Corn is King
Published: 25 October 2010
Here in Wyoming, we don’t think too much about corn – growing it, feeding it or eating it. At least until August, when the sweet corn is ready.
But, if you’re involved in any type of agriculture, the amount of corn planted, harvested and stored each year, not only in America, but also worldwide, will affect the ag products you produce, sell or buy here in Wyoming.
If you raise cattle, sheep or hogs anywhere in the world, corn rules, and it will be a big part of your business decisions. I think we in Wyoming, before the ethanol issue rose a couple years ago, didn’t really think too much about the price or supply of corn. Sure, we always heard about it in the fall when the cattle or sheep buyers came around and used the corn price to lower the bid placed on our yearlings, calves or sheep. However, it really hit home when prices for cattle and sheep dropped and corn prices rose because of ethanol, because that hurt livestock prices even more. Because of that, corn really came on our radar screens and we started paying attention.
Nowadays, with cattle and sheep numbers at all-time lows, and demand slowly rising, we tend to think we are in the driver’s seat again. In the last couple of weeks, we found out that corn still is king.
During the summer, when the corn was growing, it looked like we would get a decent crop here in the U.S., while Russia and parts of South America would have poor crops. Everyone now watches Russia, China, India and Brazil to gauge the world economy, as those are the rising and developing countries these days.
Over the summer, livestock numbers were down and corn looked promising, along with the futures, which are good for business. Everyone from the hills of Wyoming to the packers was looking to make some money. We did see a rise in prices at the meat counter, which brought some grumblings from the consumer, but that is life. Most livestock producers here in the state had a smile on their face and sold their calves, yearlings and lambs in July or August.
Then came September, when corn futures and options trading in Chicago more than doubled, and we saw corn rise above five dollars a bushel for the first time in two years. This action really caught the speculators’ attention, and the USDA Crop Report lowered this year’s corn crop estimate because of heavy August rains in the Midwest. Calves dropped 10 cents immediately, and in late September corn rose to over $5.28 a bushel. Then, the USDA found three million bushels in storage they didn’t know about, causing calf and lamb prices to somewhat rebound. Analysts said, even if you would to lock in your corn, the feeder could still make some money.
As of this week, the corn harvest is about halfway complete. The USDA bean counters are busy watching the corn harvest to ensure that corn rules, even through the hills of Wyoming.