Corn

Corn is one of the most widely grown cereal crops. Inefficient fertilizer practices and the demand for irrigated water contribute to environmental degradation.

This brief provides a summary of the main environmental and social factors that affect corn production worldwide; however, it spotlights key players in the U.S. value chain and provides examples of actions being taken by companies operating or headquartered in the U.S.

KEY TAKEAWAYS

Most of the corn grown today is used to feed the animals we eat or as a biofuel for cars.
The U.S. is the world’s largest producer, exporter and consumer of corn grain, with nearly one-third of its cropland used for corn production. Most corn used in the U.S. is grown in the U.S.
Because corn is a high yielding commodity and a widely used ingredient in food products a large number of companies are part of the corn value chain.
Inefficient fertilizer practices and the demand for irrigated water contribute to environmental impacts, such as greenhouse gas emissions and poor water quality that drive business risks in corn production.
Investors should address risk in the corn supply chain through direct engagement with their portfolio companies and by supporting relevant policies and multi-stakeholder collaborations.

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Environmental and Social Factors that Drive Risks

Climate Change
Deforestation and Land Use Change
Soil Health and Biodiversity
Land Rights
Water Use and Pollution
Working Conditions

Climate Change

low

Use of fertilizers in corn cultivation is a source of nitrous oxide emissions, a greenhouse gas that is nearly 300 times as potent as carbon dioxide. Additionally, intensive tillage without use of cover crops can lead to erosion and compromise the ability of the soil to retain carbon.
Deforestation and Land Use Change

low

Corn production has not been a major driver of deforestation.
Soil Health and Biodiversity

medium

Conversion of natural habitat leads to loss of biodiversity
Largely due to demand for biofuel feedstocks in the U.S., millions of acres of important grasslands in the Great Plains have been converted to cropland in the last several years leading to reductions in biodiversity (e.g., bird populations) and the loss of soil carbon. Soil erosion is a problem because it leads to loss of valuable topsoil. A great deal of progress has been made in the U.S. and other regions to reduce erosion rates from growing corn by using methods such as conservation tillage, but more work needs to be done.
Land Rights

low

Corn production has not been a major driver of land rights issues.
Water Use and Pollution

high

High water demand contributes to drought vulnerability and groundwater depletion
Corn is a thirsty crop, and in the United States, corn requires more water for irrigation than any other crop. Twenty-one percent of U.S. and 26 percent of global production respectively is irrigated. In addition, some 35 percent of corn is grown in regions, including the U.S. and China, where there is high or extremely high-water stress.
Working Conditions

low

Corn production has not been a major driver of working condition concerns.

Commodity Background

On average in the U.S., about 45 percent of corn is used for animal feed, 44 percent is turned into ethanol, and 10 percent is used as food. Within corn used for food, about one third is converted into high-fructose corn syrup.

Top Production Regions

The U.S. and China are by far the largest corn producers, accounting for more than half of global corn production.

Production Statistics, Trends, and Drivers of Demand

928 million metric tons:
Average global corn production, 2011 - 2013

$233.1 billion:
Global production value

13 percent:
Proportion of global production exported

Supply Chain

The corn value chain is extremely broad, encompassing many players and sectors. However, a small group of big companies control large volumes of production at key points in the US supply chain.

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Company Examples

The Coca-Cola Company

The Coca-Cola Company committed to sustainably sourcing by 2020 all its key agricultural ingredients, including the corn that goes into its high-fructose syrup. By 2020, it aims to engage farmers that collectively represent up to 1 million acres, or roughly 50 percent of the company’s global corn supply, in implementing this commitment.

Smithfield

Smithfield -- as a pork producer -- purchases large quantities of animal feed containing corn, and has set a goal to have 75 percent of its Southeast grain-sourcing acres participate in a fertilizer optimization and soil health program by 2018.

General Mills

General Mills’ stated goal is to sustainably source 100 percent of its 10 priority ingredients by 2020, including dry milled corn. In 2014, the company launched a Field to Market pilot program targeting 20 eastern Wisconsin corn growers with the aim to reduce greenhouse gas emissions and nutrient utilization, while increasing biodiversity.

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