More signs of trouble for corn

The pressure to get the crop in has led some farmers to plant in less than ideal conditions, rather than waiting a few days for the soil to fully dry out. Some farmers have resorted to planting around, say, a one-acre wet patch.

“You have to start to wonder about the conditions that farmers are getting their crop into the ground in,” says Christian Mayer, a market adviser with Northstar Commodity in Minneapolis.

Dave Miller, director of research and commodity services with the Iowa Farm Bureau who farms 400 acres in the southern part of the state, is a prime example.

“I was planting in a field last night where probably 80 to 90 percent of the field was fit to plant,” Mr. Miller said last Friday. Some of the field was marginally OK, and “about 5 percent shouldn’t have had a tractor running through it,” he said. Miller planted anyway.

The poor weather has been one factor in the record-high futures prices for corn, more than $6 a bushel. Demand for ethanol, high wheat prices, and the low dollar have contributed as well. “It’s been the perfect storm,” Mr. Mayer says.

According to the latest USDA report on World Agricultural Supply and Demand Estimates, released last Friday, prices should remain high. The report predicts season averages at $5 to $6 a bushel – above the $4.10 to $4.40 predicted for the 2007 crop. It also projects that ethanol use will go up 33 percent.

Still, there’s little cause for worry at this point, says Jerry Norton, a grains analyst with the World Agricultural Outlook Board at the USDA and one of the authors of the report. High prices at the supermarket have much more to do with energy costs than the price of commodities, he notes, adding that it’s too early to assume this year’s corn crop will be poor.

“It’s still very favorable for corn,” Mr. Norton says. “People seem to be getting a little more alarmed than they should be.”

One unanswered question is how much corn farmers will be planting this year. According to USDA estimates, based on farmers’ intentions back in March, they’ll be planting 86 million acres of corn, 8 percent less than last year’s record planting. But in March, soybean prices were strong enough to make farmers want to switch more fields back to soy, and since then, corn prices have become even more favorable, some experts note. Thus many farmers may plant more corn than anticipated. On the other hand, if the wet conditions continue into June, it may seem safer to plant a field with more-forgiving soybeans.

“By May 24 or 25, you might have some people starting to switch,” says Miller of the Iowa Farm Bureau. He notes that he has about half of his 400 acres planted and is getting a little nervous about the fields he has left – in lower areas that take much longer to dry out.

“I’d like to be done,” he says. “And I suspect I’m similar to a lot of guys out here.... The degree of nervousness goes up exponentially over the next 10 days.”

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