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The Agronomy Research and Information Center (AgRIC) is an outreach service, which provides research-based, comprehensive, and reliable information on California agronomic crops to the general public, industry, and governmental and private agencies. The agronomic crops comprise major food, fiber, and forage crops grown on six million acres in California.

These include alfalfa, winter cereals (barley, oats, wheat), corn, cotton, dry edible legumes, rice, safflower, sugarbeet, sunflower, and specialty crops (kenaf, lupin, and sesame).

The Post article asserts that corn prices have “been climbing for months on the back of booming government-subsidized ethanol programs.” This has quickly become the conventional wisdom. But while free market types (like me) are skeptical about both subsidies and tariffs, there is actually no evidence that these market manipulations have been a major factor behind rising prices for corn or other grains. Researchers Robert Zubrin and Gal Luft point out that the total U.S. corn crop has increased 45 percent since 2002. The amount of corn available for food and feed has increased 34 percent —- after the part used for ethanol has been taken out.
But haven’t those farmers cut back on other crops — soy and wheat, for example — to plant more corn and hasn’t that led to increases in the prices of those grains? Apparently not. As Zubrin and Luft also note, U.S. soy plantings this year are expected to be up 18 percent, wheat plantings 6 percent, and overall, U.S farm exports are up 23 percent.
American farmers are rational businessmen. When the prices crops command rise, they produce more — both by increasing acreage under cultivation (only about 30 percent of U.S. farmland is currently cultivated), and by cultivating more intensively — producing more bushels per acre. That requires more investments, but it brings more return on those investments.

Clifford D. May on Food & Fuel Prices on National Review Online

Traditionally, the last week of April and the first week of May are the biggest corn planting weeks in the Midwest. Not this year. Planters have been scarce and basic prep like discing or fertilizer application also are weeks behind.
    So far, U.S. farmers are off to their slowest start since 1999. The U.S. Department of Agriculture will issue its next crop progress on Monday afternoon. One would have to guess that depending on how much corn is planted –  it will drive CBOT prices Monday night and Tuesday. Preliminary guesses is for USDA to report 25-30 percent of the crop seeded, versus the seasonal average of 63 percent.
    Granted U.S. farmers can plant corn quickly given today’s 24-row planters. But it’s got to stop raining and warm up.
    “There is no sign of a major change in the pattern which means no wide window for planting for the next week to 10 days,” said Mike Palmerino, forecaster with DTN Meteorlogix.
    “There will be occasional planting when there’s a break in the rains … the stronger sun will work to their advantage.”

Politics Blog Posts powered by BlogBurst | Reuters.com

“The impact on gasoline prices, if you take 4.5 billion gallons of ethanol off the market today, if (Texas) Governor Perry gets his way, is significant,” said Bob Dineen, president of the Renewable Fuels Association, an ethanol industry group.

U.S. Congress passed a 2007 law requiring a production increase to 15 billion gallons of corn ethanol by 2015 and 36 billion gallons by 2022. Perry and others, citing rising food prices, have said those rules should be relaxed in order to inject more corn into the food supply for livestock and to encourage farmers to plant other crops.

An ethanol waiver would likely drive up gasoline prices to $4.71 per gallon, a level that would have a “devastating” impact on consumers and push food prices even higher, Dineen said.

Ethanol waiver seen spiking gasoline $1/gallon | Environment | Reuters

CNGOIC sees China’s corn consumption rising 2.2 percent to 148.7 million tonnes in the year starting in October — dangerously close to an expected output of 149 million tonnes — with feed demand up by 1.4 million tonnes at 96.9 million tonnes.

Some analysts predict China will emerge a net importer of corn in the next few years, especially if weather wrecks the 2008 crop, though current domestic prices are about a quarter below the costs of imports from the United States.

Beijing frets as China farmers look away from corn | Special Coverage | Reuters

Four-dollar corn. The price probably doesn’t mean much to many Fortune readers, certainly not the city slickers who wouldn’t know a combine from a planter. But in farm country, $4 corn is more than a big deal. It’s a phenomenon.

“It’s the center of conversation in the center of the country,” says Elizabeth Hund, head of agricultural lending for U.S. Bancorp. (Charts)

In the span of just eight months, the price of the U.S.’s most important crop - our biggest agricultural export as well as the staple feed for our livestock - has doubled from $2, about where it had been stuck since the late 1990s, to $4 a bushel.

The cause is soaring demand from ethanol plants, which bought 2.2 billion bushels last year, 34% more than in 2005. Previous price spikes were short-lived and usually caused by drought, but the futures market thinks this rally has legs.

The great corn gold rush - Mar. 29, 2007

The price of wheat jumped 120 percent in the past year, hitting a 28-year high in February. The price of rice, the staple for billions of Asians, is up 147 percent over the past year, hitting 19-year high. The price of corn tripled in the past two years, increasing from $2.00 a bushel in January 2006, to $3.05 in January 2007, to $4.25 in January 2008, and hitting $6 a bushel in April 2008.

Planet Gore on National Review Online

Corn prices have shot up nearly 30 percent this year amid dwindling stockpiles and surging demand for the grain used to feed livestock and make alternative fuels including ethanol. Prices are poised to go even higher after the U.S. government this week predicted that American farmers — the world’s biggest corn producers — will plant sharply less of the crop in 2008 compared to last year.

“It’s a demand-driven market and we may not be planting enough acres to supply demand, so that adds to the bullishness of corn,” said Elaine Kub, a grains analyst with DTN in Omaha, Neb.

Corn for the most actively traded May contract rose 4.25 cents to settle at $6 a bushel on the Chicago Board of Trade, after earlier rising to $6.025 a bushel — a new all-time high.

Corn Hits $6 a Bushel on Tight Supplies: Financial News - Yahoo! Finance