November 10, 2010

 

US corn prices may further rise

US corn prices that have soared 70% since June may take another jump with the release of the USDA's November Crop Production Report on November 10.

 

When the October government crop report downsized the expected US corn harvest, corn prices soared. "The market's going to ration demand," said Craig Shepherd, market advisor for Water Street Solutions.

 

What makes a smaller harvest more critical is the fact that the amount of corn left over from last year's harvest – about one million bushels - is down from 2009's carryover total, he said.

 

"Corn is definitely more profitable for farmers. At prices ranging from US$5.50 to US$6 a bushel, farmers can lock in good prices. A lot those new corn acres will come at the expense of soybeans," said Patrick Kirchhofer, manager of the Peoria County Farm Bureau, who expects more corn acres to be planted across Illinois in 2011.

 

According to Darrel Good, University of Illinois agricultural economist, some analysts project corn prices could rise as high as US$7 a bushel, said.

 

Prices are one factor that could drive more corn production in the state but another is the warm fall weather being experienced across the area, said Tim Lenz, president of the Bloomington-based Illinois Corn Growers Association, adding that area corn farmers are in "a sweet spot" right now.

 

"Price has a lot to do with it, but soybeans are getting a good price, too. This year, farmers have their fields prepared for next year's crop. Corn on corn suffered a little this year as a result of farmers not being able to do fieldwork last fall," he said.

 

A dry fall in 2010 - in contrast to the cold, wet weather experienced the previous fall - means farmers have the opportunity to do tillage work and install drainage tile systems, said Lenz.

 

Dan Maher, a Brimfield farmer, said he invested in a machine to install drainage tiles 10 years ago. "I keep doing so much each year," he said.

 

Following wet springs in both 2009 and 2010, "we couldn't do enough tiling," said Maher, referring to the heavy rainfall that flooded many fields across the state.

 

But Maher is not the only one with plans to install tile in his cornfields this year. "We're still waiting for drainage tiles this fall. There's been such a huge demand that they (manufacturers) are backed up," he said.