Corn growers anxious as rain delays planting

Illinois corn growers are anxious these days — both the good, excited kind of anxiety and the worried type.

While many sectors of the U.S. economy are struggling to recover from the Great Recession, farming has fared well. Income for farmers has soared recently and is forecast to rise nearly 20 percent on average this year nationwide.

And for corn farmers, in particular, commodity prices have continued to rise, having more than doubled in the past year and hitting an all-time high in April. Some Illinois corn growers are viewing their 2011 crop as one of the best income opportunities in their lifetimes.

"On an aggregate level, income could break records this year," said David DeGennaro, a legislative analyst with the Environmental Working Group. "It's a very good time in farm country right now."

Yet anxiety down on the farm stems from the casino-like choice of guessing when to jump in and sell the anticipated 2011 corn crop, without leaving money on the table. Farmers across Illinois are asking themselves, "How much of the upcoming harvest should I contract to sell and at what price?" Some corn farmers are already regretting sales they made at prices lower than today's.

Meanwhile, any glee provided by higher corn prices is dampened as growers see profits, healthy as they are, eroded by soaring oil prices, which jack up their costs for tractor diesel fuel and fertilizer.

"Farmers are optimistic on how things look for the next two or three years, but they're not joyous because they see what's happening on the cost side," said Rodney Weinzierl, executive director of the Illinois Corn Growers Association.

And then there's the rain.

By this time last year, the corn crop in Illinois was planted, well ahead of schedule. This year, very little is in the ground, as farmers wait for their fields to dry enough for planting. If fields don't dry out by about May 10, farmers say, corn yields throughout Illinois will suffer. However, for many, risk is mitigated by subsidies from the federal government and taxpayer-subsidized crop insurance that pays off when yields are unusually low.

All told, it's a complicated calculus of factors, and a dichotomy of emotions, that has corn farmers in Illinois and across the Midwest wringing their hands with hopeful anticipation and drumming their fingers as they wait out the rain.

"It's a time of great opportunity, but I know these can be fleeting," said Paul Taylor, 59, a DeKalbCounty farmer. "I've had maybe three of these in my lifetime."

Taylor said he will use the majority of his 1,000 acres this year to plant corn and has contracted to sell about 30 percent of his crop.

Illinois is the nation's No. 2 grower of corn, next to Iowa, and the No. 1 exporter of it, thanks to robust waterways and rail systems. So, it's good news for Illinois that futures prices for corn, the country's top crop, have been soaring, recently surpassing $7.50 a bushel. Prices have been pushed higher by increased demand worldwide and decreased stockpiles.

While corn pervades many consumer products, from corn flakes to corn syrup to corn-fed chicken, pork and beef, its price fluctuations aren't proportional at the supermarket. That's because the largest cost for many food products isn't the raw ingredients, but the processing, distribution and marketing costs.

If corn prices double, the price on a box of corn flakes might rise 4 cents, Weinzierl said.

Corn also has nonfood uses. A huge portion, more than one-third of U.S. production, goes to making the gasoline-additive ethanol, and it's an ingredient in building materials and pharmaceuticals.

All that demand for corn is good news for growers. The top five earnings years for the past three decades have occurred since 2004, according to inflation-adjusted numbers from the U.S. Department of Agriculture.

Net farm income for 2011 is forecast to be $94.7 billion, up 19.8 percent from the 2010 forecast, according to the USDA. That's the second-highest inflation-adjusted value for farm income recorded in the past 35 years.

Still, it's not like most farmers are living high on the hog. Average net income for individual farms is projected this year to be $80,400.

Factored into those earnings projections are higher costs. The USDA forecasts price increases for fuels and fertilizer at 16 and 14 percent, respectively. Expenses are also expected to rise for pesticide, up 7 percent, and seed, up 5 percent.

(Source: http://www.chicagotribune.com/business/ct-biz-0501-corn-prices-20110430,0,5212923.story)