Just how much is corn going to cost this year, anyway?
After last year’s ride through widely fluctuating corn prices, increased foreign demand for U.S. corn, rising ethanol production and dwindling corn reserves, it should be no surprise that interest in the 2012 crop harvest is high.
Gerald Weigel, one of the presenters for WATT’s May 8 webinar on “What to expect from feed grains to be harvested in 2012” had some interesting observations about what is ahead.
“You have to begin by looking at the key factors. One factor is how much corn is in bins and where it’s located—either on a farm or in commercial storage. Then, as we move into May there should be a good sense of where our planting intentions will be,” he said during the webinar. “We already have about 17 percent in the ground now, and unless weather patterns change immensely, it looks like we’re going to have an early crop.”
However, Weigel was quick to add the question “Will the corn that was planted early maintain the figure and come out of the ground without any real pressure on it? Just because corn is in the ground doesn’t really mean anything.”
According to Weigel, once you assemble the facts you can create a forecast based on tentative yields, using the USDA as a model and with a bit of work with a crystal ball.
As to corn that is in the ground, Weigel noted that there are some things to consider from a plant bio-technology point of view. “After all, the corn that is being planted now is not the same corn that was being planted ten years ago,” he said.
Taken together, what does this mean for the cost of corn this year? Weigel threw out numbers as low as $3.50 and as high as $8 a bushel. He noted that a discrepancy of even 5 percent in the USDA’s numbers could have a real impact in the final price that feed producers end up paying for corn.
His final price estimate was a bit of a surprise, at least to me. I had a different number in my head.
To hear what Weigel and his co-presenter, Craig Wyatt of AB Vista Feed Additives, offer up as their price estimate for corn this next year, register for the webinar.
I'll be curious to see if his number matches yours.