We could see $3 corn later this year, or maybe $5 to $6 corn — it all depends on the size of the U.S. corn crop, says Bruce Babcock, director of the Center for Agricultural and Rural Development at Iowa State University.

If we get a bumper crop, corn could be $3 per bushel, he told those attending the recent National Dairy Leaders Conference. If we get a short crop, it could be $5 to $6, he added.

It's too early to tell where this year's corn crop will fall on that continuum. Things are running ahead of schedule in Iowa, the nation's No. 1 corn state last year. As of May 10, according to USDA's Crop Progress report, 81 percent of the state's corn had been planted — up considerably from the 42-percent figure posted this time a year ago, and up from the five-year average of 76 percent. Iowa is also running well ahead of last year in terms of the percentage of corn emerged — 24 percent vs. 2 percent. But the story is different in Illinois, which often vies with Iowa for the No. 1 ranking. Because of unfavorably wet conditions, only 10 percent of Illinois' corn had been planted by May 10 and only 3 percent had emerged. Emerson Natziger, crop specialist at the University of Illinois, acknowledges it is a serious situation, but says one never knows for certain until the growing season is over. Last year, he says, farmers in Illinois were able to overcome a late planting season with almost ideal weather in June through September.

With margins so tight in the dairy industry today, everyone will be watching the Crop Progress reports with interest.

The price of corn today is similar to what it was two years ago, Babcock points out. Yet, tumbling milk prices have put it in a whole new perspective.

"If dairy prices are high, who cares about high feed cost if they can buy the feed, so it's really about the margins (between milk price and feed cost)," he said.

Livestock producers have really taken it for granted over the years that feed costs would be cheap, he said. And, that has certainly been the trend since the mid-1970s — thanks, in large part, to productivity gains in crop yields.

Ethanol has changed the equation, now diverting about 30 to 35 percent of the corn crop to fuel production. No one knows at this point whether the corn-based ethanol market will go boom or bust.

Everyone needs to keep an eye on what's happening in California. The state is poised to adopt rules that would disallow the use of corn-based ethanol in meeting carbon-emission standards. Other states may follow suit, Babcock pointed out. For more information on that development, click here.