Corn Prices

grayentropyApril 1, 2007

Went to Rogers in Millbury, MA yesterday for corn meal. I was quoted $11.50/50 lb cracked corn and $8.50/50 lb corn meal (not CGM). They mentioned how the ethanol boom has caused corn price inflation. I thought it was curious that the corn meal was so much cheaper. None the less I bought all the corn meal they had. The corn meal was harder to spread but it was nice and fine and should incorporate into the soil quickly (especially since this week it will rain 3-4 days).

I have two other suppliers for cracked corn and will call around to see what their prices are. I paid $8/50 lbs last year for it.

Anyone else seeing dramatic increases in corn costs? Any idea why corn meal would be so much cheaper than cracked corn? Are soybean and alfalfa meals being impacted (I plan on using them this fall).


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I also buy from Roger's in Millbury and don't know of another place locally to get the organic products I need. However, if you come across a place, Grayentropy, please post it here. I have had a few occasions when I had Roger's order something for me only to come back on the day the product was supposed to come in and it didn't. For whatever reason, they said their supplier didn't have it in stock.

Anyway, I don't know why cracked corn and cornmeal would not both be affected the same way price-wise due to the ethanol. I had heard recently that all corn products would be more costly because of it. Is it possible that they already had that cornmeal sitting around and they got it at the lower cost before the prices went up, and that if you were to order again from them, the price of the CM would be the same as the cracked corn?

    Bookmark   April 2, 2007 at 6:19PM
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Nature there is an Agway in Northboro and a Koopmans in Grafton . They usually carry cracked corn, corn meal and alfalfa meal (in the form of rabbit food). Agway claims that they can order soybean. I haven't asked Koopmans about the availability of soy bean. I ordered soybean from Rogers last year (minus 1 bag that was missing from the shipment?!).

The cornmeal could have been old. I was told that they could order it for me for $8.50/50 lbs. I believe Agway was quoting a similar price last year. I'm going to call around before my next order in May. I'll let you know who quotes lowest, if you don't beat me to it.

Good luck and let me know if you find any other places. I was surprised to learn that Koopmans sold grain and am interested if other hardware/garden stores in the area do so as well.

I like Rogers best, as I favor supporting small owner run local businesses. Roger (the owner) loaded my car for me.

    Bookmark   April 2, 2007 at 8:47PM
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Thanks for the info, Gray. I've never seen these items at the Koopmans down the street from me, but I'll have to check again. I'll go to Grafton though, if they have it. I like to deal with Roger's too, but they have let me down in a few cases. I don't like to wait for something to come in and then when I call to see if it came in as planned, they tell me either they couldn't get it after all, or they called me and I didn't pick it up so they gave it to somebody else. And they didn't call me!!

I'll let you know what I learn in my travels to find more corn products, Gray. Thanks again.

    Bookmark   April 3, 2007 at 8:46AM
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greenjeans_il(zone5 IL)

I've noticed an increase in CGM prices, up $3 a bag.

Could be the drastic difference in corn meal and cracked corn is because corn meal 90% of the time is used for food processes. So like it was mentioned it got old and expired for use in food and became feed. Just a guess.

    Bookmark   April 3, 2007 at 8:59AM
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+ $3! Ouch. Soybean cost me 11.50/50 lb last year. Apparently the increase in corn demand for ethanol production is negatively impacting soybean meal supply as more growers switch from soybean to corn.
Higher prices lead farmers to increase corn production

I don't think Alfalfa meal supply is impacted by the EtOH boom. If this grain price jumps $3/50 lb I think we may be seeing unjustified price gouging just like we do for gas.
Alfalfa may become my next favorite feed.

I should talk to my neighbor who co-owns a dog/cat food distribution facility. He sometimes brings over damaged bags of dried cat foods. If the cats don't like it, it goes on the lawn and in the compost bin.

    Bookmark   April 3, 2007 at 9:26PM
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deerslayer(Z5 NE IL KBG)

Below is an interesting snippet from MSN Investing. As corn prices increase, other grain prices will increase because of substitution and reduction in acreage. That's great news for farmers but not so good for consumers.


Check this out: Last week, the federal government reported that U.S. farmers intend to plant 90.5 million acres of corn this spring, which is the greatest amount of corn acreage since 95.5 million acres were planted in 1944. That's a 15% increase over the 2006 acreage of 78.3 million. Although every farm state has indicated it will grow more corn, the biggest boost will occur in the Southeast, where growers will switch from cotton. Elsewhere, farmers will switch tens of thousands of acres over from wheat and soybeans.

The driver for the corn frenzy is a huge boost in government support for the production of ethanol, a fuel that can take the place of gasoline in many cars. The Renewable Fuels Association pegs current annual U.S. ethanol production at 5.6 billion gallons, but observes that an additional 6.4 billion gallons of capacity is either under construction or in development.

Now here is where the numbers get interesting. Bank of America analysts figure ethanol production will jump to 10 billion gallons per year in 2010, or double the level of 2006. The analysts believe that increase would require the production of an additional 2.25 billion bushels of corn per year, or about 21% of the entire 2006 harvest of 10.5 billion bushels.

The production of corn currently outstrips the added demand. But Bank of America analysts figure that the supply-demand balance will shift over the next year, pushing corn prices up by $1.50 or more by 2008 from their current perch at $3.54 per bushel. That would put prices well above the record levels of $4 per bushel last seen in 1995.

Since most of you are not corn futures traders, the reason you should care is that every $1.50 increase in prices adds around $405,000 in annual income to a typical 2,000-acre farm, according to analysts. It would mean a real secular change to the farm belt, allowing farmers to buy more seeds, pesticides and equipment -- and lifting the value of everything from Midwestern residential property to banks and retailers.

In other words, expect the new Corn Industrial Complex to become a major nexus of investment and of success in the Midwest at a time when the manufacturing economy is disappearing and even technology is faltering. It's morning in Des Moines, investors.

    Bookmark   April 5, 2007 at 2:19PM
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In options I have to look at selling volatility with WU vol sitting at a steep 36.25% with only 39 DTE. Corn vol is sitting at 32.25% and bean vol is at 28.75% all in Sep. The smart money in the trade is now looking to get short both volatility and option skews with calls the obvious leader following the recent moves. Look for commercials to protect cash ownership by buying puts and selling calls this week. Take advantage of this early in the week looking for a late week payoff.

Here is a link that might be useful: Grain Commodities

    Bookmark   July 21, 2010 at 3:38AM
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