CHESTERFIELD, MO. (RFD NEWS) — U.S. corn farmers are producing more corn per acre than their Brazilian counterparts, but higher input costs may be eroding some of that productivity advantage in the global marketplace.
The National Corn Growers Association (NCGA) has been studying the prices U.S. farmers pay for inputs compared with Brazilian growers and how those differences affect U.S. corn competitiveness.
NCGA Chief Economist Krista Swanson joined us on Friday’s Market Day Report to discuss the group’s latest research on how higher input costs affect domestic corn competitiveness with Brazil.
Why Compare U.S. and Brazilian Input Costs?
In her interview with RFD News, Swanson said the research began with questions from NCGA members about why input costs remain high and how U.S. prices compare with what farmers in other countries pay.
“We’re hearing from a lot of our members that input costs are high and they’re asking a lot of questions about why they cost so much,” Swanson said.
NCGA formed an inputs task force last fall to examine issues related to input costs. The research comparing U.S. and Brazilian costs was one of the projects that came from that effort.
Swanson said the issue is especially important because U.S. farmers produce roughly twice as much corn per acre as Brazilian growers while using fewer inputs.
That productivity and efficiency advantage, however, has not necessarily translated into a lasting competitive advantage.
Higher Input Prices Can Erode Productivity Gains
NCGA’s research found U.S. growers are often paying substantially more per unit for seed and crop protection products.
Swanson said those higher costs can reduce the value of the productivity gains farmers create on their operations.
“Part of the value that farmers create through productivity is disappearing before it reaches the farm’s bottom line because of these higher input costs,” she said.
The issue becomes particularly important because U.S. farmers and Brazilian farmers are competing in the same global corn market.
Swanson said U.S. farmers do not set the price for their corn, while input costs are paid before the crop is harvested.
Large Price Gaps Across Inputs
NCGA’s research found significant price differences between the United States and Brazil for several agricultural inputs.
For 2023 through 2025, U.S. corn seed prices averaged 68% higher than prices in Brazil, according to the study.
Corn insecticide prices averaged 87% higher during the same period.
Swanson said similar gaps were found across fungicides and herbicides.
“The big takeaway here is in about any one product or any one statistic, it’s the broader story that these patterns are big, the gaps are large and consistent, no matter how you slice it or dice it,” she said.
NCGA Calls for Greater Price Transparency
Swanson said the study was not intended to answer every question about why the price differences exist, but rather to identify the gaps and determine what questions need further research.
NCGA is calling for greater transparency in how agricultural products are priced.
Swanson said several factors can influence prices, including market structure and regulatory considerations, but she said the size and consistency of the price differences warrant further examination.
“We want to open the door to conversations and learn more about how prices are set across the board,” she said.
Research to Drive Further Discussion
NCGA plans to continue working with people across the industry to better understand how input prices are established and what factors contribute to differences between markets.
Swanson said additional research will examine issues such as market structure, product offerings, retail structures and the regulatory environment.
“We don’t know necessarily the extent to which those pieces are playing and there’s differences in market structure and product offerings and retail structures and of course regulatory environment,” she said.
She said continuing the research and working with companies in the industry will be important to finding answers for farmers dealing with input costs.
Competing for China Grain Purchases
Brian Irey with Crossroads Coop says China has invested heavily in Brazilian ethanol.
“China has invested a tremendous amount in Brazilian ethanol. Just from the perspective that if they make ethanol in China, they have to ship three vessels of corn to produce the equivalent of one vessel of ethanol. It’s much simpler for them to build the ethanol infrastructure in Brazil and only pay freight on one boat of ethanol freight to get it to China. And that’s their plan.”China has also been building crush capacity in Brazil for several years.
Irey says those moves could ultimately benefit American growers.
“I think that with Brazil out of the picture and Ukraine’s ability to export corn here for the foreseeable future somewhat limited, it’s going to be really, really, really good for the U.S. producer as time goes on here,” Irey says.
It could take several years for all of that infrastructure to get up and running. He also says $ 6-a-bushel corn could be a reality for U.S. producers in the near future.
