Thursday, May 19, 2011

Corn Yields Have Increased Six Times Since 1940

The chart above displays annual U.S. corn yields (bushels per acre) back to 1866 (USDA data here).  After remaining flat between 1866 and 1939 at about 26 bushels per acre, corn yields started increasing dramatically in the 1940s due to the introduction of hybrid seeds, and the widespread use of nitrogen fertilizers and herbicides (source).  By 2009, average corn yields had increased by more than six times to a record high 165 bushels per acre, before falling last year to 153 bushels per acre.  

According to the Corn Farmers Coalition:

"Farmers today grow five times as much corn as they did in the 1930s – on 20 percent less land. That is 13 million acres or 20,000 square miles, twice the size of Massachusetts. The yield per acre has skyrocketed from 24 bushels in 1931 to 154 now, or a six-fold gain. And the Agriculture Department expects the average yield per acre to double in the next 25 years."

MP: I'm not sure how this fits in with the "Great Stagnation" story, but it appears that the amazing productivity gains for corn production over the last 70 years will continue into the future.

HT: Lee Coppock

Update: The chart below shows that real, inflation-adjusted corn prices have trended downward over time as corn yields have increased, from $16 per bushel in 1948 (2010 dollars) to about $4 per bushel in 2010. 




71 Comments:

At 5/19/2011 9:27 AM, Blogger Eric H said...

Corn isn't stagnant. It's price is up over 100% from a year ago. And the Corps of Engineers just flooded some of the cropland...get ready for more shrinking cereal boxes. The good news is that since you will be eating less for the same FRNs, you may lose weight and can wear smaller clothes, which will help offset the 100% increase in cotton prices.

 
At 5/19/2011 9:31 AM, Blogger Che is dead said...

"... it appears that the amazing productivity gains for corn production over the last 70 years will continue into the future."

Perhaps, but most of those gains, if they materialize, will be the result of bioengineering and the left is working tirelessly to disrupt or destroy that field of endeavor.

 
At 5/19/2011 9:33 AM, Blogger Rufus II said...

I'm looking for an all-time record in production, and yields this year - between 165 and 170 bu/acre.

Pay not much attention to the floods this year; they were in the middle to lower midwest. The Serious production is in Nebraska, and the "I" States - Iowa, Illinois, and Indiana. Iowa is, always, the "Lynchpin."

That $7.50 Corn will, most likely, be $4.50 Corn by Sept.

 
At 5/19/2011 9:42 AM, Blogger morganovich said...

corn has tripled in price since 2002.

it would seem that these "productivity gains" are not bringing lower prices.

certainly, ethanol has a great deal to do with that.

corn prices were (apart from one spike in 1996) pretty stable from 1980-2000.

but they have really exploded over the last decade despite continued yield gains.

clearly, something changed.

it's tempting to lay all the blame on ethanol (and it certainly bears some blame) but if the behavior of other commodities has been similar.

http://americancenturyblog.com/2011/05/corn-price-increases-tell-a-story-about-why-commodity-prices-are-rising/

corn and oil look remarkably similar over the last 6-7 years.

so do many others.

dollar debasement and the rise of asia are playing a role here too.

 
At 5/19/2011 9:44 AM, Blogger morganovich said...

"That $7.50 Corn will, most likely, be $4.50 Corn by Sept."

on what basis do you make that claim?

the growing season is off to a crummy start and the ethanol program continues to grow.

 
At 5/19/2011 9:49 AM, Blogger Rufus II said...

Also, to be considered, the lower prices in the past weren't really what they seemed. The government was guaranteeing a minimum price to the farmers. They were "kicking-back" approx $1.00/bu to the producer, which means that, although market price might be $2.00, the Real Price was closer to $3.00.

Today, about the only "subsidy" in a bushel of corn is a small amount of help with the farmers' crop insurance.

 
At 5/19/2011 9:49 AM, Blogger Rufus II said...

Also, to be considered, the lower prices in the past weren't really what they seemed. The government was guaranteeing a minimum price to the farmers. They were "kicking-back" approx $1.00/bu to the producer, which means that, although market price might be $2.00, the Real Price was closer to $3.00.

