Grain Farming
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Industry Overview
The grain farming industry includes about 240,000 farms with combined annual grain revenue of $70 billion. No major farms dominate. Major grain seed production companies include Monsanto, Syngenta, and DuPont. The average annual total revenue per grain farm is $300,000. The industry is highly fragmented: the top 10 percent of farms generate one-third of total industry revenue.
Grain farming is the growing and harvesting of wheat, corn, rice, and other grains. The industry also includes grain seed production and farms that grow grains in combination with oilseed crops. Field (also known as grain or feed) corn is not to be confused with sweet corn, an edible variety not included in this industry.
Competitive Landscape
Demand is driven by government policies and consumer trends in eating grains, meat, and corn sweeteners, like high-fructose corn syrup. The profitability of individual companies depends on maximizing crop yield and minimizing disease risk. Large companies have advantages in highly mechanized operations and access to the latest in genetically modified (GM) grains. Small operations can compete effectively by specializing in organic or non-GM grains. The industry is highly labor-intensive: average annual revenue per employee is $85,000.
Grain farms compete against oilseed and vegetable crops for farm acreage, as farmers tend to plant and harvest crops with the highest yield and payout. Field corn competes against crushed oilseed as a livestock food source.
Products, Operations & Technology
Major products include corn (75 percent of the market) and wheat (20 percent). Other products include rice, sorghum, barley, oats, and rye. Half of all field corn is used for livestock feed. Field corn is also used in industrial applications like biodegradable plastic; processed foods like breakfast cereal, salad dressing, margarine, soft drinks, and syrup; and ethanol fuel production.
Corn is the nation's largest crop, accounting for 25 percent of all US farm acreage and grown in all 50 states. Each year, farmers produce around 12 billion bushels of field corn on 80 million acres of farmland, compared to sweet corn, which grows on only 650,000 acres. Nearly all corn is hybrid, which provides a higher yield, responds better to fertilization, and can better withstand large-scale mechanical harvesting. Modern field corn is bred to grow only one large ear per stalk. Corn seed can cost anywhere from $50 to $300 a bag, depending on how much the corn has been genetically modified; a bag of seed plants about three acres of corn. The average corn farm is around 700 acres and yields 140 bushels per acre (around four tons of shelled corn).
Corn is planted in spring after the danger of frost has passed. Wheat is planted in fall to allow its root system to develop during the winter. Farmers must accurately measure the number of seeds per acre, as crowded seeds can delay maturity and stunt growth, while low plant populations result in poor yields. Corn needs only moderate amounts of water, but irrigation may be required during drought. Heavy spring rains can create muddy soil, which can rot corn seedlings.
Farmers harvest corn for grain when the plant's moisture content is around 28 percent. Corn silage, used for livestock feed or ethanol, is picked earlier, as it requires a moisture level of 50 to 70 percent to encourage fermentation during storage. Short-season corn hybrids can be harvested about 110 days after seed emergence; full-season hybrids take around 125 days to mature. A combine threshes the corn from the stalk, removes the husks, shells and cleans the corn, and collects grain in a holding tank until it's unloaded and moved on- or off-farm for storage.
Field corn must be dried to lower moisture content. Corn can be naturally air-dried or heated in a storage bin. Airflow moves from the bottom of the silo up, so that the grain on the top is last to dry and is easiest to survey for moisture.
Farmers typically grow grains in a crop rotation with oilseed or broadleaf plants. Planting the two crops in succession improves weed control, lowers pest and disease risk, and requires less fertilizer.
Common inputs include seed, fertilizer, chemicals for weed control, fuel, electricity, machinery, and repairs. Fertilizer, soil conditioning, and manure can run from 25 to 40 percent of operating costs, depending on the type of grain. Labor costs tend to be very low in grain farming.
Recent technological advances include new strains of hybridized corn; improved fertilizers and chemicals for controlling weeds, pests, and disease; and the genetic modification of corn engineered to resist weed-killing agents, mold, and disease. Farm machine innovations have improved seed planting, threshing, and the transfer of grain to silos and elevators.