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Is there money in growing corn?

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Michael Price
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PostPosted: Tue Dec 26, 2006 8:28 pm    Post subject: Is there money in growing corn? Reply to specific post Reply with quote

I keep seeing corn prices are going up and some friends grow corn and they were making some money this year. Would it be worth growing about 10 acres of corn and finding a cheap combine? I probably cant do it this coming year but the next year I could. I would rent this feild so it would be cheaper then owning it since taxes are so high.

 
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IaGary
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PostPosted: Wed Dec 27, 2006 4:08 am    Post subject: Re: Is there money in growing corn? Reply to specific post Reply with quote

Michael

Right now there is money in corn.

But that doesn't mean there will be next year.

For ten acres I would hire a combine.

Would cost about $275 dollars to get your 10 acres done and that won't buy many parts.

Gary

 

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Michael Price
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PostPosted: Wed Dec 27, 2006 11:56 am    Post subject: Re: Is there money in growing corn? Reply to specific post Reply with quote

I was thinking because of bio diesel that corn prices will keep going up so now would be a good time to get into it.

 
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kyhayman
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PostPosted: Wed Dec 27, 2006 4:12 pm    Post subject: Re: Is there money in growing corn? Reply to specific post Reply with quote

Price may be up, but so are costs. I priced nitrogen today, up $10 a ton from last year. Chemicals and seed will be up too. Ten acres of 150 bushel corn (which I was never able to do, 135 is the best I ever got) at $4.00 a bushel will get you $4500 gross. I dont see corn staying at even $3.00 for very long. There may be increasing demand for corn for ethanol right now. All this corn going into ethanol will yield alot of distillers grains which will begin replacing corn for livestock feed as it gets into the system (that, and $4 corn is getting beyon break even for most ethanol plants to pay). Figure in at least $150-200 an acre for seed, chemicals, and fertilizer. Gives you $2500 to pay the rent, buy the fuel, and pay your time and equipment costs/repairs. I just rented 30 acres to a neighbor for corn for '07 at $120 an acre and he buys all the fertilizer. If it costs you a hundred thats down to $1500. Add in a planter malfuntion or drought that cuts your yield by a third, and add a bumper crop that gets the price down to $3 and you didnt make wages. Cut your yield in half and its a money losing proposition.

Corn has price cycles like cattle, look for 2 great year, 2 terrible years, and 8 so so years out of every 10. With that said, so what if it costs youa few hundred. Thats cheap entertainment. If you make a couple thousand, thats great extra money. If I still had my equipment, I'd probably put out a couple hundred acres on a roll of the dice. But, thats what it all boils down to, every year farming, a roll of the dice.

 

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farmertee
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PostPosted: Wed Dec 27, 2006 5:14 pm    Post subject: Re: Is there money in growing corn? Reply to specific post Reply with quote

I also read that through 2010 that the USDA added in a Price incentive to farmers that amounts to about $1.53 a bushel that is also helping to drive up the price. I agree with KY hayman next year could be a whole different ballgame. I've been pondering switching from ear to shell just because of the price but then I would have a lot of conversion cost as well as have to find some new markets.

 
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paul
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PostPosted: Wed Dec 27, 2006 6:31 pm    Post subject: Re: Is there money in growing corn? Reply to specific post Reply with quote

Where can I sign up for that deal?????????????

--->Paul

 

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Michael Price
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PostPosted: Wed Dec 27, 2006 7:59 pm    Post subject: Re: Is there money in growing corn? Reply to specific post Reply with quote

You guys remind me of green acres when everyone was sitting around the store talking about what to plant next year. They decided to grow beans because thats what they lost the least amount of money on.

 
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paul
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PostPosted: Wed Dec 27, 2006 9:25 pm    Post subject: Re: Is there money in growing corn? Reply to specific post Reply with quote

Farming is kinda set up to make $10-20 an acre these days.

So, your 10 acres just isn't going to bring much.

You are going to have way too much machinery costs per acre, so you won't make the $10 normally.

If you aren't used to growing corn, and don't have the lime down, & don't have the fert bought now (its going to be in short supply) and you don't have yourplanter calibrated for perfect seed placement - you won't get 200 bu yields, you'll get 100 bu yields.

Have to assume your 10 acres isn't in the program, so you won't get anthing from the govt. Depending on location & corn price, that can amount to something.

Put it all together, & the extra dollar a bu available right now won't really help you too much.

Like the other person said, I remember corn brushing $5 a bu here in the late summer of the late 90s. Farm magazines said a new plateu, corn will never be below $3 again.

18 moths later, I was getting $1.68 a bu. I don't believe corn will remain at this price for more than 18 months unless we get a nation-wide drought. International markets can't keep the price that high, & too much land in Argintena, China, souther Russia, etc can grow good corn _if_ there is ecconomic insentive to invest in the roads & supplies. $4 corn for 2 years, & we will be flooded with corn.....

The title of your message kinda sounds like, corn is so easy to grow & the price is so high, any dummy can make goobs of money...... I'm sure that's not what you meant, but...... ;) If you think so, I hope you try. :) ;) Report back in 2 years. :)

Lot of farmers are getting hit with either landlords or city folk talking like that, so kinda sensitive to it......

