Episode Transcript
[00:00:00] Speaker A: Welcome to Missouri Corn Talk, your go to weekly agriculture podcast delivering fast, reliable updates on market development efforts, ethanol demand, and the issues shaping today's corn industry. I'm your host, David Geiger. As growers continue navigating another year of tight margins, there's increasing attention on the cost side of the balance sheet. A new report from the National Corn Growers association compares what farmers in the United States pay for seed and crop protection products versus their largest global competitor, Brazil. The findings show American farmers often pay significantly more for many of the same inputs, raising important questions about competitiveness and long term profitability. Joining us today is Krista Swanson, NCGA chief Economist. She helped lead this research. And today we'll break down what the numbers mean for Missouri corn growers and how the corn industry is working to improve the economic outlook for America's farmers. Krista, thanks so much for joining us. And what did this report uncover?
[00:00:54] Speaker B: We already know that US Corn growers are among the most productive farmers in the world. They're the most efficient farmers in the world. But this report really shows that productivity alone cannot overcome a persistent input cost disadvantage. I think the other big thing that this report does for us is it puts real data behind what growers have been feeling in their budgets for a long time.
You know, I think it continues to show that the cost side of the balance sheet matters just as much as corn prices. Growers focus a lot on commodity prices, but that profitability piece depends on what it costs to raise a crop. And this, this report, again, it uncovered, put some data behind that, that US Farmers are often paying significantly more than Brazilian counterparts for major seed and crop protection inputs.
[00:01:48] Speaker A: When you look at this report, then can we just see some general comparisons? What are we looking at in terms of US Corn farmers versus the South American farmers that you were studying?
[00:02:01] Speaker B: Yeah. So a few of the key takeaways here. Again, you know, US Farmers, this, this showed that farmers were paying consistently more across a lot of these key inputs. This study focused on C seed and those crop protection products like fungicide, herbicide, and insecticide. Unfortunately, you know, we, we also think a lot about fertilizer, but Kinetic, the data firm who we worked with on this, they have a longer term, more robust data set on these products. And fertilizer is something that they just launched in 2025 as a trial. So we dug into the products that we have. So that was the focus. And it found that US corn seed prices on average were 68% higher than Brazil from 2023 to 2025. Some of the fungicide comparisons showed US products at more than double Brazilian levels. Some of the herbicide comparisons approached double Brazilians prices. And US for corn insecticide prices averaged 87% higher over the same period.
And the analysis, again, it focused on those categories. We. Because that's what was available in the data. But I think the bigger thing here is less about those numbers that I just threw out and those differences, and more about the fact that even when we accounted for currency rate differences, even when we tried to strip this down as much as possible to as close as possible to a similar comparison, because making international comparisons is really difficult because there's so many differences.
And so I think what I've been focusing on is that these differences were really big and really consistent, no matter how we slice it or dice it. And looking at, and looking at the different views, and that's what gets my attention.
[00:03:49] Speaker A: You know, my first thought when this was brought up was essentially South America has two negatives when it comes to using some of these products in South America. First off, they don't have winter kill like we do up here. They don't. And second, they'll double crop. So I think, oh, maybe they're just getting a bulk discount of some kind. But 68% seems like a pretty, pretty massive premium for bulk discounts. So what is some of the primary contributing factors to their prices being so much lower?
[00:04:19] Speaker B: I don't have all the answers. I think what this does is it helps us ask better questions to launch some of those conversations and dive deeper into what is driving these. I mean, we know there are some real differences.
Farm sizes are different on average in Brazil than in the US and certainly that has some impact. There's also not the retail structure in Brazil like there is here. So you know, when you have extra middlemen in the picture that they're taking a piece of that as well. So that's a difference. The products that we use are not always the same because there's different press pressures. There's also different policy and regulatory environments, like the cost burden of bringing a new product to market, the accessibility of generics into the marketplace. And so there is a whole slew of factors that are likely contributing to that difference. Now, I think a future step here is to figure out what share of that difference is due to those different potential factors.
