EC Nebraska | McHusker - 1/10/2014 16:35
Lets say it the way it is. Anyone not happy after today is el pollo loco, and "IF" corn went to $3 the number of guys going broke would be astronomical. Only the people with a fair amount of owned ground would make it, it would be a disaster. The articles about $2.75 corn are ridiculous and are put out by people with zero understanding of input costs. The market doesn't owe you a profit? Whatever, send it to $3 and tempt fate. someone opined to me today(hi jeff) that this report is "stability" going forward and that is the truth.
The market doesn't owe you a profit, but it does owe the average cost producer his variable costs. Cause, if the average producer can't cover variable costs, he isn't gonna plant enough. I don't know where the average variable COP is, but I'd guess it's not far below $3. I don't think corn can spend much time below $2.50 going forward, unless input costs drop dramatically.
Of course, I'm not looking forward to a year of $3-3.50 corn either but there's no fundamental reason it couldn't happen. |