From todays Star Trib:Jogeephus":17i80wou said:
... the devastation has also pushed corn to its highest price ever --
Corn futures for December delivery hit $7.915 a bushel in Monday trading on the Chicago Board of Trade, nearly double the price of a year ago.
The high prices -- driven by flooding, surging exports and increased demand for corn from ethanol producers -- has farmers raking in record revenue for all kinds of crops, including soybeans and wheat. For the time being, their windfall has overshadowed the plight of hog and poultry producers, many of whom are losing money because soaring corn prices are pushing up the cost of feed.
The high price of corn has already compelled some large ethanol producers to scale back expansion plans, and livestock and hog producers likely will cull the size of their herds if feed prices remain high, agriculture analysts said.
Darren Newsom, analyst with DTN, an Omaha company that tracks commodities prices, says the current flooding is worse than the devastating 1993 floods because it's wider spread and not just confined to river areas. His computer models show corn could reach $15 or $16 a bushel.
Nationwide, about 57 percent of the corn crop was in good or excellent condition as of Sunday, down from 60 percent a week earlier, and 70 percent a year earlier, the U.S. Department of Agriculture said in a Monday report. About 12 percent of the crop was in poor or very poor condition, up from 9 percent a week earlier and 8 percent last year. "It's unusual to see a crop stressed this early in the year," said Michael Swanson, a senior agricultural economist at Wells Fargo. He noted crop conditions often worsen later in the summer due to the heat.
Many of Mn farmers are trying to jump on the high prices through so-called "forward contracts," which lock in future sales at current prices. "When I sold at $5 [in February], I never thought I'd see this again in my lifetime," said Jim Nichols, a farmer from Lake Benton and a former state agriculture commissioner. "Now, it's $7 a bushel. Corn looks very beautiful right now."
However, Nichols is worried about the ethanol producers that buy his corn and turn it into fuel. Some publicly traded ethanol companies have lost two-thirds of their stock value over the past year.
"There are winners, and there are losers, and as farmers, we've got to worry about the losers, too," Nichols said. "A lot of my customers are ethanol plants and a lot of those are farmer-owned. We don't want to see them suffer."
Indeed, corn farmers' big gains are generating pain for another group: hog farmers. Recently, some farmers have been urging each other to reduce the size of their sow herds, a move that would eventually tighten supplies and bring up pork prices.
Duane Behrens, a hog farmer in Fairmont, said he stockpiled enough of last year's corn crop to feed his hogs through July. But then, he has to buy corn from nearby elevators at market prices. If corn prices stay at $7 to $8 a bushel, Behrens estimates he'll lose up to $25 to $30 for every one of his hogs. Given that he sells 4,000 hogs a month, the losses could top $100,000 a month. "It's just about all we talk about around here," Behrens said of the high prices. "We can pay these higher corn prices. But the question becomes, how long will your lender go along with it?"
