A new analysis released by the National Corn Growers Association projects a drastic drop in 2020 revenues as a result of the COVID-19 pandemic with impacts persisting into 2021.
The latest analysis projects a $59 per acre average revenue decline for the 2019 corn crop and an $89 per acre average revenue decline for 2020, compared to pre-COVID-19 projections. If realized, the 2020 crop year revenue would be the lowest corn revenues since 2006. Residual impacts from COVID-19 on corn prices are very likely to persist into 2021 and possibly beyond.
The analysis was conducted by Dr. Gary Schnitkey of the University of Illinois using projections for 2019, 2020, and 2021 for pre-COVID and post-COVID scenarios. It follows previous analysis built on market numbers to date, along with estimates of state-level impacts, conducted as part of NCGA’s efforts to better understand the economic impact of the global pandemic on the corn industry and work to create solutions to help corn farmers and their customers recover from the financial impacts of this crisis.
The analysis found a comparison of pre-COVID and post-COVID scenarios indicate:
- Price declines associated with the 2019 crop will result in revenue losses. Even after accounting for increases in the 2019 Commodity title and CFAP payments, total revenue declines by $15 per acre on the 2019 crop.
- For 2020, a post-COVID price of $3.20 per bushel and a national yield of 179 bushels per acre results in crop revenue of $573 per acre. Crop revenue of $573 would be $49 per acre below the average crop revenue from 2014-2019. $573 would be the lowest crop revenue since 2006.
- PLC payments on the 2020 crop would result under the post-COVID price scenario. Even after accounting for PLC payments, post-COVID revenue projections are well below the 2014-2018 average for total revenue. Without additional federal aid, revenue and incomes will be extremely low for corn farmers in 2020.
- Low revenues likely will persist into 2021, particularly if trend yields or higher occur in 2020, leading to large ending stocks for the 2020 marketing year. Corn farmers will find 2021 a challenging income year under likely supply/demand scenarios.
NCGA President Kevin Ross shared the analysis with Congressional leaders and urged they use it to aid in the development of future legislative efforts to mitigate the pandemic’s impact and help farmers and their customers recover.