Corn, getting out of the trap

Donald Fletcher

For several years farmers in Ontario have found corn prices too low to cover costs... this corn being the commodity not sweet corn.

Right now corn prices have moved above USA price support levels, leaving the potential that even Canadian farmers can finally get rich producing corn,

Yes, at current prices it would appear one could get rich by producing corn to feed that insatiable demand for ethanol. And Canadian farmers are fully aware of this opportunity. Next spring the number of hectares of land planted in corn, both in Canada and in the USA will go 'hog wild'.

What will such a big shift away from other crops do to their prices?
Put that way this binge of corn production sounds like a gold mine for farms producing almost any annual crop. Because the demand for corn is so brisk we can anticipate that even food for cattle will be in short supply unless production of corn greatly overshoots even that brisk demand.

We will know more about that by mid-May when most corn land will have been planted. That will be too late for most farmers to change course if it appears that corn will be in short or over supply. but if it is a short supply, we can anticipate that many will be out planting corn, late, to take advantage of that shortfall.

However, corn will swing to oversupply shortly if it remains highly profitable for a while. Lands that have been left out of cropping will be brought into the rotation, and corn will be grown year after year as long as it pays. It will go right on paying as long as demand for ethanol is open ended.

This opens up a big niche for anyone who wants to produce food for people instead of motor fuel. This could be the opportunity farmers have been waiting for to switch to producing a wide variety of crops rather than stay as mere cogs in a corn economy.

US farmers may want to stay with corn because it has strong price supports, but Canadian farmers have no such incentive, and would do well to get ready to supply Canada and the USA with organic produce. We should use the current corn prices, not to encourage farmers to go make more, but to diversify,