Corn Rules Today
Those raising or feeding cattle or sheep in the High Plains or Rocky Mountain regions have to understand what happens in a corn field in Iowa or Brazil will affect their business. Staying current on the news and prices should be a weekly concern.
Currently, worldwide corn prices are high due to China buying all the soybeans and corn lately. In the last year, corn prices have gone from $4.50 or $5 to a high of around $7.50 a bushel, recently dropping to around $6.94 a bushel this past week. During the last year, corn prices have dropped lower, but have recovered quickly.
Realizing we are dealing in commodities, we know supply and demand runs the show, but is this always the case? There are currently a large number of cattle on feed, and due to drought conditions, those numbers are going to grow. With high corn prices, some want heavier cattle to feed and finish out quickly, and there are some who still like the light calves to grow on grass or winter wheat for a cheaper gain.
Although, even with high corn prices, the price of feeder lambs is going up. Some feeders are buying all the lambs they can find. We realize there is a shortage of lamb products in the meat case and the foodservice industry doesn’t seem to be affected by the price of corn. At the moment, corn affects beef, but not so much lamb. I know there is someone out there who has an answer for this, but to this bunkhouse economist, it doesn’t make sense.
This past planting season was good for most farmers in the Corn Belt, thanks to good weather for planting and good soil moisture for growing. The U.S. Department of Agriculture 2021 estimate assumes planted acreage of 91.1 million acres. This is near an all-time record if those figures hold.
The ending stocks of corn are around 1,300 million bushels, which is around the average over the last 12 years. Brazil is coming out of a drought, and Argentina has placed restrictions on corn exports in fear of raising the price of fattening their own cattle – helping U.S. corn prices. Some smaller countries around the world, such as Ukraine, have really ramped up their corn production this spring.
Historically, feeder cattle prices have been determined by several factors, with corn price and fed cattle price having the greatest impact. Corn prices typically have a downward relationship to both fed and feeder cattle prices. This most likely holds true today, but there are so many other factors to include, making a decision is just more sophisticated these days.
I recently learned there are six different varieties of corn – sweet corn, popcorn, flour corn, dent corn, flint corn and pod corn. Sweet corn is a naturally sweet variety, which is harvested in the early stages, while popcorn is characterized by a hard outer shell and minimal soft starch content, but dent corn accounts for the majority of U.S. production. Flint corn is primarily found in America, Argentina and Canada, while pod corn is mainly ornamental. Genetically modified varieties are found in America, Argentina and Canada.
There we have it – more than anyone ever wanted to know about corn. What we all know is corn is very important to everyone’s food supply worldwide.