Corn prices approach record high as farmers prepare for planting
As farmers prepare their seeders for another planting season, a near-record surge in corn prices is something they'll need to consider.
Monday, corn futures hit $8 a bushel, their highest price since July 2012, according to Trading Economics.
While that's good news for farmers, DaNita Murray, executive director of the South Dakota Corn Growers Association, said it means consumers can probably expect to spend more at the grocery store.
“I’ll be honest and say it’s reasonable to assume that higher grain prices will eventually lead to higher prices at the grocery store," Murray said.
Murray stipulated that some products, like corn-based cereals, only use marginal amounts of the commodity, meaning there might be other causes behind rising food prices.
"There are a lot of other factors that affect the price of food. For instance, a bowl of Corn Flakes has only pennies worth of corn in an 18-ounce box. Other factors include labor, other ingredients, fuel/energy, packaging, advertising, etc.," Murray said.
What is pushing corn prices higher?
As for why corn prices are approaching record levels, the Russia-Ukraine war, inflation and China's recent corn buys are among the primary drivers of the increase, Murray said.
Depending on how much a producer has stockpiled, the higher corn prices can mean a nice return at market.
"I’d say that if I have corn to sell — more profit. If I don’t, not as clear cut," Murray said.
On the other hand, she said, higher costs for seeds, fuels, pesticides and fertilizers could undercut what would be higher profits resulting from the higher corn prices.
Jim Ketelhut, a farmer based in south-central South Dakota, said farms generally have less than a quarter of their corn harvest remaining around this time, limiting potential profits.
While the near cessation of Ukrainian grain and corn exports continues amid the Russian invasion, Ketelhut says he will "try to maximize profits" when it's possible, but he doesn't think market pressures will force him to change his planting and harvest habits.
Murray added that, on the verge of a new planting season, weather will become a more relevant determinant for success. The ground is still too cold for planting, and some producers have another two weeks or so before they will begin.
"I checked with my brother and his prevent plant date is May 25, so he’ll have until right around then to decide whether the weather has cooperated enough," Murray said.