Skip to comments.U.S. Heartland Is Bursting with Corn, Soy
Posted on 11/22/2004 2:54:24 AM PST by ajolympian2004
ROCHELLE, Ill. (Reuters) - Golden mountains are rising out of the fertile farmlands of the U.S. Midwest, a changing landscape formed by huge piles of corn from the most bountiful harvest in U.S. history.
As farmers run out of space to store crops at home, they are bringing corn to country elevators, which are now bursting at the seams with grain. The excess is piling up on the ground in farm communities across the Midwest as this year's harvest surpasses available storage space by about 10 percent.
American farmers are expected to harvest 11.7 billion bushels of corn and more than 3 billion bushels of soybeans. That's enough grain to fill a train stretching from San Francisco to Chicago and back.
In the Maplehurst facility in Rochelle, Illinois, Black anticipates that 1 million to 1.5 million bushels of corn will be temporarily stored on the ground by the time harvest is complete, while close to 1 million is already mounded outside the company's facility in Amboy, Illinois, about 30 miles south.
"But it's a good problem to have," Black said, referring to the abundance of crops that heighten farm income and provide extra bushels for grain companies to handle. The industry has been struggling on tight margins for the last several years as U.S. grain supples have shrunk due to increasing demand.
Even in rural communities where farming is the primary source of income, the piles are gaining attention. Passers-by slow down to eye the growing mountains of corn that have appeared overnight.
"The farm community is definitely upbeat. But you're always thinking ahead. We know what fertilizer and diesel are going to cost us for the coming year. You're apprehensive at the same time you're excited," Mark Jagels, chairman of the Nebraska Corn Board, said in an interview.
Jagels, a fourth-generation farmer from southern Nebraska, where corn fields go on for miles, has never seen a crop this huge. But he quickly added that the cost of farming was rising, led by soaring fuel prices, high land prices and rising cash rents. Another cloud hanging over U.S. farmers is the increasing low-cost competition from abroad, especially Brazilian grain exporters.
Big crops mean big farm incomes even as they drive commodity prices lower.
"We will see record income from corn and soybean crops throughout the Midwest," said Chris Hurt, an extension economist for Purdue University in Lafayette, Indiana.
Hurt said the record grain crops meant that farmer earnings will be boosted this fall by U.S. government payments that kick in when grain prices fall below minimum levels.
Chicago Board of Trade corn futures prices are down 36 percent since June. Swollen grain supplies also mean consumers could see a break in their grocery bills by early 2005. Corn and soybeans go into dozens of food and feed ingredients.
"Taxpayers are paying more to help farmers with these low prices, but they're going to get some compensation as consumers," he said.
Milk prices should trend lower as corn and soymeal, the main dairy feeds, get cheaper, farm economists said.
Meat savings will lag due to the growth cycles of the animals, with poultry seen likely the first to fall by early next year. Poultry production can expand quickly -- just eight weeks from an egg to a broiler. Cheaper pork prices could come by late 2005 but beef prices may stay high through the year.
The cash price of corn in the Midwest is now under $2 per 56-pound bushel while soybeans are near $5. But, with government subsides, farmers will earn about an average $2.63 per bushel for corn and $5.80 for beans. Both are far below prices earlier this year, when corn hit $3 and soybeans $10 due to shortages.
Corn is by far the biggest U.S. grain crop. The bulk is fed to livestock for meat and milk production. But ethanol fuel manufacturers will use 1.4 billion bushels this season as demand soars for the gasoline alternative.
About one-fifth of the crop will be exported.
"We have a home for a lot of that corn because of the ethanol industry and the stability of our livestock industry. We're going to use nearly 11 billion bushels of corn. That sure is better than only having a home for 8 or 9 billion," said Don Hutchens, executive director of the Nebraska Corn Board.
I can see the billboard now...
"Too much corn! Global Warming! This is Bush's Fault!"
With that much grain around there is going to be a bumper crop of field mice and giant grainery rats. The grainery rats in Illinois eat cats in lean times.
The corn gods smiled upon the election.
There are quite a few of those Big Piles of corn here in Iowa, too. We've been farming for 38 years. It's the best corn crop we've ever had.
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I'm shocked the deer didn't eat all of the piles.
Just in case the grain glut leads to lower beef prices...
CUBA OPENS TO CANADIAN BEEF, NEARS AGREEMENT ON LIVE CATTLE
Office of the Minister of Agriculture and Agri-Food
Wednesday, Dec. 15, 2004 | Elizabeth Whiting
Posted on 12/15/2004 1:41:54 PM PST by Calpernia
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