Corn prices to go up

The flood waters in the Midwest will go down and corn prices will go up, according to two agricultural economists at Auburn University.

That’s what happens when the country’s largest corn-producing state is underwater.
Dr. James Novak, a professor and extension specialist, and Max Runge, an extension economist, said the floods in Iowa and other Midwestern states could reduce the nationwide corn supply, but it’s not the only reason why prices will be on the rise.

Runge said the drought in the Southeast, high energy prices, as well as rising trucking and heating costs and the floods have all contributed to the increase of corn prices.

“It’s a huge triple, double, quadruple whammy, all at once,” he said. “A perfect storm, so to speak.”

And a storm that is bound to affect a number of areas, including consumers, producers and manufacturers.

“We are going to be short of corn, there is no doubt about that, and prices are going to be high,” Novak said. “Where it’s all going to end up, we don’t know. Farmers are very resilient and resourceful though.”

Runge said he doesn’t expect the shortage to affect consumer prices much, but farmers could be hit the hardest. He said Alabama is a “corn deficit state” because it uses more than it produces, mainly for the poultry and catfish industries. There isn’t much corn-feed beef in the state.

When corn is scarce, Runge said farmers may feed fewer birds or feed them less, which could result in leaner cuts for the consumer.

“I don’t think it will have a huge affect on what we consume locally, but it could potentially contribute to prices down the road,” he said.

Besides corn, the soybean crop is an issue. Novak said prices are going up because of competition from South America and a demand for seed.
Even though soybeans are often a “back-up crop” to corn, Runge said fewer acres are used for it nowadays because more acreage is being used for corn to produce ethanol.

“Corn really has a ripple effect throughout agriculture,” he said.

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