Published: Tuesday, August 7, 2007
Corn prices, field corn harvest ballooning
Ethanol is responsible for
taking away the country's corn surplus.
By LAUREN POLINSKY
The price of corn is almost twice as high as it was two years ago.
The United States government is predicting the largest harvest of field corn this season since before World War II.
The reason for both: ethanol.
More than 92 million acres have been planted this year, an increase of 14 million acres from last year. An increased demand for corn has driven up the price per bushel, which has caused farmers to plant more corn and less of other crops.
However, as one Columbiana County farmer pointed out, growing more corn may not necessarily mean more money in a farmer's pocket.
"Corn is a commodity that moves around. I have to spend the time to search out the best market for it. Corn prices are still at a decent level right now but they have come down in recent weeks," John Gross said. He farms around 300 cornfields that range in size from 10 acres to 140 acres. He ships his corn to chicken farms on the east coast because, he said, that is where the best money is right now.
In the past
"Two years ago the best money for corn was right in this area, but now so much is being grown that it is not needed," Gross said.
Two years ago the price for corn was around $1.80 a bushel; today it is going for around $3 a bushel.
Ralph Wince, grain merchandiser for Agland Co-op in Canfield, said the reason for the increase "is directly related to ethanol consumption."
"In 2001-2002 season, ethanol was using about 1.1 billion bushels of corn. The prediction for the 2007-2008 season is that it will use 3 1/2 billion bushels of corn," Wince said.
Wince pointed out that this trend will continue because the United States will need to reduce its dependency on oil, but he cautions that there are "only so many acres of ground that can be planted."
"What we are going to end up with is soybeans, wheat, cotton and corn competing for acres. Soybeans and wheat are the ones losing the most amount of acres.
Right now soybean prices are increasing. They have gone up $2.50 since last year to try and push the farmers back into soybean growing," Wince said.
Columbiana County, where Gross' farm is located, increased its corn production in the past year from 19,833 acres to 23,331 acres, according to the Ohio State University Columbiana County Extension office. Mahoning County's cornfield acreage grew from 14,248 acres to 16,014. Trumbull County is not sure what its acreage is for this year yet, but extension educator Steve Hudkins said the county averages 22,000 acres a year and he expects to see more this year. But, he said, typically all the fields cannot be harvested.
Last year's harvest was the third largest harvest on record, according to Dwayne Siekman, executive director of Ohio Corn Growers Association, and this year is expected to surpass that.
Nine percent of the nation's corn goes to human consumption while a little over half goes to animal consumption. Siekman said ethanol is affecting corn in terms of taking away the country's surplus.
"For the past eight years, we have had a large surplus of corn. Ethanol is just taking away that surplus. But corn can only go so far. As the ethanol industry expands, we are going to need to see different stock for producing it," he said.
Currently there are 110 ethanol plants in operation throughout the country and 75 more set to be completed in the next two years, according to Siekman.
High growing cost
Not all farmers, though, are adding more cornfields. Gross decided it was not beneficial to him to grow more corn because the price of soybeans and wheat was increasing. In terms of long-term crop rotation, he said he did not see an advantage. He also pointed out that even though the price for corn is high, the cost to grow corn is high.
The cost of operational fuel and fertilizer has increased recently. Specifically, the price of nitrogen, a key ingredient in corn fertilizer, has doubled in the past three years, according to Wince. Another money-eating problem specific to eastern Ohio farmers is acidic soil, and adding lime to the soil is the only way to fix the problem.
"Corn is an expensive crop to grow. Yes, the farmer is making a little more money but not nearly the amount that the price of corn would lead you to believe," Wince said.