Surging corn prices trigger spate of sales from US farmers

Green Plains

16/01/2025 11:00

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      Farmers sell crops after corn futures hit one-year high
    

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      USDA sparks rally by slashing US harvest estimate
    

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      Grain growers still face difficult economics for 2025
    

  
    By P.J. Huffstutter and Heather Schlitz
       CHICAGO, Jan 16 (Reuters) - Iowa farmer Caleb Hamer
grabbed his phone and dialed a local corn buyer this week, eager
to sell his grain as prices climbed to their highest level in
more than a year.
    Farmers across the Midwest have boosted crop sales as corn
 Cv1  and soybean  Sv1  futures spiked after the U.S. Department
of Agriculture slashed its 2024 harvest estimates on Friday,
grain dealers in Iowa, Illinois, Indiana and Nebraska said. Corn
prices are now up about 10% over the past month.
    The surge came after prices hit 2020 lows last year due to
oversupply, which eroded farmers' incomes and hit the rural
economy hard.
    The rally still hasn't made U.S. crop production
particularly profitable, though, as prices remain relatively low
and the year ahead looks tough. Growers face rising bills for
seeds, chemicals and land rents ahead of the spring planting
season, and some economists say the farm sector has entered a
recession. 
    "You've got to lock in some sales to guarantee revenue,"
Hamer said.  
    Some growers are also concerned about economic pain if
President-elect Donald Trump follows through on plans to slap
tariffs on goods from China and Mexico, raising risks for
retaliation which could hit U.S. agricultural exports.
    Another U.S.-China trade war would come at a difficult time
for farmers, who have seen net income drop nearly 23% since
2022.
    In Illinois, the biggest soybean-producing state and
second-largest corn producer, economics for growing both crops
remain poor for the third consecutive year, University of
Illinois economists said on Tuesday.
    "While the rally has improved sales opportunities, it won't
erase this year's steep losses and does not fundamentally change
the bleak profitability picture in row crops," said Betty
Resnick, American Farm Bureau Federation economist.
    Ben Scholl, president of specialty grain buyer Lewis B.
Osterbur & Associates, said he handled about 20% of his normal
annual corn sales in the past four weeks. 
    At a Green Plains  GPRE.O  ethanol plant in northern Iowa,
trucks hauling farmers' corn idled along the frozen roads,
waiting to unload. 
    Iowa-based Landus, one of the largest U.S. grain
cooperatives, on Monday will urge farmer customers to sell, CEO
Matt Carstens said.
    "We're looking at tariffs and the loss of the China market,"
Carstens said. "Right now, you just don't know what the demand
side is going to look like this year."
    In Ohio, farmer Chris Gibbs gasped when Cargill staff texted
him an offer on Tuesday: $5 per bushel cash for corn for
delivery immediately or after April 15.
    Local buyers last fall were offering about $4.30, well below
his cost of production, Gibbs said. After selling some corn this
week, he will have an extra $7,000 in his pocket, enough to
cover half his springtime fertilizer bill.
    "I have enough cash to feel a little bit of relief," Gibbs
said.

 (Reporting By P.J. Huffstutter and Heather Schlitz in Chicago;
additional reporting by Julie Ingwersen in Chicago; editing by
Tom Polansek and Diane Craft)
 ((pj.huffstutter@thomsonreuters.com; 313-484-5275 (w); On X @ https://twitter.com/pjhuffstutter
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