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The Uses of Corn: Industries Affected by High Corn Prices

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The uses of corn

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Corn Beyond the Cob

Corn or maize is the second most-produced crop in the world, and it’s more than just a staple in our diets.

From the sweetener in our coffees to the ethanol that powers our vehicles, corn has hundreds of uses. Consequently, high corn prices have a domino effect that can affect many supply chains and possibly even increase the cost of our weekly groceries, especially if they include tortilla chips.

This infographic uses data from the National Corn Growers Association to break down U.S. corn use by segment in 2020, and the products that a bushel of corn can produce.

The Uses of Corn in the U.S.

While corn on the cob is quite popular, not all corn is sweet. There are five major types of corn grown around the world, and each one differs in taste and uses. Of these, yellow dent corn or field corn accounts for the majority of commercial U.S. production.

Here’s a breakdown of U.S. corn usage in 2020:

SegmentBushels Used (millions)% of Usage (2020)
Feed5,65038.7%
Ethanol (Fuel)3,87526.6%
Exports2,55017.5%
Ethanol (Animal Feed)1,0757.4%
Sweeteners7805.3%
Starch2301.6%
Cereal/Other2151.5%
Beverages/Alcohol1701.2%
Seeds300.2%
Total14,575100%

Corn accounts for more than 96% of U.S. feed grain use and production. As a result, animal feed makes up nearly 40% of the country’s corn usage. This is because corn is a rich source of carbohydrates, and in combination with protein from soybeans, it can make for an effective diet for livestock.

In the United States, federal mandates require vehicles to use a blend of gasoline and biofuels like ethanol—94% of which is produced from the starch in corn grain. Therefore, a large portion of U.S. corn goes into ethanol production.

Interestingly, the ethanol distillation process produces a co-product known as dried distillers grain, which serves as low-cost, protein-rich animal feed for livestock. On average, the U.S. ethanol industry produces around 90,000 tons of distillers grains each week.

Animal feed and ethanol production collectively make up around 73% of U.S. corn usage. Other uses of corn include the production of sweeteners, starch, cereal, and alcoholic beverages like whiskey.

Breaking Down U.S. Corn Exports

The U.S. is the world’s largest producer and exporter of corn and accounted for roughly 36% of exports in 2020.

Up until 2019, the majority of U.S. corn exports went to Mexico, Japan, and Colombia. China wasn’t among the top 10 destinations, but this changed in 2020.

u.s. corn exports

Between January 2020 and 2021, U.S. corn exports to China increased exponentially, reaching an all-time high in December. China’s massive import appetite is because of a shortage of domestic supplies amid rising demand for feed from its recovering hog-herd, which was hit by the African swine fever in 2018.

Consequently, China became the third-largest importer of U.S. corn in 2020 after Mexico and Brazil. What’s more, the U.S. Department of Agriculture projects that China’s corn imports in 2021 will be much higher than 2020 levels, and the majority of those will be sourced from the United States.

The Corn Price Boom

In addition to a drought-induced yield cut in Brazil, rising demand from China has driven corn prices to their highest level in the last eight years.

price of corn

Since the beginning of 2020, corn prices have increased 68% and stand at around $6.50 per bushel as of May 19th.

The rise in corn prices is likely to affect several industries and could translate into higher prices for our groceries, including cereals, taco shells, and corn syrups. Additionally, it could also push up the price of gas due to its key role in ethanol production.

Corn, in a Bushel

In a world where commodities like corn are often taken for granted, it’s important to think about how valuable it can be.

A single bushel of corn can provide 33 lbs of sweetener, 31.5 lbs of starch, or 22.4 lbs of polymers. It’s also enough to produce around 3 gallons of ethanol fuel and 16 lbs of distillers dried grains for animal feed.

The uses of corn go far beyond the cob, and just like other raw materials, it supports many industries that make modern life possible.

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Agriculture

The Fertilizer Market: 4 Things Investors Need to Know in 2023

What factors are impacting the fertilizer market in 2023? Here are four trends driving global fertilizer demand.

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Graphic showing the top importing and exporting countries for fertilizer
The following content is sponsored by Brazil Potash
Fertilizer market and what investors need to know in 2023

4 Things Investors Need to Know About the Fertilizer Market in 2023

Food security is of crucial importance many reasons—from ensuring both political and social stability, to supporting the health of the global economy.

You may be surprised to learn that fertilizer plays a crucial role in food security by enhancing the quantity and quality of harvests. In short, fertilizers can make food more affordable and accessible.

The above infographic sponsored by Brazil Potash digs into four major trends currently impacting the demand of fertilizer. Let’s break them down here.

1. Feeding 10 Billion People by 2050

The world’s population is increasing rapidly and is expected to reach nearly 10 billion by 2050. This growth is particularly strong in developing countries where food security is already strained.

As the population grows, more crops are needed to support global food systems. Increasing crop production is essential and the fertilizer market is a critical ingredient in improving crop yields.

2. Less Farmland

After around 10,000 to 12,000 years of reshaping land for agriculture, the amount of arable land on earth is declining.

Based on the agricultural expansion predicted to take place between 2010 and 2050, an estimated 593 million hectares of agricultural land—nearly twice the size of India—will be needed.

With little room left to grow, fertilizers will take on an increasingly critical role in boosting crop production.

3. The World Needs More Fertilizer

The global fertilizer market was valued at $163.2 billion in 2021 and is expected to reach $203.5 billion by 2027, growing at a CAGR of 3.9% during period of 2022-2027.

As population growth continues to drive demand for increased crop production, investment in fertilizer production is essential to meet this growing demand.

4. The Global Fertilizer Supply Chain

Supply chain disruptions in the fertilizer market puts global food security at risk.

Farmers’ ability to access a consistent and affordable fertilizer supply directly affects crop yields, production, and food prices. 

Increasing the supply of domestically produced fertilizer in countries heavily reliant on imports will support low-cost, sustainable, in-market fertilizer for farmers who need it.

Let’s break down the top five fertilizer-exporting countries based on value, according to Statista.

Country Value of Fertilizer Exports, 2021
🇷🇺 Russia$12.49B
🇨🇳 China$11.47B
🇨🇦 Canada$6.61B
🇲🇦 Morocco$5.71B
🇺🇸 United States$4.05B

On the other hand, here are the top five fertilizer-importing countries, based on value from the same source.

Country Value of Fertilizer Imports, 2021
🇧🇷 Brazil$15.16B
🇺🇸 United States$10.29B
🇮🇳 India$9.12B
🇫🇷 France$2.8B
🇨🇳 China$2.77B

Russia currently dominates the fertilizer market as the largest exporter based on dollar value at approximately $12.49 billion dollars, while Brazil is the largest importer of fertilizer based on an import value of approximately $15.2 billion dollars.

Investing in Brazil

Large agricultural producers that rely heavily on fertilizer imports, such as Brazil, would benefit from a local supply that farmers can easily and affordably access to improve crop production.

Fertilizer company Brazil Potash is engaged in the extraction and processing of local potash ore to increase yields and strengthen crop growth in Brazil.

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Interested in learning more? Click here to learn about how you can invest in the fertilizer market with Brazil Potash.

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