Grain prices, yea me again....

I understand parts of Illinois south of me (I an in the N.W. part of the state) are in the same place as you Clovis. I was checking rain fall maps and between Champaign and Springfield some areas have only had one inch of rain since the middle of May, you can't grow corn in those conditions! Heck you can't grow much of anything large scale in those conditions.

Annie

Mostly they use soybeans for the bio-diesel.

However, some ethanol plants have gotten so efficient, they use the starch of the kernal for ethanol; use the small but available oil from the kernal for bio-diesel; and of course still have 17 lbs of high-protien feed left over.

A win win win.

10% ethanol is mostly for eco-friendly uses - makes the fuel burn a bit cleaner, exhaust is better for us all to breathe. It does add an actual 3% net gain to our gasoline supplies as has been proven several times, as hard as that is for you to believe. If we cut ethanol at this point in time we will lose both some fuel and some high-protien feed. This will result in greater demand for crude, and greater demand for soybean meal. Causing crude and soybeans to go up in price. (And causing worse air quality...)

Not really a winning situation to try to drop ethanol fuels.

Some moderation in all things - and that includes ethanol - will take place and the markets - if left to work as they should - will sort this out, and we will all have good food supplies and all will be well. Now, if we start knee-jerk messing with the markets, and over react with some large scale interfearing - THEN we'll have a real, long lasting mess on our hands. That sort of thing is exactly what got us into the massive farm bill subsidies after Nixon and then Carter messed with grain supplies. It devistated the ag industry when you mess with a natural market.

My intent here is just to let folks who don't pay attention so much to weather across the midwest, that if you need to buy grains and/or hay, you might want to look around and realize your feed company is going to have some drastic price swings to deal with that will be passed on to you.

We won't run out of food or feed, but we will have to roll with the punches.

Last week feed might have been a little cheaper than this week. Things might change again in the next 2 weeks, and could be drastic changes. Some feed companies are very good at buying smart, and ahead of time, and will keep moderate prices - but if your feed company guessed wrong, or doesn't plan well, they might end up being the place that runs out of raw corn, and has to pay crazy prices to get any feed ground at all....

I'm betting by October this sorts itself out, and grain prices will be higher than we expected, but not too crazy.

If you need feed, buy ahead, budget accordingly, or be prepared to shuffle to other types of feed a bit to weather through a price bubble.

Don't need to care about ethanol, or CRP, or how the budget for the Farm Bill is being cut $25 billion, or any of that stuff.

Just a heads up on grain prices hitting a wild time as there is a lot of unknown really just how the whole nation's corn crop is doing, other than it _appears_ to be going downhill in many areas.

In August, we will be concerned with soybean crop, by the way. So if you use high-protien feeds, you might want to be concerned with August weather, and if there is some sudden change in the ethanol use, there will be a shortage of DDGS which will raise soybean meal a lot.

Corn is made in July; soybeans are made in August.

None of this is set in stone, I don't know what grain prices will really do, so make your own conclusions.

--->Paul

Unfortunately, ethanol use, is mandated by the Government.

It's only going to make things worse.

Easy for you to say - MN has good crops, this year.

The entire Midwest, from Ohio through Kansas, crops are in shambles. There is no such thing as hay.

This is not going to be a problem?

Ethanol plants in my area are cutting production. Acouple have temp shut down. I am selling some cows next week, some yearling calves also due to pasture conditions. Buying hay is a non starter at $200/ton. I have started cutting some trees for the sheep to deleaf. Droughts suck!

Most folks would die, if they had to raise it their selves, sans oil (machinery)...

__________________
Luck is what happens when preparation meets opportunity. Seneca
Learning is not compulsory... neither is survival. W. Edwards Deming

I disagree. People will be worse off.

You have planted corn for yourself, but if you were in a severe drought, and did not have the means (or the water) to irrigate, your corn would be dying, just like all of your neighbor's.

At least now people have the means to get corn/beans/hay and their corresponding products, from areas that are producing well, even if it means higher prices.

