Corn farmers across the United States are preparing for a near-record harvest thanks to a smooth, fast spring planting and favorable summer weather.
Problem is, corn prices are horrible.
Minnesota's corn crop was 97% silking on Monday, according to the U.S. Department of Agriculture. That's well ahead of the five-year average for this stage of the growing season and far better than last year, when only 75% of the corn crop was silking.
"I just drove two and a half hours this morning and saw the best crop I've ever seen in early August," Dennis Inman, vice president of grain for CFS Cooperative, said Tuesday. The co-op runs 18 grain elevators, mostly in southeast Minnesota.
Nationally, the USDA projects a corn harvest of 15 billion bushels, slightly off the record 15.1 billion bushels set in 2016.
And yet with corn trading at close to a 10-year low at $3.10 per bushel at market close Tuesday, a bumper crop isn't necessarily cause for celebration. Elevators in Minnesota are offering well under $3 per bushel to farmers this week. The break-even price for corn in the state is somewhere around $3.80 per bushel.
The best hope for a rise in prices is natural disaster in other corn-producing countries or states.
"It feels like until we have some kind of a crop problem, we're going to be at prices that are at or below the cost of production," Inman said. "With the whole thing going on with COVID and the economy, it's going to be hard to consume our way out of this abundance of grain."
Lower demand for ethanol and livestock feed thanks to coronavirus are drags on corn prices.
But some farmers have seized on a recent large purchase of corn by China, hoping that nation will buy more of the commodity and drive up the price.
"We're at the bottom of the market right now," said David Bau, a University of Minnesota Extension marketing specialist in southwest Minnesota and former ag loan officer.
Government income protection that's part of the Farm Bill and coronavirus relief will help most grain farmers avert disaster, Bau said.
"Without the government payments they'd have large losses, just like the livestock producers," Bau said.
Despite the poor prices, a good harvest is better than a bad one, said Dave Nicolai, a crops educator for the University of Minnesota Extension. Farmers will be able to store corn this fall and hope for prices to rise.
"These growers are going to have a cautious optimism," Nicolai said. "At least you have options if you have the bushels."
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