Today, about the only "subsidy" in a bushel of corn is a small amount of help with the farmers' crop insurance.

 
At 5/19/2011 9:50 AM, Blogger Rufus II said...

Sorry about that. :)

 
At 5/19/2011 9:55 AM, Blogger Rufus II said...

The amount of corn used for ethanol has, basically, topped out, and the growing season in the Real corn producing states is just fine.

Always keep an eye on Iowa. It IS the key. Also, crops are Never lost to too much water in the Spring. Crops are lost to drought in July, and August. We're on the back end of a La Nina. Drought, and extremely high temperatures in the Upper Midwest are a low probability this year.

 
At 5/19/2011 9:56 AM, Blogger Larry G said...

RUFUS nailed it... S U B S I D I E S

include ethanol in that also.

on a constant dollar basis - accounting for inflation - has Corn gotten cheaper since the 1930's?

If we export corn and the govt subsidizes it does that mean we are "protecting" on industry?

 
At 5/19/2011 10:02 AM, Blogger Rufus II said...

It's the "weather factor," Larry. All major countries have subsidies/guarantees in place for agriculture, because of the extreme economic damage that can be wreaked upon small to medium producers by "weather events."

 
At 5/19/2011 10:04 AM, Blogger LakeDweller said...

Input costs are substantially higher than they were prior to 1960. And many of these costs are not controlled by farmers. Hybrid (GMO) seeds now need to be purchased every year, instead of holding back some of the crop from last year to plant with. Fertilizer prices fluctuate wildly. And no longer can nearby farmers share resources, like manure or machines.
I realize this wasn't the point of the conversation, but the plight of small farmers should not be overlooked when speaking about improvements in corn yields.

 
At 5/19/2011 10:06 AM, Blogger Larry G said...

"weather" is an acceptable reason to intervene in the free market with subsidies?

just asking....

are there other acceptable reasons to intervene and subsidize besides weather?

 
At 5/19/2011 10:06 AM, Blogger Mark J. Perry said...

Real corn prices have fallen by 75% since 1948, see updated post and chart.

 
At 5/19/2011 10:07 AM, Blogger Rufus II said...

If I were crazy enough to contemplate some sort of "commodity" play this year I would probably look at Propane. This "Could" be a mild, wet Summer in which the corn doesn't have a chance to Dry sufficienty in the fields, thus requiring a lot of Drying in the bin.

But, I'm Way too "Retired" for that kind of excitement, so I won't. :)

 
At 5/19/2011 10:11 AM, Blogger Rufus II said...

are there other acceptable reasons to intervene and subsidize besides weather?

Well, They Do Vote. :)

 
At 5/19/2011 10:12 AM, Blogger Larry G said...

interesting updated chart.

not sure what happened PRIOR to 1950....

was there a time before subsidies where prices stay constant?

can we see where the regular subsidies started .... and where the Ethanol subsidies started?

Does the chart results imply that subsidies are an economic benefit....

.... stepping back here....
heh heh

 
At 5/19/2011 10:20 AM, Blogger Rufus II said...

Keep in mind that we "Export" a ton of corn (a little over 2 Billion Bushels/Yr) - And, more all the time. The Chinese used to be Corn Exporters (they are the World's #2 Corn producer,) but, with their new-found prosperity, they're now Importing quite a lot of Corn, and DDGS (feed supplemnt co-product from ethanol production.)

Korea is starting to Import a lot. Field Corn (that's what we're talking about - not sweet corn) is, Primarily, Livestock Feed. As the emerging economies eat more, and more meat, they import more, and more corn.

But, Remember, we still pay farmers Not to Plant 30 Million Acres.

Also, the number two producer, "China," still plants, and harvests a vast amount of their corn By Hand. There's a Lot of room on the Upside, as far as future production is concerned.

 
At 5/19/2011 10:20 AM, Blogger morganovich said...

"The chart below shows that real, inflation-adjusted corn prices have trended downward over time as corn yields have increased, from $16 per bushel in 1948 (2010 dollars) to about $4 per bushel in 2010."

it also shows that the "inflation adjusted" price of oil has not dropped since the mid 80's despite a 50-60% gain in yields and a 30-40% gain in "real" prices over the last 5-6 years.

the last 30 years have been very different than the picture you paint mark.

