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What’s up with the price of corn?

November 21, 2011
By Travis Hunt - OVO Pro Staff , Ohio Valley Outdoors

The late American comedian George Burns said "Everything that goes up must come down." I would contend that Mr. Burns never filled a deer feeder with little golden pellets of shelled corn. I recall a mere three years ago, a bulk 50 pound bag of shelled corn, from my local feed store, was about four dollars a bag. However, when I recently purchased my latest load of shelled corn I paid almost $9.50 for a single 50 pound bag. I knew that corn prices were on a steady increase but I never realized how much until two bags cost almost $20.

I am not an expert on corn by any means. However, I both grow corn for family consumption and feed shelled bulk corn to deer. This spring my family and I planted about 25 rows of early sunburst corn and late candy corn. After disking, fertilizing and planting, we were successful and harvested a respectable bounty of corn. As a hunter, I have used a feeder with shelled corn to both bait deer and help them through the harsh Ohio winters. Of course, I have benefited from the presence of these deer and taken home quite a few with corn in their belly. As a fisherman utilizes a worm on a hook, I utilize shelled corn and a feeder.

My deer feast on corn, minerals and other goodies exclusively from Jefferson Landmark, Inc., located on State Route 152 in Bloomingdale, OH (www.jeffersonlandmark.com). I know that high corn prices are not a case of retail price gouging. So, my frustration propelled me down the pathway of understanding why corn prices are what they are. So, setting emotions aside, I began the relentless pursuit of the truth.

Article Photos

The author (left) with Jeff Wood, Soil and Crop Advisor at Landmark.

Like most Americans who drive a vehicle and follow politics, we are more than conscious that the smarter people in government have backed the proposition of turning a nation's corn supply into ethanol bio-fuels. I have always questioned the futility of turning food into vehicle fuel. but who am I. However, as a scientist, I can state with certainty that ethanol is a less fuel efficient fuel, burns dirtier, and is more destructive to an internal combustion engine than traditional gasolines.

After purchasing the corn, I had the opportunity to sit down with Jeff Wood who is the Soil and Crop Advisor at Landmark. Wood has a soil science bachelor degree from Ohio State University and is a wealth of information on feed, seed, cattle and just about every agricultural practice that you can think of. As we began discussing corn prices, he told me that the price of corn is a heated topic among employees and customers alike. I asked him if I was correct in that corn prices have risen substantially since I began feeding and baiting deer with shelled corn in 2006. He told me "absolutely".

Wood explained that the surface justification for increased corn prices is ethanol; however, there are many other variables. He detailed these variables as follows:

Ethanol - From 2010 to current, approximately 30% of our corn crop is utilized for ethanol as compared with only 10% in 2006. Naturally, this demand for corn is met by large volume corn farmers. These farmers are paid an approximate 10 cent per bushel (BU) premium by the ethanol producers. These producers utilize 100,000 BU per day.

Pesticides - The combination of pest mutation and EPA regulations has caused pesticides to become less effective. In turn, a farmer utilizing conventional pesticide mixes is now forced to use more of the pesticide or buy a stronger chemical both of which cost more.

Fertilizer - Fertilizers have become more expensive due to market supply and demand variables. Additionally, corn is a crop that benefits from the application of fertilizer and farmers want the best crop possible. So, fertilizer is used and used frequently.

Petroleum - The price of oil currently hovers around $85 dollars per barrel. In turn, the price of fuel has increased substantially. Case in point, on January 28, 2008 (the day President Obama entered office), the average price of gasoline in the United States was $1.78 per gallon meaning that since January 2008 to October 2011, retail fuel has increased in price about $2 per gallon. Increased fuel prices increase the cost of the corn crop. How, you ask. Keep in mind an acre of corn must be plowed, disked, plated, sprayed and ultimately harvested. This means a tractor must travel over every acre of corn five or six times.

Seed - The supply of corn seed was low during the 2011 spring planting due to diplodia, gibberella and fusarium ear rot fungi.

Weather - The southern United States has and still is experiencing a severe drought. Even the drought tolerant corn hybrid plants are struggling to survive. On the other hand, southern Indiana, Iowa, and Illinois have had significant rainfall. This rainfall resulted in late spring planting and increased weeds that choked out much of the corn there. Additionally, international weather conditions such as an Australian drought and Russian flooding have resulted in lower international corn harvest levels.

On a positive note, Wood stated that Ohio and Pennsylvania have had good corn harvest yields and minimal ear rot.

As we concluded our discussion, Jeff told me that "last summer we had baseline corn commodity prices in some cases down around $3.50 a bushel. Now we're up in the $7 range; so, we've seen nearly a doubling of prices over the past 15 months." He gave me a gloomy forecast and explained that according to the USDA, corn and grain prices will stay elevated for at least the next year, and that corn stockpiles are at an almost 15 year low point.

If you have any comments, a solution to high corn prices, or a hunting question, feel free to contact me at the Ohio Valley Outdoors Magazine. If you have any crop, soil or agriculture questions, feel free to direct those to Jeff at Jefferson Landmark, Inc.

Greetings from the woods of Ohio..

References

1. Hill, J., Polaksy, S., etal, Proceedings of the National Academy of Sciences of the United States of America, February 2009.

2. Mallory, M., Hayers, D., Crop-Based Biofuel Production with Acreage Competition and Uncertainity, Land Economics, November 2011.

3. Tilman, D., Fargione, J., Land Clearing and Biofuel Carbon Debt, Science, February 2008.

4. United States Department of Agriculture, Weekly Feedstuffs Report - Summary

 
 

 

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