While wheat production in the United States (US) remains in fifth place this season, the country is the largest producer of soybeans and maize. The acreage of these products has been increasing for years, although the limit of growth seems to be in sight.
The US produced more than 2018 million tons of corn in the 2019/365 season, which was grown on an area of 35 million hectares. This is immense when compared with the potato areas in the major potato producing countries in Europe (EU-5). That area does not even amount to 700.000 hectares.
Corn production is declining
The US has been number 1 in corn production for years. China and Brazil are numbers 2 and 3 and produce 257 million tons and 94 million tons respectively. However, the position of the US has been declining somewhat in recent times. More than 20 years ago, the US still produced approximately 65% of global corn production, while now it is only 33%.
The soy acreage in the US is even larger. Since the soy yield per hectare is significantly lower, corn production in America in the 2018/2019 season will amount to 123 million tons. This also leaves the country behind its other competitors, although Brazil is breathing down the US neck with a production of 117 million tons. Argentina comes to 55 million tons.
Borders in sight
As for wheat production, the figures are less impressive. The country currently occupies fifth place, with a production of approximately 51 million tons. The European Union, China, India and Russia clearly produce more. On the other hand, the US is the second largest exporter of wheat after Russia. There also seems to be a realization that the US is approaching the limits of this production.
Why? Well, because at some point the world simply doesn't want to take anymore from the US. This is also evident from the fact that the country's position (in terms of corn production) has declined considerably. This is not because the US produces less. On the contrary, because production has grown by almost 20% over the past 50 years. The conclusion is that the other countries are growing faster, making them less dependent on the US.
Ethanol production will decrease
In addition, the demand for corn will decrease because ethanol production decreases. This production is highly subsidized, although it is known that the number of subsidies is decreasing. The growth in the number of electric cars and the decrease in the use of combustion engines also means that less fuel will be used. On the other hand, oil-producing countries will still want to sell their oil, which could result in a price drop. This may make ethanol even less interesting.
According to analysts, an important factor for the decline in demand is that consumers are consuming less and less processed food. Not only in the US, but also in the European Union. Sales for human consumption fell by 2009% in the period from 2016 to 17, according to figures from analyst firm Food Dive. The decline in meat consumption also has a major influence on this.
Too much soy production
According to Karen Braun, an analyst, soy production has been too high for years compared to consumption. This is evident from, among other things, figures about the Chinese purchase of soybeans; These have increased for years in a row. However, the pace of growth has slowed since 2016 and a decline has even been visible since 2017. This is mainly because China has started producing more soybeans itself, or has them produced in the Black Sea region.