 
At 5/19/2011 10:28 AM, Blogger morganovich said...

the march 2012 contract is trading in the $6.80's rufus.

the futures pits seem to disagree with your assessment.

also, by weather, i was not talking about floods.

i'm talking about temperature.

it's been very cold. (roughly 1.5 deg f colder than last year)

the PDO is negative and this solar cycle looks to be crapping out.

this cold weather has already done serious damage to tomato and citrus crops etc.

if it keeps up, the corn harvest will be affected as well, especially as a low solar cycle brings less solar wind and hence more upper atmospheric ionization from cosmic rays. that yields high clouds and less sunlight.

making these sorts of weather predictions is always iffy, but this is not setting up well.

 
At 5/19/2011 10:32 AM, Blogger morganovich said...

"Does the chart results imply that subsidies are an economic benefit...."

no.

sure, they can make corn cheaper and benefit famrers, but it is always a negative sum game.

the money for the subsidy has to come from someone, so at best, it is zero sum. there is always some inefficiency collecting and distributing money, thus in reality, it's always negative sum.

add in to this the fact that such a subsidy tends to take from more productive uses and give to less, and you get a large negative effect.

like tariffs, there is no such thing as a subsidy with a net economic benefit.

 
At 5/19/2011 10:33 AM, Blogger Rufus II said...

Which brings us to another factoid. Much less petroleum is used in corn production, today, than in the past (about half as much.)

The reason for this is: The strong move toward "low till/no till" cultivation, and larger, more efficient equipment.

We used to use, probably, ten gallons of gasoline to raise 50 bu/acre. Now, it's about 4 gal of diesel for 160 bu/acre.

That would be from 0.2 gal of gasoline/bu to 0.02 gal of diesel. Volumetrically, you're looking at, basically, a factor of 10.

 
At 5/19/2011 10:42 AM, Blogger Rufus II said...

It's setting up fine, Morgan. You're getting a little "too deep" into the weeds. There are two "Main" things to consider:

1) Most important, will there be enough moisture (rain in July?) The answer should be, Yes.

2) Will you have "Extremely High" temps in the upper midwest? The answer should be "No."

The "Analysts" that come on CNBC have a Horrid record of predicting yields, and corn prices. They might be right this time, but I sure as shootin' wouldn't put any money on it.

 
At 5/19/2011 10:53 AM, Blogger Larry G said...

@Rugus, et al -

STILL - Is the US subsidizing the production of corn and corn exports?

Is that an acceptable free market policy?

I know we cast this as appropriate to help farmers...

so I'm asking.. if we subsidize to help farmers why can't we also subsidize to help auto workers?

 
At 5/19/2011 10:55 AM, Blogger morganovich said...

rufus-

i don't watch cnbc (because i agree that apart from looking good in low cut blouses, their analysts are worthless)

that said, the length of the growing season matters and so do temps. so far, cold.

you make your july rain prediction like you are pulling it out of a hat. on what basis do you make that claim?

la nina continues to disrupt the jet stream making precipitation patterns different. the central plains get less rain during la ninas. (neg PDO)

i'll make you a bet right now that the corn price will not go to 4.50 by sept as you claim.

you in?

 
At 5/19/2011 10:57 AM, Blogger morganovich said...

"so I'm asking.. if we subsidize to help farmers why can't we also subsidize to help auto workers?"

this is flawed logic.

doing one stupid thing does not justify doing another.

"i lost $10,000 at blackjack, so why shouldn't i lose $20,000 at craps"?

the answer is to stop doing the first dumb thing, not compound the error by emulating it in another area.

 
At 5/19/2011 10:58 AM, Blogger Rufus II said...

I'll just have to leave that up to the "theorists," Larry. That's pretty much a "Religious" question.

I've been called many things, but "Overly-Religious" ain't one of'em. :)

 
At 5/19/2011 11:08 AM, Blogger Rufus II said...

