Genetically modified corn plantings have enhanced yields, thereby bolstering production.
New York, NY (PRWEB) March 30, 2015
The Corn Farming industry fluctuated significantly during the five years to 2015. Beginning in the early part of the period, the Federal Renewable Fuel Regulations of 2010 prompted farmers to dedicate larger shares of their farmland to cultivating high-value corn used in ethanol production. More specifically, the regulations required gasoline across Canada to contain 5.0% renewable content. “Similarly, rapidly expanding biofuel production in the United States created a key export market for Canadian corn, further supporting demand,” according to IBISWorld Industry Analyst Antal Neville. In addition, genetically modified corn plantings have enhanced yields, thereby bolstering production. Consequently, revenue grew through 2012, but oversupplies of the crop pushed prices down beginning in 2013, causing revenue to fall. In 2015, this price correction is expected to continue, causing a 9.5% drop in revenue. In the past five years, industry revenue is expected to grow an annualized 2.0% to $1.9 billion.
A rise in global demand significantly facilitated industry expansion. European markets developed a strong appetite for Canadian corn, pushing up revenue in 2011 and 2012. Exports to the United States have also been strong. Due to the North American Free Trade Agreement and their shared border, the United States is Canada's largest trading partner for corn. “Therefore, the US appetite for Canadian corn, which is used primarily for biofuel production and livestock feed, largely dictates industry success,” says Neville. Oversupply in North America has somewhat stunted demand from the United States, causing the value of industry exports to fall 19.3% in 2014.
Over the five years to 2020, the industry is expected to continue levelling out. The price of corn is expected to continue falling in 2016. After that, the high corn inventories of the past few years will fall, pushing up demand for the grain once again and leading its price to rise. In turn, industry revenue is expected to resume growth in 2017. Overall, IBISWorld forecasts that the industry will grow in the five years to 2020. Nevertheless, increasing import competition is expected to hinder growth.
For more information, visit IBISWorld’s Corn Farming in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry primarily grows corn (except sweet corn) and produces corn seeds. Corn commonly refers to the grains or kernels of Zea mays, a tall annual cereal grass. Corn is a staple cereal in many parts of the world. Corn is used to make biofuel, sweeteners, oil and other products.
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