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Corn+Soybean Digest

USDA: Average Corn Price Lower In 2008 Than 2007


In its newest corn supply and demand estimates, the USDA reported the estimated average farm price for corn in 2008 at $4/bu. – lower than the price for corn in 2007. Leaders at the National Corn Growers Association (NCGA) pointed out that this proves that higher ethanol demand can be accommodated with little impact on corn and food prices.

“Growers in 2008 overcame numerous obstacles to bring in a good crop and meet all needs for corn,” says NCGA President Bob Dickey, a grower from Laurel, NE. “One of our significant challenges has been dealing with higher costs for land, fuel and fertilizer and trying to break even. The high prices for corn futures was unrelated to ethanol demand and did not always mean more money in the pockets of growers.”

The USDA estimates corn production at just over 12 billion bushels and yield at 153.8 bu./acre, with total corn supply at nearly 13.7 billion bushels. These numbers are the same at November’s estimate, but some changes were made to the USDA’s estimates for corn demand.

Use of corn for ethanol and coproducts such as distillers’ grains, for example, was reduced from 4 billion to 3.7 billion bushels (27% of supply) and exports were dropped from 1.9 billion to 1.8 billion bushels. Carryout is estimated at 1.474 billion bushels, representing 11% of supply.

These new numbers came as some NCGA corn board members recounted how the 2008 growing season was an unusual one for them personally.

Clark Gerstacker, of Midland, MI, says his farm operation was coming off a very challenging 2007 season and they were hoping for a less strenuous year. However, Gerstacker says that Michigan saw very difficult harvest conditions due to rain and early snow cover. Even with these challenges, however, his farm saw a yield improvement of 20 bu./acre over 2007.

With wetter-than-normal conditions for spring, Dave Nelson, a corn board member in Belmond, IA, was still able to finish planting by Memorial Day. Unfortunately, his fields were impacted by the Iowa floods, recording one of the wettest June’s on record, forcing him replant 10-12% of his crop. His farm also saw windstorms and hail. While replanting put him roughly three weeks behind schedule, a hard freeze was not recorded until late October, helping the crop mature. Yields were down from 2007, but still higher than expected. “It is remarkable how well it ended up yielding, especially when you factor in the obstacles,” Nelson says.

Cal Dalton, of Pardeeville, WI, reports that his state enjoyed the fourth-largest corn crop ever, harvesting 411 million bushels despite the weather, thanks to new technologies in biotech and equipment. Dalton says that planting started slow because of cold weather and record snowfall last year, and that corn came off field wetter than normal. His harvest came to a halt Dec. 1. Dalton says, because of snowfall, leaving 45 acres unharvested.

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