Morgan, if I really wanted to "bet" I'd just short Sept corn. I'm way too old for that (I don't even buy "green" bananas.:) )

However, the La Nina is over. We're at "neutral," now. We're in about the same position we were in in 2008, without the floods in Iowa. (by the way, when people were talking about buying ethanol, and corn futures at the high in May of 2008, I'm the only one I'm aware of that kept saying, "Don't Do It."

Never lose sight of the most basic fact of farming: You don't lose crops to rain in the Spring; You lose crops to "No Rain" in the Summer.

 
At 5/19/2011 11:20 AM, Blogger Rufus II said...

One BIIiiiiig Caveat. China could make a fool out of me, and a hero out of you. They are the number two producer, and it was word of a catastrophic crop in China that started the corn market on its skyward path last year.

If they "repeat," it's Katy-Bar-the-Door. We don't normally have back to back years like last year. I don't know if China does, or not. China is a Big Player, now, and it would behoove any buddy commodity player to study weather patterns in China.

 
At 5/19/2011 11:33 AM, Blogger MaggotAtBroad&Wall said...

Poor Malthus.

 
At 5/19/2011 11:34 AM, Blogger morganovich said...

rufus-

enso is still reading -.25 and it takes months for jet stream patterns to normalize.

it is precisely a "no rain" summer i am concerned about (along with a short growing season).

i note that you have provided no backing (again) for you claim that there should be enough rain.

on what are you basing that?

and i was not offering a monetary bet, just a gentleman's wager.

i think you are being far to aggressive in predicting a price decline.

sounds like you feel that way too given that you don't seem to want to back it up.

 
At 5/19/2011 11:36 AM, Blogger Rufus II said...

An interesting development is that farmers will, within a few years, have a second profit stream from corn acreage. They will be selling some of the "stover" ( leaves, stalks, cobs) from their fields for the production of cellulosic ethanol. This will tend to bring more Marginal fields into production, thus depressing the price of corn, further.

Also, as China "Mechanizes," their corn production will go up (as I stated, earlier, a lot of their corn is, literally, planted, and harvested, by Hand.

Also, the higher prices, and better seeds are bringing some African land into play.

Malthus will probably have to look "elsewhere" for his doom. He probably won't find it in the Corn Patch.

 
At 5/19/2011 11:37 AM, Blogger Benjamin said...

The incredible productivity on the private sector--when controlled by the USDA?

This is an odd one.

 
At 5/19/2011 11:48 AM, Blogger M Miller said...

GMO new report says avg yield per acre growth rate has declined from 3.5% per year to 1.2% last year. Growth rate decline is nice, but not enough to meet demand increase. Prices much higher according to GMO, unless weather gets better (worst weather in 100 years). I suggest reading th Q1 2011 GMO letter from Grantham.

 
At 5/19/2011 11:49 AM, Blogger Rufus II said...

Here is the ENSO Website Scroll down a tad for the current conditions. You'll see it's about gone.

I'm basing my prediction on historical weather patterns in years of an ending La Nina (most recent ex. being 2008.) The risk in those years is "flooding in the upper midwest in the Spring."

This year we dodged the flooding in the corn belt. (pay no attention to pictures of flooding in Mississippi, and Louisiana; we don't raise enough corn down here to make the slightest difference.)

The odds, the way I see them, favor a mild/hot summer with sufficient rain to make a nice crop. Again, I can't stress this enough, concentrate on Iowa. Nebraska irrigates a lot, and Illinois is "unkillable." Indiana will make a nice crop in all but the very, very worst years, and Ohio/NY just aren't that important. When someone starts talking about North Dakota, change the channel.

Bets with strangers over the internet seem kinda weird. It just doesn't seem like something I would do.

 
At 5/19/2011 12:06 PM, Blogger morganovich said...

r-

as i said, enso is about -.25. weather patterns in the lower 48 lag enso by months.

april was still quite cold relative to last tear.

the huge snowpack may be playing a role there.

but so is the potential failure of this solar cycle.

http://wattsupwiththat.com/2011/05/08/solar-max-so-soon/

this would be bad news for crop yields all over the world for several years at least.

still unconfirmed, but worth watching.

a short cycle being a weak cycle is very rare and last seen during the little ice age.

that sort of cold would be devastating to global agriculture.

i'm not prophesying a return to the LIA, but a quiescent sun is bad news for crops.

the farmers almanac has long used sunspot counts to forecast summers.

this one is not looking great from that angle.

sunspots tend to max at solar max.

