When was the last time corn was worth around $3 per bushel on the board of trade? Was it 5 years ago? Maybe more? It seems like it's been above $5 now for some time.
The answer, Mike Boehlje says, is that it touched the $3 mark within the last three years. People tend to forget that when they're doing crop budgets and selling grain for much higher prices today. However, he believes the volatility of the grain markets and agriculture in general is something that every farm manager should keep in mind going forward.
Boehlje and Brent Gloy, head of the Center for Commercial Agriculture, were presenting a class to a group of seed industry specialists during a session at the Purdue University Center for Food and Ag Business recently. Outside guests on campus for Purdue University's roundtable were allowed to view a portion of the ongoing class. The roundtable was made up of leaders from across the state who gathered at Purdue to get a better idea of what Purdue agriculture is doing today, and to offer suggestions for improvements going forward.
Boehlje, an accomplished and award-winning ag economist, was very clear that he does not believe the volatility is over. Price rises and declines in most commodities are very likely in the near future, given the world economy and uncertainty about European economies and Middle-eastern stability.
Will we ever see $3 corn again? How you answer that probably depends upon how long you've been farming and how many tough battles you've been through. Never say never, as the old saying goes.
Actually, Boehlje told the group that he looks for corn to drop to $3 at some point over the next five years. "That doesn't mean I'm predicting $3 corn anytime soon, or that it will stay there" he notes.
What it does mean is that he thinks there's enough volatility in the markets and world economy for that to happen. How long it is at that level and when are questions even an accomplished ag economist isn't ready to answer.