Forgive me for returning to this topic again, but history is being made in the corn market and the mainstream press isn’t paying attention. Corn prices hit an all time high last week. As you pull on your boots and head for the garden or fields for spring planting, what are your plans? Are you ready for some seismic changes in food prices? Do you feel too helpless to do anything much but keep on hoeing? Am I overreacting?
Corn recently made it well into the $7.00 plus per bushel range, to an historic high, and a rise of about a dollar a bushel from the week before, indicating how erratic the market has become. As I write this, the market is bobbing up and down around $7.50 like a basketball during March Madness. The USDA just came out with a report in which it said, much to the surprise of nearly everyone, that corn stocks remain unchanged. But then the experts came on with a litany of “it depends” about how one should interpret the meaning of “unchanged.”
We’ve heard for months now that corn was in short supply. There are a number of reasons, supposedly. The demand for ethanol was going up, supposedly. The ethanol plants were buying more corn, supposedly. Other countries were importing more corn, supposedly. Weather outlooks are iffy, supposedly. I can write more sentences ending with the word ‘supposedly’, but what’s the use. Even the grain traders are saying they don’t know what’s happening.
You can read all this stuff in the farm news yourself. I don’t really care to hear any more ‘supposedlies’. I just want to know the what of it, not the how or why. At the livestock auctions in eastern Ohio last week, buyers and sellers were talking glibly of ten dollar corn by this summer, lamb prices over four dollars, and heaven help the cattle market. If you happen to be raising your own calves for meat right now, you could not have a better investment IF you aren’t feeding them seven dollar corn.
Others at the auctions were convinced there is going to be crash. Even farmers who still have last year’s corn to sell (not many), looked at me and said: “this is not good.”
The National Corn Growers Association and food wholesalers and retailers are at each other’s throats over the way ethanol appears to be driving up the price of food. The chairman of Nestle’s has been particularly strident in his criticism, really ripping the corn growers and the ethanol suppliers and especially the government’s generous subsidies to the ethanol plants, insisting that the world needs all its tillable land for human food, not car fuel. I think he’s right, but the corn growers are lashing right back, declaring that the food industry’s attacks are inaccurate, unwarranted, etc. etc.
This much I know from history. During the Irish famine, the landlord farmers of Ireland continued to sell their oats to England where they could get a better price for it than from the starving Irish, until the government stopped them. I am way too pessimistic to think that could not happen again. There are plenty of people who would choose to use corn to feed their cars, boats and airplanes rather than starving people.
What if food shortages really do develop, even temporarily? What are we supposed to do in anticipation? Maybe everyone who knows how should plant their backyards to corn. No, I don’t have seed for sale— I’m not trying to take advantage of the situation. I am just thinking that if corn goes to ten dollars a bushel, I could plant and harvest five acres by hand real cheap, and at 200 bushels per acre, have $10,000 worth of corn. Farmers, for sure, are planting more corn according to reported government planting intentions, so why not the rest of us.
Well, not all of them. One of my favorite contrary farmers, who farms about 800 acres near me, called to tell me that he was once more going against the flow. He is planting all soybeans this year, no corn it all. I’d accuse him of reading my novel, “Pope Mary” who did the same thing, but I don’t think he’s ever read a book in his life.