Heavy showers have pelted parts of the Corn Belt this week, dumping inches of water over already-flooded parts of Iowa, Nebraska and Minnesota. As a result, corn prices climbed further into record territory Friday and threatened livestock owners who depend on the grain to feed their herds.
Six weeks of rain have flooded untold acres of corn and soybean fields in the U.S. heartland, forcing farmers to abandon their crops and sending international food prices skyward. Corn for July delivery rose to a new high above $7 a bushel on the Chicago Board of Trade. Prices broke past the $7 barrier for the first time Wednesday.
“You pretty much have to assume that it’s too late to plant corn,” said Ken McCauley, a Kansas farmer and chairman of the National Corn Growers Association. Still, he added that planted corn could still produce good yields if the weather dries out in the near term.
Corn’s spike has raised questions as to how long demand will support the unprecedented price levels. Livestock owners will likely be forced to slaughter more cattle, hogs and chickens to cope with rocketing corn-based animal feed, and ethanol producers who use corn as their main feedstock will also suffer.
“This is a price level here where I don’t see a sector that can afford it,” Ward said. “The livestock sector cannot afford the corn at this price, the ethanol producer cannot afford it and the dairy producer cannot afford it.” Record corn prices have forced five small U.S. ethanol plants to shut and output of the biofuel could be slowed for months.
As much as 2 billion to 5 billion gallons of ethanol could go offline in the next few months due to high corn prices. The United States has an ethanol production capacity of about 8.8 billion gallons per year from 154 distilleries. The flooding has also inundated the Midwest’s soybean crop, pushing prices to near record levels this week.
Source: MSNBC.com and Associated Press