, which could be problematic considering potential increased exports. With Europe's drought-damaged corn crop, their imports are likely to hit record levels, and one of their main suppliers, Ukraine, is going offline due to Russian attacks. This leaves the U.S. to do much of the heavy lifting as South America focuses on increasing their own domestic use.
The potential for a low yield in 2026-27 could drop corn ending stocks to just 1.26 billion bushels, an unrealistically low level. The USDA's estimate is based on various forms of animals being fed and by how much, trying to standardize feed requirements as animal totals fluctuate.
The GCAU figure for 2025-26 is essentially flat at 100.14 compared to 100.09 the year before, suggesting no change should be expected in feed use. The offsetting amounts suggest that the ending stocks estimate may be correct due to the offsetting amounts.