Party over but corn growers had a good year, economist says

By James Pascual

Corn growers are optimistic about this year’s harvest and price, even though prices dropped from a lofty $8 per bushel earlier this year. But no one got that price as elevators weren’t buying when price peaked, said former OMAFRA economist and Walkerton grain farmer Colin Reesor. Elevators had hit the ceiling on their line of credit so farmers could “dream on” about getting top dollar, Reesor said. “This experience was brand new for the elevators. Futures said $8 but real-life was $5. There was a disconnect between the two. It was an illusion.”

But price was still high for those who forward contracted their corn and soybeans, he said. “It will be a pretty good year for people.”

He added, however, that “from an agricultural point-of-view the party is over.”

Fertilizer costs, which exploded last year, haven’t dropped much, he said. “They go up like gasoline prices. They go up like a rocket and come down like a balloon.”

Meantime, corn hovered at $4 per bushel as few elevators were paying in the $3.90 to $4 range in late October. Corn prices in October last year hovered around $3.50 per bushel. Before shooting up in early 2008.

“Our basis is starting to improve,” says Don Kenny, an Ontario Corn Producer Association director. He says moisture levels are around 20 per cent in most corn fields and yields are above average.

Not much corn had been taken off the fields by the end of October but yields are expected to be variable, though “overall, look pretty good,” said OMAFRA forage specialist Joel Bagg, in Lindsay. Eastern Ontario Kemptville-based OMAFRA crop specialist Scott Banks agrees: “I’m hearing of quite good yields and below average yields. Bushel weight has been good.”