Farmers eyeing falling corn, bean prices

Oct 10, 2008      The Gazette - Cedar Rapids, Iowa

Rod Boshart

Oct. 10, 2008 (McClatchy-Tribune Regional News delivered by Newstex) -- DES MOINES -- For Iowa farmers, the heartburn of flooded-out crops and yield uncertainties is giving way to the ulcers of commodity market fluctuations.

Some grain producers feverishly working to complete their corn and soybean harvest are facing eroded land and eroding prices as they put the wraps on what state Agriculture Secretary Bill Northey described as a "crazy year." Northey said Thursday a lot of farmers are reporting better-than-expected corn yields in areas that escaped record flooding, while soybean yields are somewhat disappointing and replanted crop acres in flooded areas are benefiting from a late-arriving killer frost.

The down side is the bullish weather factors that drove corn prices to $7.50 a bushel and bean prices to $16.50 per bushel last July have given way to drops of $3 in the corn prices and beans below $10 a bushel, said Chad Hart, an Iowa State University extension grain market analyst. Worldwide financial uncertainty also are undercutting energy prices, including ethanol, and hurting export prospects, he said.

"The early heartburn was just seeing if this crop was able to produce. Now that we've gotten past that, it's the heartburn of the markets and the volatility we're seeing here," Hart said. "We've seen the upside and now we're seeing the downside of the volatility." Yield-wise, Hart said reports vary widely across Iowa but on average it appears this year's production is surprisingly good and there are early indications that replanted acres have developed fairly well.

"Things are looking a little better than what was thought just a couple weeks ago," he said.

Northey said flood-related crop damage will not be near the $3 billion in losses initially feared, but likely will still "be north of $1 billion" with 1 million acres left unplanted and yields from another 2 million of replanted acres likely to be well below their potential.

"We know we got hurt by having to plant some crops late," he said.

Since the rules still haven't been written for the government disaster program, Northey noted, it's difficult to tell how farmers will fare from crop insurance and emergency assistance programs.

Members of a Rebuild Iowa Advisory Commission task force on agriculture and environment said Thursday there is uncertainty, frustration and stress among some farm families awaiting word on what help they might get in fixing terraces, grass waterways or levees before winter sets in.

-- Contact the writer: (515) 243-7220 or rod.boshart@gazcomm.com

Newstex ID: KRTB-0043-28656391

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