Corn Prices Are Up This Year

For the next few years, one of the biggest risks facing livestock producers will be feedstuff costs, especially corn.  Corn prices this year have averaged above those a year ago in response to a smaller corn crop and robust demand from the ethanol industry and rather strong exports.  In late March, weekly corn prices for Omaha hit $2 per bushel and have generally continued on an upward price trend ever since.

Based on weekly data, for the first three quarters of this year Omaha corn prices averaged $2.04 per bushel compared to $1.81 last year, but about 3 percent below the 2000-2004 average.  In mid-September corn prices weakened to $1.94 per bushel.  However, the following week, corn prices jumped to $2.20 per bushel, the largest week-to-week gain thus far this year.  They jumped to $2.38 per bushel by the end of the month.  In early October, Omaha corn prices were over $2.40 per bushel.

Corn prices could moderate some this fall depending on the size of the 2006 corn crop.  In the longer-term, corn prices are expected to continue the upward trend mainly due to growing demand from the ethanol industry.  Some industry forecasts call for cash corn prices to hit the $3 per bushel mark next year.