Corn Feed Demand Analysis – 10/25/2023

Animal feed has dropped from 60%+ of total US corn use in the 1980s  to less than 40% in the last decade. Nevertheless, feed use is still the largest single usage category and the most price elastic.  

The accompanying scatter uses US corn feed usage per Grain consuming animal unit (GCAU) as a function of farm level corn price for the October/September crop year. We have marked USDA’s current usage forecast for 2023/24 with USDA assumptions for animal units, farm level corn price and feed usage. Note that the plot for last crop year (2022/2023) read high on the scatter, probably due to record livestock returns.  USDA’s plot for 2023/24 also reads high but only marginally.

Odds favor a modestly larger feed usage total than USDA projects, but not enough to significantly alter the US corn supply usage balance as forecast this month. Corn price shocks this winter are more likely to come in the US corn export category while  consumption in the other  categories (fuel production and food use) are pretty much set.