What Do 90 Years of U.S. Corn Yields and Farm Payments Mean for Prairie Grain?

By Trent Klarenbach, BSA AgEc, PAg, founder and lead analyst, Klarenbach Research, Saskatoon, SK

Seventy years of flat yields, then a climb

For most of their history, U.S. corn yields barely moved. USDA data show the national average was about 26 bushels per acre from 1866 to 1929. The 1930s were worse. Drought pulled the decade's average down to 24.2 bushels, and 1936 came in at just 18.6.

Hybrid seed changed that. From 1937 to 1955, as farmers switched from saved open-pollinated seed to purchased hybrids, the trend in U.S. yields rose by about 0.8 bushels per acre each year. After the mid-1950s, nitrogen fertilizer, crop protection, bigger equipment and later biotech traits pushed the trend to about 1.9 bushels per acre per year.

The result: the 2025 U.S. corn crop averaged a record 186.5 bushels per acre, nearly eight times the 1930s average. USDA's current forecast for the 2026 crop is 178.5 bushels.

The treadmill

Economist Willard Cochrane called this the "technology treadmill" in his 1958 book Farm Prices: Myth and Reality. Early adopters of a new tool earn more for a while. Once most farms adopt it, total output rises, prices fall, and everyone has to adopt the next tool just to keep up. Higher yields per acre don't always mean higher income per acre.

Washington stepped in, and never really left

Federal farm support started with the Agricultural Adjustment Act of 1933, which paid farmers to take land out of production to lift Depression-era prices. Farm bills have been rewritten roughly every five years since. The 2014 Farm Bill created the two main commodity programs in use today: Price Loss Coverage (PLC), which pays when a crop's national price falls below a set reference price, and Agriculture Risk Coverage (ARC), which pays when crop revenue falls below a benchmark. Subsidized crop insurance sits alongside them.

USDA's Economic Research Service tracks every dollar of direct government payments to U.S. farmers back to 1933:

• 1933: $131 million.
• 1987, during the farm crisis: $16.7 billion, or about $42 billion in today's dollars.
• 2020, with trade aid and pandemic relief: a record $45.6 billion, or about $57 billion in today's dollars.
• 2024: $10.1 billion. 2025: $27.9 billion.
• 2026: forecast at $47.4 billion, which would be the most since 2020.

Adjusted for inflation, payments have averaged about $16 billion a year since 1933. These figures cover direct payments only. They don't include the cost of crop insurance premium subsidies.

Support hasn't stopped U.S. farms from taking on debt. ERS puts total U.S. farm debt at $578.8 billion at the end of 2025 and forecasts $605.1 billion for 2026.

What this means on the Prairies

U.S. corn sets the floor for feed grain. The U.S. grows the world's biggest corn crop, and that corn is the main competitor for Prairie feed barley. In its September 2026 outlook, Agriculture and Agri-Food Canada (AAFC) put the 2025-26 Lethbridge feed barley price at $283 a tonne, near a six-year low, and forecast $295 for 2026-27. AAFC said stronger U.S. corn prices are expected to give the Canadian feed grain market some support. The reverse is also true. A big U.S. crop at 180-plus bushels an acre caps what feedlots will pay for barley.

Corn flows north when barley is short. USDA's attaché in Ottawa reported that Prairie demand for U.S. corn imports dropped in 2025-26 because the Prairies grew about 1.6 million more tonnes of barley and Manitoba grew more corn. When Prairie barley is short, U.S. corn fills the gap, and that limits how high barley prices can go.

Wheat and canola feel it too. Cheap U.S. corn competes with feed wheat in livestock rations. U.S. programs also lower the risk of planting corn and soybeans, which keeps U.S. acres and supplies high. Large U.S. corn and soybean supplies weigh on the wider grain and oilseed complex that Prairie wheat and canola prices trade in.

Canadian farmers don't get the same cheque. Canada has no equivalent of PLC, which pays out when national prices drop. The main federal-provincial tools are AgriStability, which pays when a farm's whole margin drops sharply, plus AgriInvest savings accounts and AgriInsurance. A Prairie grower who competes with U.S. corn is selling into a market where the U.S. grower has a price-triggered backstop and the Prairie grower doesn't.

What to watch

• USDA's monthly corn yield estimates for the 2026 U.S. crop
• The final size of the 2026 U.S. government payment total
• AAFC's monthly Lethbridge feed barley and Chatham corn forecasts
• Statistics Canada's December field crop estimates for barley and corn

The Grain Report tracks Prairie feed barley and wheat with charts. You can follow the outlook at the Klarenbach Grain Report.

Klarenbach Research is independent, takes no commissions and does not tell readers what percentage of their crop to sell.

About the author: Trent operated a large farm for its time near Eatonia, Saskatchewan, and has 11 years of experience applying technical analysis to Prairie grain marketing.

Sources

1. USDA Economic Research Service, Feed Grains Database, Yearbook Table 1 (U.S. corn yield per harvested acre, 1866–2026, from USDA NASS). ers.usda.gov
2. USDA Economic Research Service, Farm Income and Wealth Statistics, data release of Sept. 3, 2026 (government payments, GDP price index, farm debt). ers.usda.gov
3. Willard W. Cochrane, Farm Prices: Myth and Reality, University of Minnesota Press, 1958.
4. Agricultural Adjustment Act of 1933, 48 Stat. 31 (U.S. Statutes at Large). govinfo.gov
5. USDA Farm Service Agency, Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC). fsa.usda.gov
6. Agriculture and Agri-Food Canada, Canada: Outlook for Principal Field Crops, Sept. 9, 2026. agriculture.canada.ca
7. USDA Foreign Agricultural Service, Canada Grain and Feed Annual 2026 (CA2026-0009). fas.usda.gov
8. Agriculture and Agri-Food Canada, AgriStability, AgriInvest and AgriInsurance program pages. agriculture.canada.ca