Corn prices rocket but farmers don't celebrate

The price of corn has hit record highs in recent days due to fears the 2008 harvest will be severely stunted by this spring’s flooding in Iowa, Nebraska and elsewhere. Iowa State University agronomist Roger Elmore says having the price of a bushel of corn cross the eight-dollar threshold isn’t that much comfort to many farmers in any state these days.”
This is a tough time for corn growers as you look at the amount of acres that are flooded and that are in need of replanting, we’re talking maybe up to 20 percent of our corn acres are in jeopardy right now,” Elmore says. “Unfortunately, the 80 percent that’s out there, that is not in this black list or whatever you want to call it, doesn’t look good either…These are not good times for corn and corn growers.”
Farmers who’ve had their corn fields turned into ponds face a dilemma as it’s not too late to replant, according to Elmore. “Corn now, if you could get it planted within the next week or so, might yield 50-percent of its yield potential,” Elmore says. “…Given 50-percent yield potential and the cost to replant and all these kind of issues that go around farmers are weighing that relative to the price of the grain…all-time highs and then comparing that to what would happen if they just took the crop insurance options.”
Some analysts have predicted the price of corn might go as high as 11-dollars a bushel, but Elmore says there’s “much risk” in replanting corn rather than opting for crop insurance despite those high prices. “When you look at those numbers and compare to the old days of $2 or $3 corn, these are astronomical prices,” Elmore says, “so people are weighing that — the economic returns of replanting even though yields will be low and there’s a possibility or fall frost and drought during pollination — (farmers) are trying to scale all that out and say, ‘Where’s the risk at and what’s the best way to make this business…profitable?'” Seed companies are shipping new varieties of corn — “early season hybrids” — that mature more quickly.
Elmore is among those who are crunching the numbers, trying to provide more usable data to farmers who’re calculating whether replanting is a legitimate option. “They aren’t in Vegas, but every year is dependent completely on forces that are outside our control,” Elmore says. The price of soybeans has also skyrocketed on the trading markets, to more than 15 dollars a bushel.