Corn Industry Trends

Tom Lilja

tom@ndcorn.org

December 18, 2013

Ag Revolutions

Mechanical – 1794 Cotton Gin

Chemical – Post World War II

Financial – 1980’s collapse

Biotechnology – mid 1990’s

Protein Revolution today?? Or Logistical??

Fundamental Demand Changes Occurring

3

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

World PopulationMillions

4

Chinese Domestic Corn Feed Demand

0

20

40

60

80

100

120

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

MMT

5

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

1980 1984 1988 1992 1996 2000 2004 2008 2012

Per Capita GDP Rates in SE Asia

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

1982 1986 1990 1994 1998 2002 2006 2010

China India

6

Delta in World Meat Demand

0%

50%

100%

150%

200%

250%

300%

BRIC EU & US

Doubting Thomas

Malthusian Theory – population is inclined to increase more rapidly than the supply of food that such growth necessitates

Can we disprove Malthus?

Yield Enhancement Drought Tolerance

More Corn Per Acre

North Dakota Yield Variability 28% 1975-1995

0

10

20

30

40

50

60

70

80

90

100

1975 1979 1983 1986 1988 1992 1995

ND Avg Yield

North Dakota Yield Stability 15% 1997-2010

0

20

40

60

80

100

120

140

1997 1999 2001 2003 2005 2007 2010

ND Avg Yield

What Helped Stabilize Yield?

• Corn Borer trait (Bt) introduction 1997 Southeast North Dakota

NK 3030 115 bushels / acreNK 3030BT 141 bushels / acre

• Roundup Ready technology in corn and soybeans has not stunted plant growth as with traditional chemicals

• Corn Rootworm Traits• Stacking of Traits

Supply Side Economics ??

90 bushels / acre – mid 1990’s

115 bushels / acre – 2012

25 extra bushels across 3.5 million acres

Or Bonanza??

87.5 million more bushels x $6.67 USDA

$584 million more to ND economy

$2.47 Billion (2004-2008) CAPTS, NDSU

$9.7 Billion (2008-2012) CAPTS, NDSU

Land UseAmount of landto produce onebushel of corn

Soil LossSoil loss per

bushel, above atolerable level

Irrigation

Irrigation wateruse per bushel

EnergyEnergy used toproduce one

bushel

Climate

Emissions perbushel

Corn’s Impacts, 1987-2007

37% 69% 27% 37% 30%

Pesticide Use TrendsIncreasing adoption of hybrids with insect-resistant and

herbicide-tolerant traits have greatly reduced the need forsynthetic applications of herbicides and insecticides.

Insecticide Pounds Per Acre Herbicide Pounds Per Acre

Source: USDA

0.35

0.3

0.25

0.2

0.15

0.1

0.05

0

3.5

3

2.5

2

1.5

1

0.5

01990 1992 1994 1996 1998 2000 2002 2005

1990 1995 2000 2005

Actual

Corn Growers BecomeMore Efficient With Nitrogen

COMMERCIAL NITROGEN APPLIED PER BUSHEL OF CORN PRODUCED1980 - 2006 ACTUAL & TREND TO 2030Pounds per Bushel

1.80

1.60 Trend

1.40

1.20

1.00

0.80

0.60

0.40

0.20

0.00

1980 1985 1990 1995 2000 2005 2010 20202015 2025 2030

Source: Blue, Johnson & Associates, Inc.

Source: Blue, Johnson & Assoc. Inc.

Enjoy the Value Added Summit

Contact Info

Tom Lilja – tom@ndcorn.org

Greg LaPlante – greg@ndcorn.org