Corn Surges to Record Prices on Drought Fears
As drought tightens its grasp on the nation, corn prices surge to record highs -- more than $8 a bushel at local elevators.
As his son prepares to show cattle for the final time at the Adams County Fair, Brian McMahon couldn't help but think of the drought putting his animals and crops at risk.
"It's a huge problem, huge concern and not just for me, but across the entire midwest," he said.
There's little hay for cattle. Ethanol plants can't afford to buy corn, and neither can those who feed it to livestock.
McMahon put it simply. "Margins are not looking good in feedlots."
Or as the head of grain at one of Nebraska's largest co-ops said, "We're in uncharted territory."
Gail Ortegren of CPI said drought has driven corn prices up a dollar and a half in the last month.
He said, "Futures market yesterday set all time highs."
For the first time, corn is selling for eight dollars a bushel. Farmers like McMahon try to wrap their heads around it.
"$8 corn, to be honest, I don't know if we've topped out in it," the Ayr farmer said.
Whether it's trading speculation or ethanol, experts say the rules have been re-written the last few years and drought only complicates matters.
Ortegren said, "We've been using that word volatility the last two or three years. It's even worse this year than its been."
Record corn prices should be something for farmers like Brian to celebrate. And they have been profitable the last few years. But they won't be this year unless they can produce
"My dad always said it doesn't make any difference was the price is if you don't have anything to sell," he said.
Brian farms about 15 miles south of Hastings, in the Ayr area. He was hit several times by hail and even replanted. But says he'll keep working hard to raise the best crop he can.