[00:05:22] Speaker A: As you know, we have seen four years of very difficult times for American corn farmers.
A lot of that has to do with the amount of output we're seeing from South America, just how much corn they're bringing. To market as well. So when you look at global competitiveness and local losses, what is the factor that you are paying attention to most now that you know, as you said, what questions to better ask?
[00:05:51] Speaker B: Yeah, well, certainly this is all about global competitiveness. I mean, Brazil, as you just noted, America's largest competitor in our global corn markets. So if their production costs are lower, they gain an advantage in the marketplace. And even though during the US we're producing some of that highest yielding corn in the world, that is a really big deal. You know, the growers listening to this conversation right now and the farmers who are our members and on I'll use myself as an example here on our farm, what most of us in the US Are growing is number two, yellow corn.
Similarly, in Brazil, they're growing number two, yellow corn. We're all selling that same product into a undifferentiated global commodity market. And that's why this difference in cost is such a big deal. And I'll note too that this matters for the future because as we think about some of our future demand opportunities that are going to be so critical to the sustainability of our industry into the future, some of those depend on sustainability and efficiency that the US can have an advantage in. But unfortunately, when we think about competitiveness, another issue here is the difference in how our contributions to sustainability are calculated. And that's a whole nother factor that just exasperates this input cost problem. And certainly something, you know, Missouri Corn and National Corn Growers association working to level the playing field, I think through the inputs task force that NCGA created last fall, which this report is a, is a product of some of the work that that task force has done. We're seeing grower leaders really coming together to advocate for transparency and increased competition and policies and regulation that can help improve access to affordable crop inputs and strengthen American agriculture.
[00:07:47] Speaker A: I'm glad you brought up the task force because that's something Missouri corn growers have also been working alongside NCGA with.
As you take a look at that local level, what does controlling costs or strengthening affordability of some of these crop inputs during difficult and trying times for farmers when every single margin matters at
[00:08:14] Speaker B: the local level or at the farm level. The problem is, and this is part of the problem that feeds into this report too, is that in the United States, farmers don't often have many choices for the products that they're using and they don't necessarily have very many choices of who to buy them from either. And so you're kind of limited in terms of farm management, you can cut back and sometimes that's what farmers end up having to do to save costs. And that's why the work that our organizations, Missouri Corn, ncga, that we're doing is so important because both building demand and controlling costs must happen together. And that's why the investments and digging into some of the input cost side at the same time, thinking about those new markets, how these two are linked together, also really important. So you know, again at this, at the same time we have to think about how can we reduce unnecessary input costs, also support market access for our products. We can help improve profitability from both sides of the ledger.
[00:09:15] Speaker A: Krista, is there anything else about this report you'd like to make a note of?
[00:09:18] Speaker B: Yeah, I would just say that this report really feeds into this overall theme or platform that corn has been operating on this year. You know, with it being the 250th anniversary of the United States, we've been playing into that with the America's Crop for America's Future theme. It's also forced us to think a lot about the past, the present, and what the future looks like. Thinking about how has corn grown on American farms for the last 250 years looked what are the challenges of today and what needs to change for the future? This input cost part is part of it because like I said, that building demand and controlling costs, it happens together. And really the ultimate goal is a stronger future for American farmers.
[00:09:59] Speaker A: Chief economist with the National Corn Growers Association, Krista Swanson, joining us today. Krista, thank you so much again for your time.
[00:10:07] Speaker B: Thanks so much for having me on.
[00:10:08] Speaker A: This new report reinforces something many farmers have suspected for years. Staying competitive is about more than growing a great crop. It also means ensuring America's farmers have access to fairly priced inputs that allow them to compete on a level playing field with growers around the world. Through Missouri Corn and the National Corn Growers association, growers are working to strengthen both sides of the profitability equation by building demand while addressing rising production costs.
As always, this Corn Talk podcast is made possible by the Missouri Corn Merchandising Council and the Missouri Corn Growers Association. To learn more about Missouri corn's efforts to build demand at home and abroad, visit mocorn.org I'm David Geiger. Thanks for listening.
