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Thursday, Dec. 18, 2014

Demands leads to increase in corn crop, prices

Sunday, July 15, 2007

(Photo)
Robert Henry, left, and Milus Wallace look over Wallace's corn crop.
SIKESTON -- Milus Wallace of Dorena planted four-times as much corn this year as he usually does.

"I planted 400 acres," he said. "Very seldom do I plant even 100 acres."

And that's the trend across Southeast Missouri, where Jeff House, agronomy specialist for the University of Missouri in New Madrid County, said this is the most corn he knows of that has been planted in the last 40 years. Grain barges are preparing to store the large amounts.

"We're all kind of anticipating a fairly large harvest if the weather permits," said Russ Mothershead II, general manager of Midwest Grain and Barge in Scott City.

The culprit? Rising prices.

(Photo)
One of two temporary bunkers for wheat storage is complete on land in New Madrid.
"Traditionally, the price the farmer is receiving now is greater than it has been in the past several years," said Paul Phell, Cargill farm service group manager for Southeast Missouri. "That encourages the farmer to plant more corn instead of other crops."

Robert Henry, a New Madrid farmer and seed dealer for Merschman, said company sales in general were 141 percent higher than last year. In New Madrid County, sales were between 400 and 500 percent higher, he said.

"Three dollars plus for corn is very attractive -- you can do a lot of things with it," House said. "A lot of it was booked at a high price."

Booking is when farmers contract their crop for a future delivery and lock in a certain price per bushel.

Wallace said he contracted all of his acreage for $3.70 a bushel. While his prices were locked in about six months ago, those prices have fallen to below $3 a bushel for September corn.

Mothershead agreed price has dictated supply. The speculative and hedge funds have put a lot of money into commodity markets, he said.

"That has contributed to making these markets more volatile, which has lead to higher pricing opportunities" Mothershead said. "I think the market is dictating more corn."

Henry said the increase in corn acres is a simple matter of supply and demand. "They're saying right now that to take care of the ethanol plants and the foreign markets, we need a 14.5 billion bushel crop," he said. "It's normally in the 9 to 11 million range."

Several area farmers also plant cotton. However, those prices have remained steady. "You're going to get a bigger return per acre with corn than you will with cotton," Henry said.

To make way for the extra corn, Cargill's New Madrid location has been making more space. "We've moved a lot of the wheat into a bunker -- basically a big, flat storage area," Phell said.

That's part of Cargill's overall goal to better serve customers. Over the past years they have taken several steps to get farmers back to the fields sooner. Now, the plant is installing a larger conveyer.

Although high prices are credited for a larger corn harvest, other conditions also play a role.

The weather is one factor, Phell and House agreed.

"We've had pretty decent pollination temperatures," House said.

Some corn was replanted after the April freeze, but due to a shortage in seed, there are actually less corn acres than there would have been, Henry said.

There have also been timely rains.

Wallace said corn varieties, especially genetically enhanced, help increase yields, too. For instance, it makes the plants more heat resistant, drought tolerant, root worm resistant and corn bore resistant, among other features.

Henry said those features will help continue large harvests. "We must keep increasing the acres over the next three to five years to reach demand," he said.