FWIW, just as a note of interest:

My BIL is a crop consultant, and has a masters in agronomy, with 30+ years of experience.

He said that in our area, in 2 fields that he tested, the average yield will be less than a bushel an acre for corn.

I then asked him about cutting the corn for silage, since it would not produce corn. He says that since the ear hasn't developed on the stalk, it has no nutritional value. He added, that in some cases, which I didn't really understand, that this corn, if cut for silage, could possibly be toxic for cattle feed, and all would have to be tested for toxicity should it be cut for feed. In our area, there isn't much corn cut for silage, anyway.

He also said that the beans "might be okay, but it all depends".

Nonetheless, I sure feel bad for the small farmer, especially if his crops are uninsured. It will be a tough year for all farmers in our area; the big farms will take big hits, but I am afraid the hardest hit will be the small family farms.

This will not be a national crisis, but it certainly is a problem for local areas, and can be a big problem.

Corn & beans are up the limit today, 40 cents a bushel. We will see crazy price swings. At some point prices will drop the limit.....

Ethanol plants typically slow down or shut down this time of year for maintinence. They will likely be shut down a few extra days.

The barren corn makes good silage, it has a feed value like grass hay - not top notch high protien but still a good value. One has to be very careful, and test for nitrate poisoning. Corn takes up the nitrogen like always, but if there is no ear to use the N, it gets stored in the lower part of the stalk. This is common in drought conditions. If the N is too high, it is dangerous to livestock. One can still use the silage, but need to blend with old cornstalks, or hay, or good silage to keep the nitrate level in the normal, safe range.

Corn is up 32 cents, beans 43 cents, wheat 22 cents right now.

Hang on to your hats.

--->Paul

Saving your own OP corn is a great idea (I don't know if great is the word... imho, it's the only wise 'sustainable' thing to do, although hybrids will produce more/faster... just stagger the plantings to avoid cross pollination)... but, the kicker is, in a survival situation, keeping enough seeds from one year to the next 'is not enough'. Drought/hailstorm/insects etc. can destroy a crop overnight... and then 'whatcha gonna do?". I keep two years worth of seed on hand, just in case, replacing the seed each year.

As long as commercial corn growers are around, I'm not going to slave away at raising my own....... too many other things to do. IF 'it' all evaporated away (big ag) I figure everything else would evaporate, and I'd have plenty of time to irrigate my corn fields...

All it's going to take is one precision cluster-bump and let folks either go hungry or spend all their income on a bowl of gruel once a day, for our farming/ranching business model to change forever.

__________________
Luck is what happens when preparation meets opportunity. Seneca
Learning is not compulsory... neither is survival. W. Edwards Deming

Paul,

Very interesting.

My BIL mentioned something else: He says that because the corn plant hasn't used up all the nitrogen, it may be best for the farmer to plow the stalks under, saving the nitrogen in the soil for the next crop. He says this will save on fertilizer in next years crop.

I have another question.

I'd like to know what the farmers are going to do with these fields of corn that are destroyed.

Very little silage is cut in our county. I know one farm that cuts silage, and even though there must be more, they are the only farm that I have seen silage being cut.

So how will the farmers get the stalks cut down and plowed under?

Combine? Bush hog?

They will go out with a big heavy disc.

Its not the end of the world that is for sure.

This year had the largest corn crop planted since 1937, something like 96 million acres of corn, so already there is more corn planted so as a society we can afford to lose some. The USDA has predicted that by averaging out the bad areas, and the good areas (some places in the country have really had poor conditions, where some have had extremely good conditions) the bushel per acre average will be down by 10 bushels. That is a significant drop to say the least.

So corn pries by the end of this month will rise...considerably, however with that rise, people will do what they do when everything gets expensive...they will quit buying it. I would say by the end of august, the apple cart will be tipped and the corn prices will suddenly go the other way, because now the demand is gone, and the price has to follow.

But as the price drops, demand will pick back up and so will the price. I am not sure where the price will level off come October when the harvest tallies arrive, but I think it will be lower than it currently is. I say that based on corn prices having an inflated price these last few years. That was why so many acres of corn were planted this year...farmers wanting in on those high corn prices. The corn price bubble had to burst like it did in the 1920's and I think this crazy weather year will be the catalyst that makes that happen.