 
At 5/19/2011 12:08 PM, Blogger morganovich said...

"Bets with strangers over the internet seem kinda weird. It just doesn't seem like something I would do."

well, i'll remind you of your claim when september rolls around.

it will amount to the same thing.

 
At 5/19/2011 12:12 PM, Blogger Rufus II said...

Again, a "cooler, wetter" summer is Good for Propane sales, not particularly bad for corn yields. We had, basically, the epitome of that in 2009. It looks at first glance like 'All Time Record Yields,' and then gets graded down, significantly, for moisture content. ends up being "slightly" above average.

 
At 5/19/2011 12:13 PM, Blogger Rufus II said...

Oh, Yeah. Of That, I am certain. :)

 
At 5/19/2011 12:40 PM, Blogger rjs said...

http://www.nass.usda.gov/Publications/Todays_Reports/reports/prog2111.pdf

 
At 5/19/2011 12:42 PM, Blogger Rufus II said...

rjs, I get a 403 Error, Access Denied with your link. What does it say?

 
At 5/19/2011 12:43 PM, Blogger juandos said...

Jason Hill of the University of Minnesota is an assistant professor in Bioproducts and Biosystems engineering wrote the following back Jan. of '10: U.S. corn yields to double in the next 20 years?

Things are looking up?

It seems so...

 
At 5/19/2011 1:44 PM, Blogger morganovich said...

http://www.observer.com/hedge-funds-running-farms-05172011

hedge funds buying farms betting on weak $, high inflation, increased demand.

 
At 5/19/2011 1:48 PM, Blogger Junkyard_hawg1985 said...

Awesome Post Mark! Plots like these are why I keep coming back to Carpe Diem.

 
At 5/19/2011 1:58 PM, Blogger juandos said...

"hedge funds buying farms betting on weak $, high inflation, increased demand"...

So it seems morganovich...

From Bloomberg: Corn, Soybeans, Wheat Futures Soar as U.S. Planting Delays Threaten Yields

May 18, 2011 2:54 PM CT

 
At 5/19/2011 2:34 PM, Blogger morganovich said...

from juandos's article:

"In the U.S., corn planting was 63 percent complete as of May 15, down from the 75 percent average in the past five years,"

you still felling good about this planting rufus?

seems to me that things may not be "setting up fine" quite as well as you were opining.

being 16% behind where we usually are at this time of year does not sound like a great start to me.

 
At 5/19/2011 2:50 PM, Blogger Rufus II said...

It's early, Morgan. Once the ground dries out a bit they can plant a whole, helluva lot of corn in just a few days.

Repeat after me, No one ever lost a crop due to a wet Spring.

 
At 5/19/2011 4:12 PM, Blogger morganovich said...

"Repeat after me, No one ever lost a crop due to a wet Spring."

the spiking futures prices would seem to imply that many disagree with you.

besides, this isn't "lost" this is "didn't plant".

they MAY be able to make it up later, but it certainly makes things more difficult.

 
At 5/19/2011 4:19 PM, Blogger Rufus II said...

We'll see. I'm predicting the largest corn crop on record.

 
At 5/19/2011 4:27 PM, Blogger rjs said...

the link i posted is USDA's crop progress for this week; compared to same date last year & the last 5... titled "Released May 16, 2011, by the National Agricultural Statistics Service (NASS), Agricultural Statistics Board, United States Department of Agriculture"
http://www.nass.usda.gov/Publications/Todays_Reports/reports/prog2111.pdf
i got it by searching google news; maybe that's the way you have to access it...

 
At 5/19/2011 4:40 PM, Blogger rjs said...

here's the same report as previously posted, not pdf:

http://www.usda.gov/nass/PUBS/TODAYRPT/prog2111.txt

im following it because 6 states (OH, IN, IL, KY, WV, & PA) had their wettest april in the 117 year instrument record; additionally, michigan had its second wettest april ever, and NY & TN had their 3rd wettest; three other states (AK, MO, & VT) had rainfall totals among their 5 wettest aprils in history; moreover, 9 states had the wettest february to april ever..

