Corn good, but concerns drive price down

With the corn harvest about 30 percent complete this week, the quality of the crop looks good.
It's the price causing concerns for producers as the grain markets respond to tribulations caused by the national banking crisis.
Farmer's Cooperative Elevator in Girard, for example, was only accepting corn for storage. Ned Johnson, grain merchandiser for the cooperative, said a limit-down reduction in the price suspended bidding locally after the regular markets closed.
He didn't have a price for corn posted, Johnson said. But, if he were to set a price, it would have been at $4.78 a bushel as of mid-afternoon Monday. The daily trading limits on corn is set at 30 cents and on soybeans at 70 cents. Trading closed once those limits were reached.
Yields have been a mixed bag across the area, Johnson said, ranging from about 90 bushels to the acre to more than 140 bushels. He estimated the area average at about 110 bushels per acre, with good test weights of 57 pounds to the bushel or more.
But it's become a waiting game now, as recent weather conditions have slowed dry-down almost to a crawl.
“Many of the producers out there ran out of dry corn they could harvest,” he said. “Now, it's waiting until the remainder of the corn gets dry enough to get them going again.
“It's a very slow dry-down process on the corn. We've had ample sunshine the last couple of week, but very little in the way of drying winds.”
A small percentage of the corn is coming in with some sprout damage. Heavy rains earlier in the month found its way inside the husks and pooled at the bottom of the ears. But, to this point at least, it hasn't caused any serious problems.
The real concern is the reaction of the grain markets to ongoing concerns over the lending crisis. Fortunately, though, the direct impacts in southeast Kansas have so far been limited options for selling freshly-harvested grain. But what’s it doing to area farmers?
“For farmers, as far as not being able to sell any grain right now, it’s probably not a big issue with most of them,” Dean Stites, county agriculture agent with the Crawford County Extension Service office in Girard, said. “The deeper concern for the farmers would be what affect is this going to have on the grain markets?
“Chances are, the grain market is going to go down. It’s a worrisome thing. I think we should all be concerned, regardless of what business we’re in.”
But whether or not producers are going to be happy with the crop they bring in out of the fields depends some on where they are in the county, Stites said. He’d heard of yield reports from the upper-50 bushel range to more than 150 bushels to the acre. It all depends on where timely rain fell, on the variety of seed used and the planting date, to name just a few of the variable, he said.
“It’s just a hodge-podge across the county,” he said. “The corn north of (Girard) may not be quite as good as the corn south of here. That’s just the feeling I’ve got, based on what I’ve heard.
“I was talking to a farmer up by Hepler the other day. He never really did come right out and say it, but he said it was pretty pathetic. He was pretty down, and he’s usually a pretty chipper guy.”
The potential for decreased yields could cause further difficulties for producers, particularly if the markets continue to trend downwards, he said. Just a few weeks ago, he projected 100 bushels per acre corn was the break-even point for profitability. If the market price keeps decreasing, he said, that probably won’t cut it.
“Farmers have well over $300 per acre into their corn inputs,” Stites said. “With a good yield, farmers could still make some money. Just not as much as they’d hoped.”
Given a projected yield of 150 bushels, he figured the payoff would be about $490 per acre, before the cost of inputs were figured in, based on $3 or $3.50 per bushel corn. Decrease the yield to 90 bushels, and the income drops to $315 per acre, less than the cost of the inputs.
Crop insurance would pay out in cases of decreased yield, when it drops below 75 percent of historic production numbers for a given farm. But that isn’t the goal of most producers.
“Farmers don’t want to collect crop insurance because, basically, that means they had a crop failure,” Stites said. “Their indicator of success isn’t really how much money they made. It’s how well their crops did.
“If the crops did well, they can say, ‘Well, I did my job. It was the market that let us down and we didn’t get to capitalize on it.”
The other primary crop for this area in the fall, soybeans, may end up being the life saver for many producers. But soybeans are still at risk from early frost, which has wiped out crops in the past, he said.
“I think the beans I’ve looked at are pretty darn good,” Stites said. “But there’s still a lot of them are going to need another three weeks of good sunshine.
“I’d say, if we don’t get an early freeze this year, we could have some pretty good beans. Real good beans, in fact. It could be the crop of the year this year.