$7 Corn

[P-F]

Hubby and I were talking today the planting intentions report cam out today and I guess corn acres were down substatially
anyone think we are headed for $7 + corn
That sure will halt the construction of Ethanol plants

 

[knabe]

some ethanol plant construction has already been halted

 

[jason]

They halted the production on plant in our town, citing lack of obtaining financial backing.

I personally do not think ethanol is the solution to our problems.  I think we need to drill more over here, build more refineries, and oppose tighter restrictions on the fuel mpg requirements on new cars.

My girlfriend just recently bought a Jetta Tdi, which is a Jetta Turbo Diesel.  Even though diesel is 20% higher than gas right now, she is still saving lots of money.  I averaged out the last tank and got 44 mpg and that is with an automatic.

 

[Dusty]

Ethanol plant construction has been halted big time.  A lot of plants that even had the dirt work done are postponing construction indefinetly.  Plants are getting their financing yanked and are left high and dry right now.  If we get a drought this summer, corn will run to $7 pretty easy i think.  We have had a cornbelt wide drought since 1988.  A lot people believe that these drought's run on a 18-19 year cylce give or take a year or two.  So in other words we're due.  If we had a drought and yields were down 15% or so from trendline katie bar the door this thing will run....  I do think however that if the board runs to $7 that current ethanol plants will just quit buying corn and only grind what they've got bought already.  Interior basis will take a crap and could drop as low as 70-90 under.  The corn market has never been in a situation like we have here now.  There's no other scenarios to refer to to try and guess what will happen.  If the dollar keeps getting killed in the world market it will only add fuel to the fire...
As far as $7 corn and livestock go i think you will see cattle getting killed way too light...select-choice spreads will get wide, people will keep killing more cows, and on the hog side herds will be reduced and they could possibly just start killing the baby pigs like they did the last time it was cheaper to kill them than feed them....

 

[chambero]

I don't know if you folks in the midwest are seeing it, but oil and gas drilling has picked up by orders of magnitude in Texas and Oklahoma.  Do some internet searches on "Barnett Shale".  There is another formation in the vicinity of Shreveport, LA area.  Yall can't imagine what a boost it is to our economies down here.  It will take a while to make a difference, but drilling all across the western US is taking off big time.

 

[garybob]

I don't know if you folks in the midwest are seeing it, but oil and gas drilling has picked up by orders of magnitude in Texas and Oklahoma.  Do some internet searches on "Barnett Shale".  There is another formation in the vicinity of Shreveport, LA area.  Yall can't imagine what a boost it is to our economies down here.  It will take a while to make a difference, but drilling all across the western US is taking off big time.

They're hitting Natural Gas in the "Fayetteville Shale Formation" that runs under most of Central Arkansas.

GB

 

[knabe]

i can personally vouch for this in OK.  we have just resigned a long term lease on a pumping station and dramatically enlarged facilities on our property, so large, it's essentially triple in size and we had to have them change access to the pasture to the complete other side of the facility.  they wanted to purchase the property, but we said no.  drilling activity in the area has picked up and they no longer have to hire excons as a first choice which says something else.

i agree with chambero about buying it elsewhere.  hopefully, those economies will diversify before their oil runs out.  i kind of doubt they will.

 

[aj]

I heard once that 6$ was the break even to make ethanol work.....unless they sell the byproduct at an increased price. I think there is a world of hurt coming down on the livestock deal....unless the numbers go way down. ;D

 

[shorthorns r us]

shorthorns cows for sale.

buying lowlines!

 

[aj]

Easy tiger! ;D

 

[fluffer]

Hubby and I were talking today the planting intentions report cam out today and I guess corn acres were down substatially
anyone think we are headed for $7 + corn
That sure will halt the construction of Ethanol plants

 

[Dusty]

I heard once that 6$ was the break even to make ethanol work.....unless they sell the byproduct at an increased price. I think there is a world of hurt coming down on the livestock deal....unless the numbers go way down. ;D

The breakeven corn price for ethanol fluctuates according to the price of ethanol, distillers and natural gas mainly.  Depending on how a plant hedged themselves in those markets will dictate how long they can run in the black.  Right now it is around $6 if you bought and sold everything in the cash market.

 

[Turkey Creek Ranch]

The corn market has gotten REALLY inflated. It has hurt the overall effect of our economy. Sure, it is GREAT for us farmers, but it has caused millions of dollars to be put into ethanol plants, and then it turns out that they cant afford to buy corn to run. It is just a mess....

My thoughts, the market will correct itself eventually and go WAY down

 

[kanshow]

the market will correct itself eventually and go WAY down

  It has already taken a big hit from where it was...  Remember the week before Easter when grains were down the limit everyday?    There were a few days when our local elevators weren't even giving bids on grains.

 

[Dusty]

the market will correct itself eventually and go WAY down

  It has already taken a big hit from where it was...  Remember the week before Easter when grains were down the limit everyday?    There were a few days when our local elevators weren't even giving bids on grains.

Wheat has fallen back...but corn made new all time highs today.

 

[kanshow]

Just think what it would have been without that week that it fell off. 

 

[fluffer]

Well, golly,
I see that yesterday when I responded on this my thoughts vanished  ???  My computer kinda froze up while I was responding, so I guess it didn't take my comments.

My comment was-

I had just gotten finished reading that report when I got onto here and saw this topic.  Here is what I read from the report

Corn acres will be down about 8% this year to 86 million acres planted.  This is caused from crop rotation as well as the increased cost in producing corn.  And the amount of corn used to ethanol will double to 30% from around 14%.

However, I also heard last night that if farmers can get a tractor on it, it is getting plowed up.  This includes pasture and hay ground.  Therefor fat cattle could be around $1.50/lb by 2009.  I hope whoever is saying that knows what they are talking about and is right!

Fluffer

 

[fluffer]

Hubby is the VP of our local farm bureau which had a meeting last night.  At this meeting he learned that according to the Ohio Department of Agriculture, the mandates for corn being produced into ethanol can be terminated at any time.  So in otherwords, if the ethanol thing isn't working out, they don't have to put corn into ethanol production.  If/when this happens we could/will see the price of corn go down fast.  I guess the crop farmers are pretty upset about it.  Others on this site may know more about this....

Fluffer

 

[Dusty]

Hubby is the VP of our local farm bureau which had a meeting last night.  At this meeting he learned that according to the Ohio Department of Agriculture, the mandates for corn being produced into ethanol can be terminated at any time.  So in otherwords, if the ethanol thing isn't working out, they don't have to put corn into ethanol production.  If/when this happens we could/will see the price of corn go down fast.  I guess the crop farmers are pretty upset about it.  Others on this site may know more about this....

Fluffer

Yeah if they yank the ethanol requirement in the next energy bill and take away the tax subsidies for ethanol corn will almost certainly go down to the point where ethanol competes in the open market with petroleum.  Which I think would be a good thing personally.  Right now the ethanol mandate is artificially inflating the price of corn along with some other things happening right now.  Mostly the value of the dollar.

This is a prime example that if you live by the government you can also die by the government.  If you're going to enjoy the profits of the grain prices caused by the ethanol mandate, you have to be prepared to for what will happen if the government takes away that mandate. 

 

[fluffer]

You bring up another point- the farm bill-
I guess things are so bad in DC that they may not get a farm bill out, they may have to extend the already existing one.  I don't know about you all, but if I was getting paid to get something done and couldn't, I don't think I would have a job anymore.  That is the government for you  :-\  I think it is only the tip of the iceberg too.  It is going to be a long painful ride to the botton  :'(

Fluffer