The recent floods in the Midwest may be giving central Illinois corn “a bad rap.”
Although the floods will undoubtedly cut into the overall yield of the crop, the drop in production is hardly the culprit for the rising price of groceries at the supermarket, as some recent reports have indicated.
Logan County, Illinois, is one of the epicenters of corn production in the United States.
Logan County agricultural John Fulton used the corn flake analogy to explain how little the cost of corn has to do with the cost of groceries.
For example, before the costs of food increased, a consumer may have been paying two cents for the amount of corn contained in that box.
“Now, you may be paying four cents,” Fulton said.
Most people know that a box of cereal costs far more than four cents.
Although the cost of corn in that box doubled, it had little to do with the box itself doubling in dollars.
A factor that is impacting the rising cost, as other reports indicated before the floods ever occurred, is the rising cost of crude oil, which has made the national average for gasoline above four dollars a gallon.
“And for diesel fuel, it's much higher than $4,” Fulton said. “When the price of fuel triples, that's what drives the price of groceries.”
Another factor to ponder, even with the corn flake theory, is that central Illinois corn won't be going into the box of cereal. One of the real ways to determine whether area corn is affecting the price of groceries, oddly, is to look at the price of meat.
The great majority of corn grown in this area is feed corn, which is mainly used for feeding cattle. It is also used in the production of ethanol.
“You have to look at the global picture. Occasionally, Logan County will have some corn go to a processing plant,” Fulton said. “But about everything we produce is not for human consumption.”
Fulton said white corn, which is not normally grown in this area, is the preferred corn used in most food products.
If the price of meat is not rapidly increasing, chances are, central Illinois corn is not affecting the price of groceries.
The increase in the cost of corn in this area has to do with input costs and little to do with flooding. Before the bad weather, input costs were already one of the biggest factors in the unusual high value of the crop. The cost of planting, growing and harvesting corn has become more costly to the area farmer.
In a previous interview, before planting season, Fulton discussed some of the increases in input costs.
“You used to be able to buy planters for $1,200 to $1,500 a row,” Fulton said. “Now, for 12 rows, you can't touch it for under $250,000.”
And items such as fertilizer, herbicide and seed prices are also soaring, something farmers took into consideration when deciding what and how much to plant.
And, on an even deeper surface, one could blame the weak American dollar for these increases.
“Because of the exchange rate, other countries are attracted to buy fertilizer here because of the weak dollar,” Fulton said. “Other areas of the world are trying to come up with agriculture production.”
According to Fulton, anhydrous ammonia is one of those products countries are competing for, so it likely will carry a higher price tag for American farmers.
The same can be said for diesel fuel. The weak value of the dollar will put diesel prices at a record high this summer, according to analysts.
Unfortunately for area farmers, when Fulton was interviewed about input costs, he was lamenting the price of diesel being $3.50.
“Diesel fuel has been a big one,” Fulton said. “At $3.50 a gallon, even not paying road-use tax, it's still expensive.”
(Farmers are exempt from the state's road-use tax because their fuel is burned going through fields rather than on state or federal roads.)
Seed corn costs have been around $62 a bag in recent years, but Fulton said farmers were paying around $100 a bag this spring. Just with the input costs, farmers easily spent an extra $10 to $15 per acre.
Fertilizer costs alone jumped 32 percent.
“If it wasn't pre-bought, they will be paying for it this year,” Fulton said. “Our neighbors in the east got 10.5 inches of rain, compared to (this area's) 4.5.”
Although the next few weeks will be critical in both determining and offsetting the damage that came from recent storms, late-planted corn crops have yielded well in the past.
“We're still a long way from harvest time,” Fulton said.
