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Corn prices climb because of drought PDF Print E-mail
Written by Chris Lee   
Extremely dry conditions have caused a jump in corn prices over the last month or so. With much of the country experiencing drier than normal conditions, farmers are bracing for a down year with respect to corn harvest.

Grainland Cooperative grain merchandiser Steve Young said corn shot up $1.75 a bushel in the month of July.

Corn isn’t the only thing that has been affected by the drought-like conditions. When one commodity rises, it is sort of like a domino effect. Everything is tied together in some form or another.

Higher corn prices mean the price of feed for cattle will be higher. In addition, there is less grass for cattle to graze on due to the dry conditions. As a result, more cattle are going to packing plants and slaughter because there is no feed or pasture to graze them on.

Young said he has read that the price of beef could go down in the short term due to more supply; however, in the long term, the price could go up because the herd will be smaller.

Dryland corn has taken a beating this summer with very little rain and extremely high temperatures. Young said some of the crop won’t produce anything while some of it received rain at just the right time which will cause it to be half of a normal crop.

“There’s going to be some dryland corn, but in general, it’s going to be way down from where it’s been the past couple of years,” Young said.

Drought conditions have left dryland corn in the area in poor shape. Many of the fields won’t produce much of a crop—or a crop at all.  —Enterprise photo

The Holyoke area has seen some rain but only a couple truly measurable amounts. Just over a half inch of rain fell June 15. Seven days later .31 inches fell. There were four other days in June when rain tried to soak the parched earth, but it wasn’t much.

July proved to be a wetter month. As Holyoke was prepared for the annual 4th of July fireworks show, .71 inches fell, bringing much relief to crops and dampening the hopes of those wishing to see the flashes and bangs high above City Park.

Rain fell over a three-day period from July 6-8 and amounted to 1.29 inches. Four days later in the month, the area saw rain, but it wasn’t much.

These readings were all taken by official weather observer Dan Kafka at his home southwest of Holyoke, and numbers most certainly vary across the county.

On July 12 a weird storm rolled through Phillips County and pounded some areas with strong rain and hail while other areas didn’t receive a drop of rain. As much as three inches fell in some areas of the county.

There hasn’t been any sign of farmers opting to make silage out of failing corn. Young said this could be because the nitrate levels are higher in the distressed corn, which could be detrimental if fed to cattle.

Irrigated corn has the advantage, of course. Center pivots have been running nearly nonstop this summer, keeping the irrigated corn wet. The extremely hot weather could cause issues with pollination, but Young hasn’t heard of anyone with the problem as of yet.

Yields might possibly be down this year compared to the last few years, but Young said the last few years have been very good for farmers.

That being said, don’t be alarmed when corn harvest begins two or three weeks earlier than in past years.

Wheat prices have also been affected by the price of corn. Young said there has to be a certain spread maintained between wheat and corn prices. If corn goes way higher than wheat, then there will be more wheat being fed to livestock.

Young said there is a lot of wheat but not enough to be used as feed.

He also noted Russia is struggling with their crop as are other parts of the Black Sea region. There are still adequate supplies of wheat worldwide but it’s not as big of a supply as it was four-five months ago.

Soybeans have also skyrocketed $3-4 over the last five or six weeks. The supply of soybeans in the United States and worldwide has been tight. Looking at a poor crop, the supply will be really tight, which has caused the price to be so high.

No matter the turnout of this year’s corn crop, it’s not going to deter farmers from turning around next year and planting again. As is always said “it won’t grow if it’s not planted.”

Holyoke Enterprise Aug. 9, 2012