What is in this article?:
- Plan to make corn profitable in 2014
- A few corn marketing tips and ideas for 2014
- Marketing plans are more important this year with decreases in corn prices.
- No marketing plan is going to work out exactly but it will give a grower a structure and discipline for making marketing decisions.
LOWER CORN PRICES this year will make profits harder to come by and require more marketing expertise by growers.
The days of planting a corn crop, applying one chemical, harvesting it and then taking it to the grain elevator and expecting a profit are probably over.
Considering current prices and market conditions, making a profit will take effort, agree Extension economists Max Runge and Nathan Smith, speaking at the recent Alabama Corn/Wheat Short Course held in Shorter.
“The price outlook for corn is not so great,” says Auburn University’s Runge. “If we look out to 2015 and 2016, the markets are telling us that there won’t be a lot of movement in price. But keep in mind, a lot could happen between now and then.”
Weather, politics and a lot of other things can and will change in the next two years, he said.
“Our improved yields, technology and management, and we’ve got better irrigation and precision agriculture practices. Our yields will continue to increase, but the demand is out there. However, it has to be at the right price. Lower prices are expected to spur demand for ethanol, so that’ll help with prices. Hopefully, we’re looking at close to the floor with some of these prices now,” Runge said.
Higher prices in recent years have resulted in more corn acres throughout the world. “China was the No. 2 exporter in the world 10 years ago. And now they’re the No. 5 importer of corn, going from a competitor to a customer, so changes such as this are impacting the market," he said.
U.S. corn acres and yields continue to increase, he says. “We’ve also got more corn being planting in non-traditional areas, such as in some parts of the Midwest where cattle formerly were grazed. Our yields are becoming more consistent because of improved genetics and cultural practices such as irrigation.”
This past year, the average corn yield in Alabama was 150 bushels. “I can remember a time when the average state yield was half that number. Our yields are going up, and that’s a good thing. Our five-year average on corn is 117 bushels per acre," Runge said.
There’s an increasing demand for food and food products as the world population increases, he says. “But probably more important is that the middle class is increasing, and it’ll triple before 2050. Demand and consumption of grain continues to climb.”