 
At 5/19/2011 5:38 PM, Blogger Rufus II said...

Your link still doesn't work, rsj.

Just copy, and paste the relevent parts.

 
At 5/19/2011 5:44 PM, Blogger morganovich said...

rufus-

that second link works for me.

take a look at the "corn emerged" chart.

the average is 39% on may 15.

this year is 21%.

last year was 53% on this date.

i'm no farmer, but that doesn't look terribly promising to me.

sugarbeets don't look so hot to me either.

 
At 5/19/2011 5:59 PM, Blogger Rufus II said...

Don't know nothi' bout no sugar beets, Morgan; but I grew up "raising corn," and I've just never heard of a bad harvest in Indiana, or even Ohio, caused by a delayed planting due to a wet Spring.

I'm predicting a record harvest. If I'm wrong on the $4.50/bu by Sept it will, most likely, be due to a poor harvest in China.

China is a dozen times more important to price than NY, Michigan, ND, and Mississippi, combined.

 
At 5/19/2011 6:04 PM, Blogger Rufus II said...

I haven't studied weather patterns in China, but they seem to be in a prolonged drought over there. If I was "betting" on corn That would interest me a whole lot more than a wet Spring in Indiana.

 
At 5/19/2011 6:09 PM, Blogger rjs said...

its 10 pages of tables: i try to paste it & i get this...
Must be at most 4,096 characters

try this: crop progress and condition - USDA

 
At 5/19/2011 6:19 PM, Blogger Rufus II said...

Thanks, rjs. That was a good link. Looks like them Buckeyes got some work to do. :)

 
At 5/19/2011 6:30 PM, Blogger rjs said...

articles early this month on advisability of planting soybeans instead of late corn:

http://graincrops.blogspot.com/2011/05/profitability-analysis-of-late-planted.html

http://www.state-journal.com/news/article/5030930

yesterday: http://www.dairyherd.com/dairy-news/latest/Weather-could-switch-corn-acres-to-soybeans-122123334.html

this advice will apply to ohio, MI, IN, MN, ND,& PA as well...

 
At 5/19/2011 6:49 PM, Blogger Rufus II said...

Those corn farmers up there bought their seed back in the fall, rjs. Looking at $7.50 corn, they're not about to change their rotation from corn to beans.

They "may," if they're able, switch their corn seed for a faster growing variety. However, inasmuch as there's a trade-off in yield, they would only do that if it got really late. Probably a few weeks from now (bs alert: I'm not up to date on this so there's a lot of guessing going on.)

 
At 5/19/2011 7:03 PM, Blogger rjs said...

rufus, the old timers would tell me you lose a bushel a day after the 1st of may...

it was totally unscientific; they liked to rhyme all their advice...

 
At 5/19/2011 7:15 PM, Blogger rjs said...

40% of our corn goes to ethanol with over $1 total subsidy & import protection:

http://earlywarn.blogspot.com/2011/02/us-ethanol-production.html

& we're shutting them down in europe:

Platts: Europe's biggest ethanol plant to shut up to 4 months end-May - Europe's largest biofuels refinery, Ensus' 400,000 cubic meter/year plant at Wilton in northeast England, will be shut at the end of May for up to four months on poor margins, plant commercial director Grant Pearson said Monday. The refinery has been hit by lower-than-expected demand in Europe, an oversupply of ethanol blends from the US and a slow roll-out of sustainability requirements in EU member-states, Pearson said.

http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8896154

 
At 5/19/2011 7:38 PM, Blogger Rufus II said...

A lot of those old sayings were pretty accurae, rjs (that's why they became "old sayings.") :)

Of course, they didn't have the seeds we have now.

Where are you from?

 
At 5/19/2011 7:47 PM, Blogger Rufus II said...

After you allow for the co-product, DDGS, it's more like 22% r.

