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Record Corn Revenue Next Year?

November 3, 2010
 
 

“I locked in all my 2011 fertilizer needs in August,” says Jerry Gulke of the Gulke Group, who farms in Illinois and North Dakota. “The cost has risen about $32/acre since then. Meanwhile, given the corn price boost means promised revenue is up $160/acre. I could easily see record revenue next year. I’ll take a 4-to-1 increase like that any time.

“However, producers?myself included?will be challenged to lock in profits; we have no idea how high prices might go, leading to high cash-flow risk on hedges,” he adds. “What if we have to meet $2/bu. margin calls? For some growers that’s $400/acre. Not all banks can carry producers for that much.”

Listen to Gulke's Audio Analysis.


 

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