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Canada Markets
Thursday, July 23, 2026 10:33AM CDT
Canada Markets 07/23 10:20
That Dreaded Corn Yield Debate Is Back
An overstated yield for 2025-26 could leave the market with unrealistic
expectations for 2026-27 corn production.
Mitch Miller
DTN Contributing Canadian Grains Analyst
No one dislikes arguing about a national crop yield more than myself -- but
here we go again. As much as I don't want to, with the global corn supply
issues developing (drought reducing Europe's corn crop while Ukraine exports
are at risk) which will almost surely result in a significant increase in U.S.
corn export demand, the topic is too important to avoid.
Trying to count 17 billion of anything is going to have errors, but when
that being counted is spread across an entire country in everything from a
commercial storage facility to a backyard bin, and everything in between -- you
can't avoid a margin of error. USDA would be no exception, especially given the
extraordinary circumstances employees were dealing with during the downsizing
efforts in 2025.
Production totals are routinely revised in the following September WASDE
report as necessary; but in the meantime, the feed and residual use category is
the catch-all for any potential errors. And current USDA yield and production
figures for 2025-26 corn certainly appear to contain significant errors.
The topic of yield was a very contentious one last summer and many were in
disbelief at the final USDA estimate. It appears they had good reason. The feed
and residual use total for 2025-26 (in green on the accompanying chart) is
almost 1 billion bushels (bb) more than 2024-25 (912 million bushels (mb) to be
exact). Yet the grain-consuming-animal-units (GCAU) are almost identical. For
more than a decade, USDA has used GCAU to account for all the various forms of
animals being fed and by how much, trying to standardize feed requirements as
various animal totals fluctuate. For 2025-26, the GCAU figure is essentially
flat at 100.14 compared to 100.09 the year before, suggesting no change should
be expected in feed use. That leaves residual use to make up the difference,
suggesting last year's production was overstated based on quarterly grain
stocks reports.
So, why does that matter now, you might ask? If the ending stocks estimate
is correct due to the offsetting amounts, is it important to consider? The
answer to that is the impact the data may be having on unrealistic expectations
going forward.
Warren Buffett once famously suggested, "Only when the tide goes out do you
discover who's been swimming naked." An overstated yield for 2025-26 could set
unrealistic expectations for the 2026-27 yield, resulting in the realization
that corn is swimming naked in a sense with inadequate supplies to satisfy
record demand.
The problem is that the 912 mb lower production as implied by the feed and
residual use data suggests the corn yield for 2025-26 was overstated by 10
bushels per acre (bpa). It's worth considering that 176.5 bpa would be far more
reasonable, especially considering the stresses impacting some of the
top-producing areas, adding credibility to the theory.
That would have an impact on the trendline yield calculation. Especially if
you are like me and question if we are in an era of diminishing returns on
genetic and technological improvements. If you consider just the 10-year
trendline yield, leaving out the dramatic improvements seen decades ago, it
comes in at just under 177 bpa for 2026-27 (when 176.5 bpa is used for
2025-26). And such an outcome could be very problematic, especially considering
the potential for increased exports.
Such a yield with all the other components of supply and demand in the
balance sheet remaining unchanged, would drop 2026-27 corn ending stocks to
just 1.26 bb -- an unrealistically low level. And all of the other components
don't look like they will remain unchanged from the July WASDE update with both
old- and new-crop corn exports now looking like they are currently too
conservative. With Europe's drought-damaged corn crop, their imports are likely
to hit record levels at a time when one of their two main suppliers, Ukraine,
goes offline due to Russian attacks, leaving the U.S. to do much of the heavy
lifting as South America focuses on increasing their own domestic use.
So, everyone can now resume the less-than-pleasant debate over the potential
crop yield out there, not to mention the old crop still getting cleaned out of
the bin.
I welcome feedback along with any suggestions for future blogs. My daily
comments can be found in Plains, Prairies Opening Comments and Plains, Prairies
Quick Takes on DTN products.
Mitch Miller can be reached at about:blank
Follow him on social platform X @mgreymiller
(c) Copyright 2026 DTN, LLC. All rights reserved.
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