400 Years After the Pilgrims, Corn Is More in Demand Than Ever

Updated on November 20, 2017
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Quint entered the grain marketing business fresh out of college in 1971. Posted at varied locations, he traded in corn, wheat, and soybeans.

The Pilgrims' Success With Corn Was Prelude to Our Nation's Development

As a schoolboy in rural Illinois, I learned the story of the early Pilgrims and how a Native American man called “Squanto” helped them survive their first years in the Massachusetts Bay area. Sent by the tribal leader a few months after the arrival of the Pilgrims and their grim first winter, he befriended them. Evidently, he could speak English, having been taken captive and shipped off to Spain a few years earlier. He had also lived in England before returning to North America. Squanto was their guide, interpreter and advisor. An agreement was reached between the tribal leadership and the immigrant group, pledging mutual friendship and peace.

One particular detail of that school lesson remains with me today: Squanto showed the Plymouth Colony how to raise Indian corn, among other vegetables. He taught them to put a fish into the bottom of a shallow hole and fill it with dirt, preparatory to planting three or four kernels of corn. He showed them how to care for their corn plots, too.

A tender corn plant emerges
A tender corn plant emerges | Source

Corn Was Native to North America, but it Thrived in Many Other Places Eventually

Later, after the corn stalks grew, producing an ear or two on each, he taught them to harvest it and how to save the grain for food through the season. Squanto’s assistance saved the lives of these early settlers. Governor William Bradford was particular in his praise of Squanto and his corn growing advice in the reports he sent back to the Old World. As the seasons passed, the Pilgrim colony grew more corn to feed their expanding populace. Additional Pilgrim families arrived from the Old World and quickly adapted to life in the Plymouth Colony. As pioneers spread out across the land in later years, corn production went westward with them.

Corn was not native to Massachusetts. It is theorized that tribes in what is now Mexico began to develop it as a crop about 7,000 years ago from wild plants. Gradually the primitive corn crop was shared with other tribes throughout North and South America.

After it has matured, an ear of corn can be stored for long periods of time.
After it has matured, an ear of corn can be stored for long periods of time. | Source

Corn Was at the Center of My Universe as a Child

I was fascinated by the story of Squanto, the Pilgrims and the role that corn played. I could relate to the production of corn. My family raised hundreds of acres of it on our central Illinois farm. We stored ears of corn in cribs and fed it to livestock all during the year, refilling the cribs each harvest. Back in those days the leftover corn remaining in the cribs each summer was shelled from the cobs and hauled to market to make space for the next crop of corn in our cribs. A portable sheller system was brought out and set up in our barnyard. It separated kernels from the cobs and corn shucks. When the shelling was completed we had piles of cobs and shucks to play in.

a "cob mountain" was an irresistible playground
a "cob mountain" was an irresistible playground | Source

Mostly, We "Walked" Our Corn to Market

A dozen years ago most of the American corn crop was being fed to cattle, hogs and poultry. USDA numbers show that 58% of the crop was fed to livestock in 2004 while 17% was exported and 17% was processed into food and fuel. The big change since then stems from the aggressive expansion of ethanol-making. It has become a fundamental ingredient for gasoline blenders. They use it to boost octane ratings in automobile fuels. The increased demand spurred corn prices to lofty levels. Farmers have responded by planting more corn acres.

corn-fed market hogs
corn-fed market hogs | Source

Livestock Feeding Is no Longer in First Place for Corn Demand

Four hundred years have now gone by and Americans are still producing corn – prodigious quantities of it. According to recent USDA estimates, our farmers will harvest more than 14 billion bushels of corn this season, or more than 360 million tons. Approximately 85% of that will be consumed here in the USA. Livestock feeding will account for about 40% of the total use. Food products, sweeteners and ethanol-making will consume 45%, but the by-products from such processing are fed to livestock, too. Only about 15% of the corn crop is exported to foreign corn users.

Non-feed demand for corn has outgrown livestock feeding
Non-feed demand for corn has outgrown livestock feeding | Source

When Corn Becomes Scarce, Some Users Drop Out While Others Come to the Fore

With three pronounced categories of corn use in our modern world, we have three different degrees of need among all the users. These were on stark display when the corn crop was reduced by drought in 2012. Supplies had to be rationed. Generally, we found that corn export demand dropped immediately and very sharply as prices spiked higher. Livestock feeding was also slowing and shrinking, but at a rate that was less dramatic. Procurement managers for corn processing operations continued to buy corn despite the strong price rise.

These unequal responses to price change ration demand unevenly. Economists refer to this as the elasticity of demand. Processors are the least flexible in their corn buying. It is less expensive to operate plants at a short-term loss, buying high-priced corn, than it is to shut them down and then re-start them. Export demand has the greatest elasticity. That is, when prices go up, the number of cargoes being booked drops off sharply. Livestock feeders are somewhere in the middle. The graph compares how each category fared after the 2012 drought sharply reduced the American corn supply. When American corn farmers harvested a big crop the next year, dropping prices back down, demand rebounded in these approximate proportions.

the classroom theory of demand elasticity played out in the corn market in 2012/2013
the classroom theory of demand elasticity played out in the corn market in 2012/2013 | Source

The corn industry has had dynamic growth in the past. Looking forward, it seems very likely that this commodity is going to continue to flourish. The non-feed portion of the US corn industry has been dominant these past few years. The global market for corn may be headed in that direction, as well. It is something to ponder in a world that is becoming more inter-connected every season.

© 2017 Quinton James

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      Quinton James 3 weeks ago from American Midwest

      Good to hear from you about the corn info... I suppose the Plymouth Colony history wasn't taught in Canadian schools... I lived and worked in Winnipeg 40 years ago... That was a delightful learning experience, as well. Took my canoe to the Whiteshell Provincial Park, eh? Also, went driving across the bald prairie to Regina and Calgary, up to Edmonton, etc evaluating the wheat, barley, oats and canola crops, too... Survived the winter, as well... Glad I got to do that back then!

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      Linda Crampton 3 weeks ago from British Columbia, Canada

      This is an interesting article. I've never heard of Squanto before. Thanks for sharing the information about him. I enjoyed learning more about corn, too.