Wet spring could be reflected in corn prices-WEB ONLY

Like farmers across the eastern Corn Belt, Borgsmiller has not even started
planting thanks to a wet spring. He’s stuck waiting for a rain-free window long
enough to dry out his land near Murphysboro – about 90 miles southeast of St.
Louis – and to make cranking up his multi-ton planting equipment worthwhile.

“We’ve got a 50-percent chance of rain tonight and tomorrow,” Borgsmiller
shrugged yesterday, hoping he might get some planting in next week.

Farmers from eastern Missouri across Illinois and Indiana and into Ohio are
telling similar stories, which have economists and investors starting to expect
a curtailed crop. The result could be higher corn prices that could eventually
be reflected on grocery store shelves.

The wet spring has slowed planting across a region that accounts for
somewhere between a quarter and a third of the country’s corn crop. In Illinois,
10 percent of the expected crop has been planted at a time when more than 80
percent typically would be in the ground, according to the U.S. Department of
Agriculture.

Indiana has 11 percent of the crop planted rather than the usual 70 percent;
Missouri’s statewide figure is 39 percent, compared to what would typically be
75. Ohio farmers have planted just less than a quarter of their corn rather than
the usual two-thirds by early May.

Planting delays can cut production because crops aren’t mature enough to
benefit from the early July heat they need to grow. Prices can rise as a
result.

Corn futures prices have been increasing since wet weather set in late April,
running up to about $4.50 a bushel Tuesday on the Chicago Board of Trade, an
increase of more than 10 percent.

While that’s good news for corn farmers who get their crops in the ground
soon, it could also mean consumer price increases similar to those that rippled
through the food chain last year, said Bruce Babcock, an agricultural economist
at Iowa State University.

Last year, it was high oil prices driving demand for ethanol that contributed
to higher corn prices – over $7 a bushel, a previously unheard of level. That in
turn drove up the cost of food products that rely on corn, as well as animal
feed, which fueled higher dairy and meat prices.

“Yes, we could see another price spike,” Babcock said. “We don’t have oil at
$140 a barrel, so maybe not to the extent as last year, but we are seeing a big
rally.”

Farmers in some Corn Belt states, like Iowa and Minnesota, have seen a
near-perfect planting season, Babcock said, and are almost finished with corn
planting. But from southwestern Illinois, where Borgsmiller farms, across the
eastern Corn Belt, wet weather has been the rule this spring.

“Just these fronts coming through dropping rain often enough so it never gets
very dried up between times,” said Emerson Nafziger, a University of Illinois
crop expert.

By mid-May, Nafziger said, farmers are impatient and fight the temptation to
head into muddy fields too early. Corn planted in those conditions isn’t
typically as strong or productive as it should be.

In the Indiana city of Thorntown, about 35 miles northwest of Indianapolis, Donnie Lawson
said yesterday that he and his brother, Danny, had just started planting the
roughly 1,100 acres of corn they plan this spring.

“We usually are pretty much wrapping it up in this time period,” the
46-year-old said. “If we could get good weather, probably another seven to 10
days and we could be done. But they’re talking rain tomorrow, so…”

Prices may be rising in anticipation of farmers like Lawson having a bad
year, but he said that’s not something he spends a lot of time worrying
about.