US – Some Georgia corn growers won’t cover costs this year if harvest yields meet US Department of Agriculture expectations.
High corn supplies could leave growers facing $3.50 to $4 corn, a University of Georgia economist has warned.
According to Nathan Smith, the department of agricultural and environmental sciences, this is not enough for many farms to cover production costs.
Such a ‘bleak’ outlook could reduce state corn plantings for the coming year, already down to 325,000 acres below a long term state average of 350,000.
“Without land rent, if you want to break even on total costs at 200 bushels, we’re looking at $4.60 a bushel.” warned Mr Smith.
“I think next year we’re looking more at corn farmers just trying to survive.”
Partly behind expectations being so strong is a resurgence of corn in the Midwest, following a rise in confidence after the 2012 drought.
This has ‘flooded a saturated market’, amid a USDA recalculation of expected corn yield of 172 million bushels, taking forecasts to 14.032 million bushels for 2014-15.
Meanwhile, Mr Smith added that the most likely good news would come in the form of a major demand increase from the ethanol sector or the Chinese.