This is just a guess however, based on experience and chatting with my family of farmers and other farmers. I love to throw predictions out and see if they materialize, BUT PLEASE do not make any financial decisions based on what I say here. I am proven wrong as often as I am proven right.

USDA report out. Indiana, kentucky, missouri and tennesse 60% poor to very poor. Illinois and Iowa not good either. Sounds like Minnesota may have a record high crop in corn. 60% poor in 4 states is big. I am going to buy my protein lick tubs that I will need this winter tomorrow.

Minnesota had a lot of May flooding taking out the low areas.

Now about 1/2 of the corn area of MN is quite dry, the rest is pretty good. I'm in the 'now quite dry' area. An inch of rain this week and I'd think I would get a nice average yield of corn. Wait until next week for the rain, and things are going downhill....

The USDA originally predicted we would get 166bu average corn yield this year.

They now think as of July 1st, we would get 146 bu average yield.

Many people in the corn belt think that number is be 130-135 by now, as no rain has come the past week to help the corn belt....

The USDA also expects we will use 4% less corn for ethanol than originally thought, and less corn will be exported. As mentioned, as prices rise, less gets bought. Things are working as they should..... These numbers will all change as we go. That is normal, just this year things are a tad more extreme than normal.

Corn traded today at prices between $7.85 a bushel, to 7.33, back up to $7.53 by the close.

Now if you were buying or selling a big amount of corn, how do you keep up when the price goes up or down over 50 cents a bu in one day? Just getting to a phone and making a call and the price can be up or down a quarter....

Crazy times. The govt said we are going to grow less corn, and by the end of the day corn prices actually went down on CBOT!

--->Paul

About 1/3 of our corn crop is tassling right now. The corn is only 3' tall, I don't think there is much yield potential even if we had adequate rain for the rest of the summer.

I have heard rumors of corn being bush hogged in Southern Illinois and crop adjusters zeroing out corn fields already.

I am afraid this thing is oging to get real ugly before we get finished.

Jim

Bale it up for hay and plow under the stubble would be the only sustainable thing to do with droughted out corn IMHO.

I don't know how any of us are going to sustain raising cattle on corn based feed as long as ethanol is in the picture anyway. Unless a person is raising there own it's not going to happen.

__________________
Francismilker

"The effectual fervent prayer of a righteous man availeth much" James 5:16

Getting very ugly-looking in Southern Wisconsin. I'm seeing some areas fired completely to where they look like small grain fields in the middle of corn. There is no green left. We've now gone more than 2 months with just over an inch of rain. Chopper fields which had 10' stalks last year are tasseling at 4'. With all of the big dairy farms around, lots of deals going on trading manure on grain stubble now for what corn can be chopped later.

This isn't affecting just grain and corn. Snap beans are running 2 tons per acre instead of 6 last year. A farmer was going to save a 5-gallon pail of peas for me but he said that I wouldn't have wanted them even after sorting out the brown ones. He's also got 2 big fields of sweet corn which may end up chopped. That's all on prairie silt which is noted for retaining moisture. There's still moisture at 3" but darned little of it.

Martin

They are already talking about temporarily stopping the ethanol requirement in fuel...if it gets much worse, they will do just that. That will drive down the demand quickly...

For us its not that we are a grass based beef operation, its that we milk cows and Holsteins are grain-dependent. We have combated the high price of grain these last few years by really improving our silage. Two years ago the cow nutritionist said it would be impossible to make better silage...corn and haylage. Last year he shook his head and said we made a lair out of him. We made some really high quality stuff last year. All that translates into high protein milk, and we get big bonuses for that. So getting the protein in the milk up, and having to buy a lot less grain and soy meal, is how we combat the issue.

On a different front we invested quite heavily into high production equipment too, and now with lower fuel prices, we are really reaping the benefits of that. We are doing okay actually...just a different approach to keep us going.