March 2009 Articles

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The Voice of Louisiana Agriculture

The Voice of Louisiana Agriculture Source: www.lfbf.org
It’s still a little early, but so far this crop year is looking like the complete opposite of 2012 and with a big drop in prices recently, might start resembling a more “normal” crop year.
Leaving aside the question of what normal is, timely rains and cool temperatures across most of the corn belt at the critical growing stage for corn is part of what has sent prices tumbling, especially when you combine it with one of the largest acreages on record. For most parts of the country, corn is in the critical blooming stage and the weather forecast for the immediate future calls for similar weather. This means perfect conditions for growing large, full ears of corn.
A little closer to home, we’re in a more normal pattern here, with wet weather across the southern part of the state and drier as you move further north and west. Earlier on in the season, some folks had some beans that went unplanted, but for the most part, the crop got put in early and has done well for most parts. The big issue right now with harvest underway is moisture. While normal years see it in the 15-17 percent range, this year its averaging above 20 percent.
The big crop, though means regardless of where you are, the markets are down. Prices have tumbled almost $2 for corn and $3 for beans since the beginning of the year. While the large crop this year is certainly weighing down the markets, the other part of that is our export picture. Corn export inspections are nearly half of what they were this time last year.
In addition, we have more competition than the normal South American crop. The price out of the Ukraine into Chinese ports is as much as a dollar cheaper than U.S. corn right now. Of course, it doesn’t have the same quality, but it has let China cancel several contracts with us.
For us here in Louisiana, the spot price for September corn right now is still 30 cents over, but for future deliveries is almost that much under. In the same fashion, prices for December contracts on the Chicago Board of Trade are running 40 to 50 cents cheaper than what Louisiana is delivering now. That’s a plus for us at the moment, especially those that booked ahead, but it does point to grains being much cheaper for the foreseeable future, at least until next year’s crop.
As most farmers will tell, though, they’d rather have a good looking crop and low prices than a bad- looking one with high prices. I guess it’s just normal for farmers to want to make the most of what they have.