U.S. corn stocks will be relatively abundant in the near term, never dropping below 2 billion bushels at their lowest point, according to forecasters. Ordinarily, large supplies mean low prices, but two agricultural economists say a season-average price of $4.80 a bushel could be the new normal for corn.
“Corn prices of $4.80 may appear elevated in nominal terms but are much closer to past experience when adjusted for inflation,” wrote Joe Janzen of the University of Illinois and Jason Franken of Western Illinois University at the farmdoc daily blog.
Season-average corn prices were below $4 a bushel the last time that corn ending stocks—the amount of corn in storage at the end of the marketing year—were consistently above 2 billion bushels, following the 2016, 2017, and 2018 harvests.
“The U.S. corn market is adjusting to the idea of a relatively large crop and big ending stocks in 2023/24,” wrote Janzen and Franken. Futures prices “have settled into the $4.70 to $4.90 range” for corn at harvest time, they said. “Elevated economy-wide price inflation and higher interest rates are major differences between the last period of high U.S. corn ending stocks in 2016-2019 and today.”