I was reading an interesting article on this, r; here's an excerpt:

The numbers seem to support Alverson’s statement. Since 1980, U.S. corn production has nearly doubled from 6.6 billion to 12.5 billion bushels. Distillers grains and other ethanol co-products will replace over 1.2 billion bushels of corn in livestock rations this year. The U.S. the ethanol industry supports nearly 400,000 jobs across all sectors of the economy. In 2010, this increase in economic activity and new jobs has supported $53.6 billion of the nation’s GDP and put an additional $36 billion in the hands of American consumers. If you consider the amount of imported oil that ethanol displaced and thereby reduced the U.S. trade deficit last year, you can add another $34 billion to ethanol’s value to the economy. Annual operations in the ethanol industry and spending on new construction generated approximately $8.6 billion in tax revenue for the federal government and an additional $4.8 billion in state and local taxes.

FAO - Biofuels boost Food Security

Yeah, the Euros kind of botched up the ethanol thing. It's probably not a real good fit for Europe, at the present.

 
At 5/19/2011 7:59 PM, Blogger Rufus II said...

After you allow for the co-product, DDGS, it's more like 22% r.

I was reading an interesting article on this, r; here's an excerpt:

The numbers seem to support Alverson’s statement. Since 1980, U.S. corn production has nearly doubled from 6.6 billion to 12.5 billion bushels. Distillers grains and other ethanol co-products will replace over 1.2 billion bushels of corn in livestock rations this year. The U.S. the ethanol industry supports nearly 400,000 jobs across all sectors of the economy. In 2010, this increase in economic activity and new jobs has supported $53.6 billion of the nation’s GDP and put an additional $36 billion in the hands of American consumers. If you consider the amount of imported oil that ethanol displaced and thereby reduced the U.S. trade deficit last year, you can add another $34 billion to ethanol’s value to the economy. Annual operations in the ethanol industry and spending on new construction generated approximately $8.6 billion in tax revenue for the federal government and an additional $4.8 billion in state and local taxes.

FAO - Biofuels boost Food Security

 
At 5/20/2011 7:04 AM, Blogger rjs said...

im in NE Ohio, & we've had 4 more inches of rain over the past week, and it's been worse east of here...

none of the fields in my county have yet been plowed, nor have i seen a tractor out all spring; not even the Amish, who plow with horses, can get on the land...

 
At 5/20/2011 11:36 AM, Blogger morganovich said...

"I've just never heard of a bad harvest in Indiana, or even Ohio, caused by a delayed planting due to a wet Spring."

well, it's also been about the wettest spring in living memory in many parts of the country so that may factor in.

(i have had snow at my house every day this week, which is getting a little silly)

i don't have anything like an investment grade call here, but the planting figures do seem a bit ominous.

we'll see in september i suppose...

 
At 5/20/2011 11:39 AM, Blogger Rufus II said...

NE Ohio. Yep, youse guys need a break. Best of luck. I bet it's pretty up there in the Summer, eh?

 
At 5/20/2011 11:45 AM, Blogger morganovich said...

also:

if the corn farmers believed your 4.50 call, wouldn't they be selling their corn forward hand over bushel and driving the price down?

is there some reason to not to believe the price signal here or think that the farmers would not have a good idea of the coming harvest?

 
At 5/20/2011 5:08 PM, Blogger Rufus II said...

A lot of them are, Morgan. Usually with the local elevator.

 
At 5/20/2011 9:14 PM, Blogger VangelV said...

That $7.50 Corn will, most likely, be $4.50 Corn by Sept.

Unless you are shorting corn this statement is just another example of hot air.

If the cold spring and floods affect general crop production the pressure may be to the upside. Colder weather has caused trouble for many farmers across the globe this year and the risks of negative outcomes are high in many countries. With lower supply and rising demand we could see the food price increases continue after the most recent attempt to manipulate the futures markets has run its course.

 
At 5/23/2011 4:42 PM, Blogger rjs said...

here's this weeks update on corn planting and emergance, released 3PM chicago time:

http://www.agweb.com/article/Corn_Planting_Progress_052311/

except for ohio, PA, MI, WI, MN, SD, ND & indiana, its almost on schedule...

 

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