How will Ohio farmers manage risk in 2013?

By Matt Reese

Will it rain in the 2013 growing season or will the drought continue? This is the multi-billion dollar question in the next few months because the answer will make a tremendous difference in feed and grain prices.

Informa Economics has scenarios about how wide that price gap could be. If 2013 is normal for corn, Informa projects the farm price for corn to be below $4 a bushel. With an extended drought and a short crop again this year,

Bart Johnson interviews Ohio Corn and Wheat Growers president Brent Hostetler.

prices could go as high as $8.80 a bushel. That is a pretty big gap to cover when making marketing plan or input decisions.

Ohio State University Extension economist Matt Roberts has a familiar message for crop producers.

“If we have a normal growing season in 2013, there are lots of downside risks for prices. Prices at harvest will be lower than at planting. As a result, growers should market more aggressively,” Roberts said at the Ohio Grain Farmers Symposium last December. “If we have a 14 billion bushel harvest we’re going to need to have lower prices to have a place for all of those bushels. If we would have a 157-bushel average, I don’t think it is unreasonable to expect $4.75 or $4.80 futures at harvest. I think we need a corn yield lower than 152 to keep prices in the $6 range.”

To get a better handle on what farmers from Ohio are thinking about this challenging situation, we asked some of the attendees at Commodity Classic this week.

 

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