Posted by JD Seller on December 29, 2013 at 07:32:28 from (208.126.196.144):
In Reply to: OT Corn Piles posted by super99 on December 29, 2013 at 06:01:11:
The piles we used to see maybe a thing of the past for several reasons.
1) There is a higher usage rate locally. Not as much of the corn has to be shipped around the world to where it is used.
2) Additional storage has been built. On farms and grain facilities, they both have more bins/buildings to store corn. When corn was $2/bu. you could not afford to pay as much for storage. Spoilage was not as big of cost. Then you plug in $6-7 corn and then the spoilage gets to be a high enough cost that you can pencil out storage. Also the trend to larger farmers that usually have on farm storage in cutting down on piles.
I just counted up the bins, I know of, that have been built in the last two years. I came up with over 10 million bushels of storage. That is just around me not counting Coops and etc.
There is a corn crop out here. It just is not stored on the ground. So don't get your hopes up for high corn prices in the near term.
The guys around here are gearing up for BIG corn acres. That is the only way they can get close to paying the high rents they have bid up. Some ground was just rented this fall for $500/acre again. This is a new contract for two years. I can't figure it out with $4 corn. The per acre gross will be closer to $700 than the $1000 they are used to.
The Corn states of Iowa,IL,and NE will have large corn crops planted so the rest of the country can switch a lot of acres to to other crops and the corn price will not raise much.
An old Econ professor told me this one time: "I have never seen anything that a farmer could not produce into worthlessness". He is quite correct in this. Study the history of farm production in the last 100 years and you can see it. There is a short term "high" price of some crop. Every farmer and his brother think they can produce a HUGH crop and everyone else will not. So you get boom and bust cycles.
This post was edited by JD Seller at 09:36:12 12/29/13.
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