Corn: Background for 1990 Farm Legislation

Overview

This report address considerations in the 1990 farm bill debate for corn, including market conditions, policy proposals, trade agreements, and the interactions between policy and markets for selected commodities. Corn is the leading U.S. crop, both in volume and in value. In 1987, farmers planted about 65 million acres and harvested 7.1 billion bushels. The farm value of production totaled about $13 billion, about 36 percent of farm receipts from crops. Rising corn yields and market prices strengthened corn farmers' cash flow positions in the late 1970s; however, per bushel real returns above cash expenses declined in recent years. Lower loan rates, the issuance and exchange of generic certificates, and devaluation of the U.S. dollar relative to the mid-1980s all contributed to the growth of U.S. corn exports in recent years. Government program costs for corn averaged more than $4.6 billion a year during the 1984-88 crop years, or 30 percent of the 15.7 billion corn crop value. Higher feed grain prices stemming from the programs comprise an additional cost to the livestock sector and consumers.