--->Paul

 

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paul
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PostPosted: Wed Dec 27, 2006 9:35 pm    Post subject: Re: Is there money in growing corn? Reply to specific post Reply with quote

Biodiesel is an oil for diesel engines, made from soybean oil - or other oil crops, like canola/rapeseed, sunflower, etc.

Ethanol is mixed with gasoline for gasoline vehicles, made from sugary or starchy plants like mostly corn or sorgum, but potatoes, sugar beets, cane, etc. could work too (more limited growing ares in the USA for these sugary plants).

Did you mean ethanol?

A byproduct of ethnal is 17 lbs of ddg, or cattle feed from every bu of corn processed. We are going to find we have more feed than we used to, if we don't export our corn but cook it into ethanol.

Perhaps in 5 years the bio-mass enzymes will be perfected, and they will be able to ecconomically cook ethanol out of grasses, wood particles, corn stalks, etc. Then we will sit here, with allt his corn production, and no use for it.

These high prices for corn are a short-term bubble, in my opinion, and may do more harm than good to farmers. Much of it is based on speculation of what may happen 2 years from now.

That is a long, long time for farmers to react, and for ethanol demand to change.

Lot of unknowns. Could be way different than I see it. :)

--->Paul

 

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Hard Knocks
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PostPosted: Thu Dec 28, 2006 3:08 am    Post subject: Re: Is there money in growing corn? Reply to specific post Reply with quote

I'd suggest sweet corn or Indian corn.Indian corn brings from .50 to $1.00 an ear with the shuck pulled back around here in the Fall.

 
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hayray
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PostPosted: Thu Dec 28, 2006 5:24 am    Post subject: Re: Is there money in growing corn? Reply to specific post Reply with quote

Well that settles it then, I don't think I will be putting in any corn. I am worried about the high prices with my cattle, but I still can't see coming out ahead with getting a picker and then a grinder, and with my old planter I would have to hire some one with a real planter to do that. Besides, I think this ethanol thing is going to crash miserably, how can they keep producing this stuff that costs more than oil, E-85 in town is $2.85 a gallon - the goverment can't keep subsidizing this for very long, or can they?

 
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RickL
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PostPosted: Thu Dec 28, 2006 10:53 am    Post subject: Re: Is there money in growing corn? Reply to specific post Reply with quote

Once in while yes and that has to be with the govt program,otherwise yo hardly net anything. If you do you have to have land thats paid for,machinery paid for and not borrowed moeny to make it work,otherwise you just paying the bank wagesnothing hardly left for you. Been there done that,no more

 
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glennster
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PostPosted: Thu Dec 28, 2006 10:53 am    Post subject: Re: Is there money in growing corn? Reply to specific post Reply with quote

we have quite a few ethanol plants here in illinois. e-85 fuel is around 1.95 to 2.00 gallon. the powers that be are recommending increasing bin storage capacity and switching to 100% corn production. lot of the guys in the area are looking to do this. seems then, there is going to be a huge surplus next year of corn driving the price down. i'm guessing then soybeans will go way up cause nobody planted them.we are staying with 1/2 corn 1/2 soybeans, and see what happens. the ethanol plants pay a good price for corn, but trucking it there eats up a lot of profit if you have a ways to haul it.

 
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farmertee
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PostPosted: Thu Dec 28, 2006 12:03 pm    Post subject: Re: Is there money in growing corn? Reply to specific post Reply with quote

The article that I read stated that the government was giving the new ethanol plants subsidies and that is where the $1.53 a bushel added on top of the price per bushel came from. It stated that farmers (dairy) in general could not stand those feed prices. The article also went on to say that next year in 2007 thousands of acres of CRP contracts will expire and if the price of corn stays up alot of the producers would probably put the CRP ground back in production. This would in my opinion probably flood the market bringing the price crashing down. Who knows though it is just a gamble like someone else stated earlier.

 
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paul
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PostPosted: Thu Dec 28, 2006 6:29 pm    Post subject: Re: Is there money in growing corn? Reply to specific post Reply with quote

That's rather convoluted.

Ethanol plants here in MN have added about 10 cents to corn prices. I've still sold a lot of corn in the past for $1.40-1.60, as we grow more corn than we use here in MN, and it costs too much to get to a shipping port.... So I'll give them the dime, due to ethanal subsidies.

Things changed with the increase in fuel prices to over $2 a gallon. Ethanol can be priced higher, & just competes better for corn now. The world is 'looking' for corn, and ethanol is just a part of that. If we stopped feeding critters, or stopped exporting, or stopped making sugar for soda pop, then corn prices would crash. It isn't just the ethanol - it's total world usage. And, mostly guessing, really. The gamble. :)

Things changed with the MTBE issue - gasoline needs an oxygenator these days for the EPA emissions, and ethanol is the best thing out there for right now. Whatever the price, with or without govt subsuidies, it's going to be used.

Dairy folks around here don't use much corn as grain. Corn silage, high-moisture corn with cob, and the DDG from the ethanol plants get used a lot.

I'd think the hog farmers would be more scared by corn prices......

Anyhow, thanks for the explination. Myself, I think that is wrong; ethanol is adding about a dime to the price of corn; above that, it's just world demand & speculation.

But, anyone's guess/ gamble. :)

--->Paul

 

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