A report from Kevin Kerr…on “aquaculture” in Iowa, and why corn is so high. Unnecessary background – the Associated Press reports that Iowa has 2 million acres of soybeans and 1.3 million acres of corn under water…16 % of the state’s tillable land:
“There is little chance of farmers switching now to soybeans as seed and fertilizer are not ‘readily available’ and they would cost a fortune even if it could be obtained,” Kevin tells us.
“Even more of a problem is that June 10th is really the cutoff for soybeans to get in the ground. Why?
“Well soybeans thrive off daylight, (they are diurnal). It is simple math really, the soybean plants need so many days of sunlight to mature and ‘pod’ by a certain date. The pod stage is critical, and if it fails…so does the crop.
“I think many farmers will simply opt for ‘Plan B’ and call it a year. That means taking the government insurance money; if they try and plant something else they won’t get that money, and the crop may fail anyway.
“At the end of the day I think 2009 will see surging dairy, cattle, hog and produce prices. Key grains will also be in high demand, but I am leery of corn at these levels and also feel a major shift form corn based ethanol to sugar based ethanol is coming. The next administration will need a scapegoat…and corn and ‘wealthy farmers’ will be it.”
Markets and Money