ajtj99's Market Pulse

[jdaasoc]

I was going to comment on corn, ethanol and probably effect on food prices after an extended trip through PA, MD and VA.
Corn plantings are up 19% to 95 M acres. This comes at an expense of other crops like soybeans.

The extra acreage seems to be just sprouting up everywhere. All I saw along my journey was corn fields some planted fairly recently since they weren't as high as they should have been for early July.

It seems that eastern section of Gettysburg National Part where the calvary's under Custer and Stonewall Jackson fought were being leased out to a local farmer who was growing corn. I talked to the farmer who was working on one of his tractors at the end of the day after visiting the battlefields while on vacation. He seems pretty happy about his crops growth and the current prices for corn.

OT South didn't stand a chance looking down from Little Big Top but I was amazed at number of Gettysburg baseball hats with stars and bars on the back of them that I saw like if July 2nd was some sort of day of infamy for the South to be remebered.

I checked at usda.gov NASS web site for more specific details on the ag economy.
I found that the productivity increase in bushels per acre of corn has been averaging about 1.7% for several decades. This is mainly due to seed selection.

The majority of all corn is grown in eastern midwest states like IL, IA and MN which have predictable and ample rainfall so you will not have to worry much about crop failures unless some new pest comes along that the genetically engineered seed corn can't cope with.

Also, they documented the reduction in other grains like soybeans plantings as corn increases so it not like overall farm acreage is going up dramatically.

Another readily observed fact is the major reduction in corn stockpiles on-site on the farm and off-site storage as the price has gone up to $3.8 per bushel. The curent corn production of 95 M acres seems to be ample to meet both the 10% ethanol in fuel requirement needs as well as animal nutrition needs.


I don't think the small rise in farm productivity and better price for corn vs other grains not being planted without more acreage under cultivation will make a big difference of agriculture on our GDP or our balance of trade position.

Only observable effect I see is the competition for corn between ethanol production and for food production.

This link talks about having to add starch or forage to dairy cows diet if one depends on corn silage (distillers grain) vs corn grain.
http://www.minnesotafarmguide.com/articles/2007/07/02/ag_news/regional_news/local10.txt

Corn grain is 70% starch 8 n% protein vs 30% protein and 9% start after fermentation. ALso, they said cows don't like sharp changes in their diets so the adage about contented cows must be true.


I guess falling home building and home prices will stiff be biggest effect on gdp and consumer confidence unless one can convince millions of people to plant a lot of corn in their backyards <g>.