Stockbrokers await the day the market tops 14,000 again. Oil companies raked in profits when gas exceeded $3 a gallon.

In agriculture, grain farmers usually hope for $5-a-bushel corn and $12-a-bushel soybeans. But this year, farmers are living the dream. Corn futures reached a 12-year high of $5.12 on Monday and soybean futures hit a record $13.41 the same day.

Grain experts speaking at the Fort Wayne Farm Show this week said it is possible prices could soar even higher. Corn futures could reach $5.75 or even $6 a bushel, Purdue University Agricultural Economist Chris Hurt said Wednesday.

The possibility has Clint Zeedyk, a farmer from Defiance County, Ohio, checking futures prices on his cell phone three times a day. If he sold all his grain now, Zeedyk said this would be his most profitable year farming. But he also doesn’t want to miss out on the chance to capture even higher prices, particularly when land, fertilizer and other expenses are rising.

“You want to maximize your income,” he said.

More than 200 farmers packed Memorial Coliseum’s ballroom Tuesday and Wednesday to hear price predictions. Corn could hit $6 a bushel, and soybeans could see $14 by March, said Jon Cavanaugh, marketing director for Central States Enterprises Inc., which operates a grain elevator in New Haven. Prices would probably climb even higher if a weather problem threatened the grain supply, he said.

“These are phenomenally high prices,” Cavanaugh said, “and we have the courage to sit here and say it’s not over yet.”

Strong demand keeps boosting grain prices. As newly constructed ethanol plants come online, they need corn to produce alternative fuels. By late next year, 11 ethanol plants statewide are expected to consume 31 percent of the state’s corn crop, Hurt said. Just two years ago, the state had only one ethanol plant, which consumed the equivalent of 4 percent of this year’s crop.

Grain exports also are rising. As income rises in China and other nations, Hurt said people are buying more meat. Overseas farmers are importing additional grain to feed their livestock. The weakened dollar is encouraging them to buy American grain, he said.

U.S. farmers planted the largest corn crop since World War II last year, but there isn’t enough farmland to keep up with grain demand, said David Kohli, a commodity analyst for Ford & Young Futures in Fort Wayne. A U.S. Department of Agriculture report released Friday showed corn supplies were smaller than previously expected.

Soybean supplies could be exhausted in six weeks if demand stays strong, Hurt said. The grain supply is expected to be even tighter next year, which could lead to another embargo. In 1973, soybean exports were halted because of the small supply.

With high prices, the market is encouraging farmers to produce as much as possible to avert a future shortage, Hurt said.

“The futures market is clearly saying, … this thing is not going to go away,” he said.

SOURCE: By Jenni Glenn, The Journal Gazette

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