Malatya Haber Drought induces increased grain prices
Home News Livestock Crops Markets Hay, Range & Pasture Home & Family Classifieds Resources This Week's Journal
Commerical Hay Equipment For The Farm
Agro-Culture Liquid Fertilizer

Farm Survey

Journal Getaways

Reader Comment:
by Eliza Winters

"I think that the new emission standards are a great move. I think that the"....Read the story...
Join other discussions.

Drought induces increased grain prices

By Jennifer Carrico

CROPS—Iowa State University Grain Market Specialist Chad Hart discussed the crop market outlook during the Pro-Ag meeting held in Greenfield, Iowa, recently. (Journal photo by Jennifer Carrico.)

The area planted for the 2012 corn and soybean crop was the largest ever, but drought conditions made yields a lot lower than expected.

"The average corn yield for the U.S. corn crop this year was 122 bushels per acre as compared to 147 bushels per acre last year, down 17 percent," said Iowa State University Grain Markets Specialist Chad Hart. "On the soybean side yields were down also--37.8 bushels per acre this year as compared to 41.9 bushels per acre last year, down 10 percent."

Lower-than-expected yields have pushed prices higher in order to keep up with the demand for grain for feed, ethanol and exports.

"If we can't meet the demand, these record-high prices will last for quite some time," said Hart. "The weather had a huge influence on the prices all summer and fall and that will continue."

He said looking back in history at past droughts, the crop generally ends up better than expected. Prices this year backed off a little when the quality went up. Prices, in general, are best right before harvest.

"The key this year is the variability in yield," said Hart. "Overall, Iowa didn't have much change of corn yield off of the previous year, but the variability across Iowa was extreme. Some states, like North Dakota and Minnesota, saw large increases in yield over the previous year because 2011 was a harder year for them and they received proper moisture this year."

Soybean yields for the 2012 crop didn't have much change from the 2011 crop. Late season rains helped improve soybean yields across much of the Midwest.

Hart said the U.S. generally provides about 35 percent of the world's corn supply, so when the U.S. supply is down, so is the world's. South America does raise a lot of grain, but he said they are not expected to produce enough to make a difference with market prices.

However, the South American soybean crop can make a difference since they produce a lot more soybeans there than that of U.S. farmers.

"Looking at soybean prices through the rest of the year, we should see soybean prices coming down because of the South American production," he said.

The high corn prices have led to a 50 percent decrease in demand for corn worldwide. Producers continue to look for alternative, cheaper feed sources.

Soybeans have continued to have a strong demand, mostly due to China. There they are wanting it for an increase in the need for vegetable oils, which has led to a food versus feed debate for some livestock producers.

Hart said ethanol demand will stabilize and back off a bit with the higher corn prices. "Demand isn't expected to increase, but if it does, it only takes two weeks to build production back up and produce more," he said. "Part of the reason for higher corn prices over the past five years is the increase in ethanol production. If ethanol production levels off, corn prices aren't expected to be affected. Right now weather has the most affect on corn prices."

The current drought outlook isn't showing much relief for the rest of the year. Hart said if no moisture is received in the Midwest and grain growing areas, corn prices could climb as high as $9 per bushel.

The 2012-2013 USDA prices for corn are $7.80 per bushel on average, 2012-2013 futures are $6.83 per bushel and 2013-2014 futures are $5.93 per bushel.

The 2012-2013 USDA prices for soybeans are $15.25 per bushel on average, 2012-2013 futures are $14.04 per bushel and 2013-2014 futures are $12.71 per bushel.

"The main factors affecting grain prices are soil moisture issues, biofuel and export strength and the worldwide response to the drought-induced pricing," said Hart. "With more CRP (Conservation Reserve Program) acres returning to production, that could affect pricing as well."

Jennifer Carrico can be reached by phone at 515-833-2120, or by email at

Date: 12/03/2012


Copyright 1995-2014.  High Plains Publishers, Inc.  All rights reserved.  Any republishing of these pages, including electronic reproduction of the editorial archives or classified advertising, is strictly prohibited. If you have questions or comments you can reach us at
High Plains Journal 1500 E. Wyatt Earp Blvd., P.O. Box 760, Dodge City, KS 67801 or call 1-800-452-7171. Email:


Archives Search

NCBA Convention

United Sorghum Checkoff Program

Inside Futures

Editorial Archives

Browse Archives