October 14, 2010

Rising corn prices affect feed costs in Iowa

The value of Iowa's crop has increased by billions of dollars, raising feed costs, affecting cattle producers.

Corn prices have risen to US$5.55 per bushel after reports from farmers of decreased yields due to moisture damage to corn plants. Corn traded at around US$3.60 in mid-June. The rise means Iowa's corn crop's worth has gone from US$13 billion in mid-June to more than US$18 billion this month.

The rise looks to be good for farmers who can buy more farm equipment and bid up the price of farmland. Iowa bankers say the strong grain prices also will prop up their farm loan portfolios.

The higher corn prices also are not as positive for cattle and hog producers who buy feed. Jason Golly, a buyer for Lynch's Livestock of Waucoma, said rising corn prices will end anyone's expansion plans.