Farmers hope to take advantage of high demand, low supplies
Many farmers in the U.S. Midwest are seeding their corn crops early, betting on the warmest March on record against the odds of a potential damaging late-spring frost, according to reports.
The early-planted corn, which some analysts say could be a record crop, may miss the peak summer heat in July and result in an extra 60 cents per bushel in September, say the growers, who are banking on high demand and low stocks to place a premium on end-of-summer deliveries. The possible setbacks of early planting include forsaking certain types of crop insurance and the unpredictability of the weather. ”It’s going in good but we have fear that it might come too quick and a frost will come and kill it,” said Ethan Cox, an Illinois corn farmer.
Farmers are hoping to get a premium for their early crops before the height of the harvest. Tight supplies in summer 2011 pushed cash corn prices to record highs across the region as grain buyers rushed for the grain to supply the first purchases of U.S. corn by China in four years. Increasing demand from ethanol refineries, which now use 40 percent of the domestic crop, also has increased demand. “This early planting means harvest will likely be early as well,” said Karl Setzer, analyst at MaxYield Cooperative. “A result of this will be the ability to pick up the (price) increase in the market between old and new crop. In many cases this will add $1.50 of revenue to a bushel of corn.”