Dairy Herd Management wrote in April that one of the "silver linings" of the current dairy recession is that corn prices seem tethered to the $3-to-$4 mark. While $3-to-$4 corn is no bargain, it is better than the $7-plus prices that we saw a year ago.
But by mid-June, when the nearby corn futures reached $4.25 and appeared to be heading up, one wondered if the gods had somehow conspired to create a situation where there would be both high feed costs and low milk prices.
Since then, corn prices have dropped significantly and one expert thinks that by October the nearby futures price on the Chicago Mercantile Exchange could be $3. A lot of it stems from USDA's June 30 "acreage" report, says market analyst Joel Karlin, of Western Milling in Goshen, Calif. That report showed 2 million more corn acres actually planted than what farmers said they would plant in USDA's March 31 "prospective plantings" report.
Of course, weather can always be an issue. Yet, there is no indication that weather problems will occur. According to USDA's "Crop Progress" report on Monday, 71 percent of the corn in the top 18 corn-producing states is either in "good" or "excellent" condition. Even in Illinois, where planting was delayed because of wet conditions this spring, 60 percent of the corn is "good" or "excellent."