2013 will be a lucky year for the Eastern Cornbelt, according to Purdue Ag Economist Dr. Chris Hurt. Hurt said, based on current weather forecasts, IL, IN, and OH should have good yields because of plenty of moisture, unlike the Western Cornbelt where the drought continues. Hurt stated, “At this point we are seeing forecasts for the winter that look pretty average in terms of precipitation for the Eastern Cornbelt, and this should give us the potential to have a normal crop in 2013.” But, Hurt said it is a much different story in the west, “From central Iowa on west, the forecast is for their drought to continue well into next spring.” Hurt said that currently 4 out of the 6 largest corn producing states are in stage 3 or higher drought.
Hurt was the keynote speaker at the Hoosier Ag Today drought recovery seminar at the Indiana/Illinois Farm Show at the State Fairgrounds on Wednesday. In front of a standing room only crowd, Hurt was asked about the price outlook for 2013. Hurt confidently predicted corn prices somewhere between $4 and $9, “While this may sound silly, it is what the market is telling us.” He added that there is about a 10% chance that 2013 corn prices could drop to under $5 and about a 10% change that they could hit highs about $8.50.
Longer term, however, Hurt is optimistic that corn prices will move from their current $7 back into the $6 range, something he says will be good for corn growers and livestock producers, “We believe the demand growth will slow down and that production will return to trend line yields. In this case $6 corn looks responsible.” Hurt says, with corn prices in the $5 – $6 range, the current boom cycle in agriculture will stabilize; if the price drops to under $5, the boom will go bust; and, if prices are higher than $6, the boom cycle will continue.
He urged farmers to take steps to manage their risk and protect themselves against lower prices while leaving opportunity to profit from higher prices, should they occur. “Farmers will have three key tools to deal with the financial risk from this wide range of possible outcomes: federal crop insurance, the new government farm program and their own marketing decisions,” Hurt said.[audio:https://www.hoosieragtoday.com//wp-content/uploads//2012/12/hurt-farmshow.mp3|titles=Hurt says 2013 Will be lucky for Eastern Cornbelt]
Listen to the complete interview with Dr. Chris Hurt on the Hoosier Ag Today Smartphone app.