12 March 27, 2014 2014 LOGAN COUNTY FARM OUTLOOK MAGAZINE LINCOLN DAILY NEWS.com
Any higher corn prices
next year and beyond
would likely come from
a combination of reduced
foreign production,
smaller U.S. crops and
an increased demand
for corn. Increased
demand, however, does
not equate with an
increase in consumption
associated with lower
prices. Increased
demand is defined as
the willingness of users
to consume more corn
at a given price, or
conversely, to pay higher
prices.
Overall, while there
may be a few difficult
years ahead, it will be a
relatively brief moment
of financial strain. A run
of low prices may very
well lead into another
period of high prices.
The downside is the low
likelihood that we will
see several years of corn
prices at $6 a bushel or
higher, as we witnessed
in past years in Illinois.
By Derek Hurley
The big squeeze
E
very year Logan County
producers roll the dice and
play the game. What will come of
their efforts, only God knows. Most
producers in this county wish they had
a little foreknowledge too.
The good news in 2013: Despite late
planting, productivity was good. Corn
in Logan County came in at better
than 190 bushels per acre.
The bad news: The rest of the country
had very good productivity too.
The result: The total crop was 30
percent larger than the crop in 2012,
a drought year, but the total value for
the crop was 9.8 percent lower. In
2012, corn was nearly $8 per bushel.
At harvest in 2013, corn was around
$4.
Who won in 2013? Estimates put
the value of the 2012 grain crop at
$185.12 billion and the 2013 crop at
$166.95 billion. Big grain consumers
like ADM and Cargill certainly got
the advantage in 2013 because they
had a crop that was 30 percent larger
in 2013 but cost much less per bushel.
Who lost in 2013? Conservative
estimates for 2013 put the results at
between $50 and $82 loss per acre
for central Illinois producers. There
is a glut of corn on the market and
fewer places to sell it. This means
higher big-corporate profits for the
middleman. And the lower price per
bushel to the big grain conglomerates
did not translate to lower food or meat
prices for the average citizen.
Better productivity in 2013 should
bring a bunch of benefits, but along
with greater productivity came greater
costs.
Matt Whitson, a producer from over
near Mount Pulaski, said that because
of the late planting, corn came out
of the fields really wet and cost a lot
more to dry. A bigger crop also costs
more in fuel to bring it in and move
it around. Inputs have not adjusted,
and cash rents are still the same.
The result for 2013 is that farmers
may cover most of the inputs and
equipment costs, but there is no profit
left for the household.
Whitson compared farming in Logan
County to gambling in Las Vegas.
Sometimes you win, sometimes you
lose. But it’s really tough to win
(productivity) and lose (price) at the
same time!
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