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Dry Weather Likely to Boost Corn Acres

February 4, 2012
By: Sara Schafer, Farm Journal Media Business and Crops Editor
Many areas of the country saw an extremely dry fall and the lack of rain has continued into the winter. Jerry Gulke, president of the Gulke Group, says he has clients from South Dakota and Minnesota who say they can’t remember it being this dry.
 
With all of the prevented planted acres due to the intense rains in many parts of the Corn Belt last year, Gulke says we have a potential of 9 million acres to go into production this year that weren’t in production last year.
 
"That is barring a big rain at springtime, but as dry as it is now, we can handle a lot of water."
 
So, where will these acres go?
 
"We think a lot of them will go to corn," he says. "If the weather is average, we have the opportunity to solve our undersupply and the prospect of running out of grain next year or the following year."
 

Implications for Prices

Gulke says this situation is causing a lot of downside risk. "I think the market will probably chop sideways, because there are so many uncertainties out there."
 
The bright side, he says, is that the low end of where a lot of people think prices may go is still at a level he wished for 10 years ago. "The new lows will be the old highs."
 
Markets don’t go up forever and they don’t go down forever, he says. "Now we’re in one of those bumble phases until we know more."
 
Listen in as Gulke provides his market outlook during the 2012 Top Producer Seminar.
 

 
 
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See all of the news, photos, videos and more from the 2012 Top Producer Seminar in Chicago, Ill.

 


 

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COMMENTS (5 Comments)

Pierce_County_ND - ND
Where will the seed come from? I have been looking for 80-85 day corn and multiple salesman have indicated they cannot get it dueto last years weather whiping out a good chunk of short day corn seed.​
11:43 AM Feb 6th
 
Pierce_County_ND - ND
Where will the seed come from? I have been looking for 80-85 day corn and multiple salesman have indicated they cannot get it dueto last years weather whiping out a good chunk of short day corn seed.​
11:43 AM Feb 6th
 
WhyMeJake
I don't believe they think that is a problem AGnut, that's the way they like it. Given a choice, they would like us to be be losing money raising the crop with the government making up the difference. That was the real reason for the Farm program in the first place, cheap food. The government turns a blind eye to the price gouging that farmers have to live with while the seed,chemical and equipment sectors get incredibly rich. How is it possible that nobody can sell seed corn cheaper than they do? Isn't there a chance for someone to make a killing by dropping a 100 dollars off the price of seed? Why isn't any company doing just that?

How can this happen in the USA? Is there any doubt how the rich get richer and the rest just get poorer? With nobody to stop them, they can "set" prices wherever they want. Why doesn't anyone report them in the news? Certainly the publishers of farm publications are smart enough to figure it out. Why doesn't anyone write a story? We get just over $6 a bushel. They get around 50 times that much. I challenge anyone to come up with a reasonable explanation of that price difference.
6:59 PM Feb 4th
 
Agnut - IN
Fix the under supply? What is under supply? You're saying more acres=more corn and that will lower prices. How is that a fix for anything? Everything I deal with since 1975 has gone up at least 400%. Corn should be $12.00 bu. minimum, just to have the same per bu. value as it relates to the general economy. How you going to fix that?
1:44 PM Feb 4th
 
Agnut - IN
Fix the under supply? What is under supply? You're saying more acres=more corn and that will lower prices. How is that a fix for anything? Everything I deal with since 1975 has gone up at least 400%. Corn should be $12.00 bu. minimum, just to have the same per bu. value as it relates to the general economy. How you going to fix that?
1:44 PM Feb 4th
 



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