Short Crop Could Mean Premium Opportunities
August 10, 2012 by Chuck Hill, CCA
The effects of the 2012 drought means food corn processors will be expanding their draw areas to find the corn they need for their buyers. Generally these processors have the corn they need contracted prior to planting with local growers. Many of them have an approved variety list as well.
Several buyers have indicated they will be looking for corn this fall and winter. They know their contracted corn will be short. Their first preference will be hybrids that they have on their approved list. I expect they will temporarily expand the list of hybrids they buy so they can meet their needs. This means other hard or medium hard texture hybrids probably will be accepted. If supplies are very short they may even take some medium texture hybrids that are high quality. They will have to look for corn beyond where they normally buy.
What does this mean for growers who haven’t contracted with these processors? It will be an opportunity to add a premium to the price of your grain. Even though prices will probably be high, an extra premium on top of that will help offset lower yields. What action do you need to take at this time? The first thing to do is to make a plan to identity preserve any corn you can on your farm. Keeping hybrids separate in bins or mixing them by kernel texture will give you the flexibility to capture premiums later. If you have conventional corn hybrids keep them separate from traited hybrids as non-gmo corn will be needed.
When harvest is completed let your Corn Specialist or me know what you have in your bins. I receive calls from buyers every year looking for corn. This year they have already been calling and I expect that to increase. Please keep in mind the premium opportunities may take a while to develop as buyers will take their contracted corn first. If you like the cash price for corn don’t wait on a premium that may or may not be there. Go ahead and sell. If you have questions concerning what hybrids may be good for this or any other questions please feel free to contact me.