AMERICAN grain growers face a tough challenge to keep producing enough corn to meet burgeoning demand.
Agfarm Victorian manager Brad Knight told the Grains Research and Development Corporation research conference in Ballarat last week that recent US Department of Agriculture projections showed corn yields needed to reach 182 bushels an acre, or 11.4 tonnes a hectare, by 2021-22 to meet demand.
The USDA's long-term projections were based on yield for this year's US corn crop hitting 166 bu/ac, or 10.41 tonnes/ha, and rising by 10 per cent across the next eight years.
"I don't know whether a 1 per cent annual increase is achievable, but that's what is needed to keep the balance sheet in check so we don't see supply (falling) under demand," Mr Knight said. "When you look back through history, it's a fair challenge."
US corn yields have only topped 160 bu/ac twice in the past 30 years - 160.4 bu/ac in 2004-05 and 164.7 bu/ac in 2009-10 - making it a difficult task to keep up with demand.
Last year, corn yields averaged 123.4 bu/ac, or 7.74 tonnes/ha as a result of one of the worst droughts in US history.
Mr Knight said the average yield over the past three seasons was about 141 bu/ac.
He said to reach 182 bu/ac by 2021-22 would mean a 30 per cent rise in yields from the past three years.
He questioned whether technological advances or varietal development were available to continue making yield gains. Droughts also put pressure on supply.
The US Drought Monitor shows large sections of the country's grain belt in serious drought. "If it persists, it will cause some trouble (with grain markets)," Mr Knight said.
The US corn crop was vital to global grain prices, Mr Knight said. "This has been particularly evident this year after drought reduced available US export supplies and drove up wheat prices by $70-$90 a tonne," he said.
"Not only is the US a large exporter (of corn), they also consume a large amount (approximately 40 per cent) of production domestically, which has increased dramatically in recent years as they strive for increased domestic fuel production in the form of ethanol.
"They have largely reached targeted ethanol production levels now, but the balance sheet has been stretched to do so."
Mr Knight said the ethanol market had made US corn much more expensive in the global feed markets.