-May 6,2020-
Farmers feeling the pain this Spring of an abundance of corn in storage are expected to do what comes naturally. Plant a whole lot more this year.
The USDA says farmers indicated they intend to plant 96.99 million acres of corn in 2020, up 7.29 million acres, or 8%, from 2019. If realized, it would be the second largest corn planted area on record after 97.291 million acres in 2012.
US carryover may top 4 billion bushels in 2021, and corn futures are hovering near $3 a bushel after nearing the $4 a bushel level just a few months ago.
The trade war clobbered corn exports and now the virus has crippled fuel demand and corn based ethanol with it. We are using about half as much ethanol as we did this time last year and that does little to suck up the corn surplus.
The US livestock and dairy industries who use corn for feed have their own demand problems. One ag news source quoted a Midwest feedlot owner.
“Pretty soon, we [may not] have enough working capital to feed the cattle anymore and the bank won’t take that risk,” says Jeff Pruess, a Clarence, Iowa, feedyard operator. “They will not lend you the money.”
Corn futures contracts are $3 on the board and ethanol plants are sitting idle across the Corn Belt.”
Low prices for corn have fallen below $3 in Iowa says Senator Chuck Grassley. Senate Finance Committee Chairman Chuck Grassley, R-Iowa, recently said that the price for corn at his local elevators has fallen to $2.72 per bushel, and an aide later released charts showing that the corn price has fallen to $2.65 in Shell Rock and $2.57 in New Hartford.
Grassley says the price level reminds of the farm crisis in the 1980s.He is seeking more help from Washington to keep farmers afloat.
That is what happened for several years after President Trump’s trade war with China and other export partners.
In the middle of all this pain Mr Trump appeared to call for new tariffs at a rally a few days ago.
A press report recently said “Trump on Sunday night said he will “terminate” the “phase one” deal with China if Beijing fails to buy an additional $200 billion worth of U.S. goods and services over the next two years as promised, our Pro Trade friends tell MA. During a town hall on Fox News, Trump danced around a question from a food products business owner about whether he would consider reducing or eliminating the tariffs on $350 billion worth of Chinese goods. “We’re looking at a lot of things, but you have to remember I’ve taken those tariffs and given a lot of them to the farmers,” Trump said, referring to slightly more than $23 billion in direct payments USDA has made to farmers amid the trade war.”