COLUMBUS — For Ohio corn growers, their future rides on two numbers - the price of corn per bushel, and how many bushels they sell. That may seem like Agribusiness 101, but in 2014, those numbers are worrying corn growers as never before.
Corn grower Dan Yoder of Mechanicsburg is one of those growers. Attending a recent state Corn Growers Association event, he stood outside a large barn listening to the talk from fellow farmers about the price of corn. He had just sold some corn at well under $4 a bushel. That meant he lost money compared to the cost of producing that corn.
“But this is the life we choose,” he reflected. “No one is making us do this.” He, like many other growers, feels that things will be alright for now. But the future is murky.
On Thursday, according to the Chicago Board of Trade, a bushel of corn was selling for about $3.56.
“For corn growers right now, the price is the biggest issue,” said Dr. Matt Roberts, Agriculture Economist specializing in marketing with Ohio State University Extension. “(Last year’s) record yield has put a lot of pressure on the price, and the effect on profit.”
He said prices are now a lot lower than expected, and that has corn growers wondering about their revenue and profits going forward. Roberts was asked if corn growers are losing money when they sell at, for example, $3.50 a bushel.
Earlier in 2014, Roberts conducted an online grain marketing course, and as part of that he surveyed producers on their total cost of production and “what I got was between $2.70 a bushel and $5.20 a bushel. Total cost of production. So yes, at $3.50, most producers would lose money at $3.50.”
But, he said the good news is that this $3.50 is on more bushels. “So even though prices are lower they are selling more bushels, so that is somewhat of a consolation prize. Significantly more bushels.”
Is there concern about making it through the next winter? “Realistically, making it through the 2014-15 season, farmers will be OK. There have been enough profits over the last four years, it certainly won’t be a great year profitability-wise, but it should be fine.”
He said the real worry is what happens if Ohio corn growers have another good crop in 2015. “So we come into 2015 with low prices and then we have a good crop. Then what happens to prices and then what happens to profitability? That is what I am worried about, honestly,” he said.
Does he have a prediction for the 2014 yield? “We will definitely set a new yield record in Ohio. It has been cool, but historically cool summers are the ones that turn out the best yield. I think the only thing that has held the yield back has been the extreme wetness early on. I suspect we are going to see tremendously … very good yields here in Ohio,” he said.
But that will be for most farmers, so prices will be low. “The ideal is that you (an individual farmer) have lots and lots of bushels and no one else does. And that there is lots and lots of demand. Then there are lots of bushels and high prices. The reality is that that doesn’t always happen.”
The good news has been that as per bushel prices have dropped, sales have increased, he said. Where is the additional corn purchased coming from? “As we have seen the prices drop, we have seen more and corn going back into feed rations. Exports have continued to recover from 2012. As prices have gotten lover, consumption has started to turn around,” he said.
“Feed, ethanol, exports… with a drop in prices… all of those consumptions are going back up,” he said.
He said storage should not be problem over winter, but “at harvest, storage is going to be very, very tight because there is going to be so much harvested. I think these is going to be a lot of storage pressure.”
What will farmers do? “There will be some corn left in the field, delayed harvest, some outdoor storage, some farmers may store outside on corn piles - but this is nothing that hasn’t been done before in high crop years,” he pointed out.
“We are expecting a very good harvest this year,” said Tadd Nicholson, Executive Director of the Ohio Corn Growers Association. But he cautioned that it may be too soon to speculate if the yield will break any records.
He said what has been most interesting for corn growers has been the fact that “we have had multiple years of strong production in a row, so we have piles of corn to sell.” He said that is why the prices have fallen.
Fayette County corn grower Ron Rockhold, a member of the Southwest Ohio Corn Growers Association, agreed that there will be a big corn crop this year, but low prices to go along with it.
“I think we will have some problems at harvest,” he said. “First with moisture, then with storage.” He agreed that storing all the corn produced this year might be difficult in many parts of Ohio.
But he doesn’t think that will be the case as much in Fayette County.
“We have an advantage here. We have 120,000 bushels a day going to the ethanol plant in Bloomingburg at harvest,” he pointed out.
In late August, the USDA predicted nationwide the corn yield per acre average would be about 167 bushels. In Ohio, Rockhold said, that prediction is a little higher - 170 bushels.
Rockhold farms about 500 acres, and he agrees that if there are record yields in 2015, “It will be nearly impossible to make money on corn next year” because the prices will fall so low.
However, he also sees the same upside as Dr. Roberts.
“I think we will have a very good crop this year. And our salvation will be that we will have a lot of corn to sell and we will sell it, and will generate a lot of dollars.”
Gary Brock can be reached at 937-382-2574 or by Twitter at GBrock4.