POOLESVILLE – Spurred by the ethanol boom, corn prices are surging to historic highs, and farmer Jamie Jamison and others like him throughout Maryland are expecting to plant corn at levels not seen in the state for over a decade.
“Yes. It’s exciting for me. … These are fun times,” said Jamison, 61, a fourth-generation farmer who grows corn, soybeans and winter wheat on 5,000 acres near here.
Currently the national weekly average price for corn, at $3.50 a bushel, is 60 percent over the average price a year ago, according to the National Corn Growers Association. But Maryland, which is a net importer of corn because of demand for animal feed from the poultry industry, often has prices above the national level.
The surge in prices is being felt throughout the chain of production.
According to Roger L. Richardson, Maryland secretary of agriculture who is also a farmer, many are using the opportunity to buy new equipment, some pieces of which can cost as much as $100,000.
“Naturally, farmers are upbeat because they never had the opportunity to contract for corn that they haven’t even planted at over $4 (a bushel)” he said.
Bobby Hutchison, a salesman for Augusta Seed Corp. in Talbot County said sales of seed corn have jumped by 30 percent. And, he said, prices for fertilizer, used heavily in growing corn, have doubled in some parts of the state.
“It’s the most optimistic I’ve been in a number of years,” Hutchison said.
Jamison, who has tufts of gray hair poking out from beneath a navy hat advertising grain elevators, expects to plant 70 percent more corn this year – to 1,700 acres – because of the high price corn commands.
Jamison is not alone. Maryland farmers are expected to plant 12 percent more corn this year than the year before, according to data from the National Agricultural Statistics Service.
The surge in corn prices comes as demand has increased with ethanol production. By 2009, the amount of corn required to meet the demand for the renewable fuel is expected to grow to 4 billion bushels, or almost four times the amount of corn used in ethanol production in 2002, according to reports by the National Corn Growers Association.
Also, the government passed a federal mandate, known as the Energy Policy Act of 2005, which calls for a 50 percent boost in ethanol and biodiesel production to 7.5 billion gallons by 2012. To make ethanol, starch from the corn is turned into sugar and then fermented to produce the combustible alcohol.
But the ethanol boom will not be without impact on other crops. Planting of Maryland’s other large crop, soybeans, is expected to drop precipitously to levels not seen since 1987 as farmers shift land out of soybeans into corn.
Jamison, who grows corn used for animal feed, said that if corn yields are decent at harvest time this fall, his 140,000-bushel storage capacity won’t be enough to store the corn he grows for the first time in his farm’s history. He said storage capacity could be an issue in Western Maryland, too.
The story is similar in the flat farmlands of the Eastern Shore, where Mike Mielke, 52, a third-generation farmer in Talbot County, says he can’t remember prices this high in more than 30 years, save for a drought-induced spike in 1996.
Mielke said he’s going to increase the amount of corn he plants to 700 acres, or 40 percent more than he would otherwise grow. Comparing farming to gambling, Mielke said he’s “going to roll the dice and go for broke a little more.”
“If you look over the last 30 years, there were only a few opportunities to take advantage of prices like this,” he said. “If someone said (corn was at $4 a bushel) last year I would’ve kissed them on the lips.”
Mielke, and other growers have taken the opportunity to upgrade their farm machinery.
“In years that looked bad, we had to tighten our belts and keep capital purchases down. But after a good year, or when you have good prospects, you upgrade,” Mielke said.
Farming communities in Maryland are abuzz with tales of the corn craze.
Jamison said that the recent price surge has lured industry outsiders, with little-to-no experience in growing crops, into farming. According to Jamison, a lawyer who grows corn on a 50-acre plot in Montgomery County got a “rude awakening” in the lessons of farming “you can’t get in a textbook” when he had a poor harvest.
Breck Debnam, a Kent County farmer and a member of the Maryland Agriculture Commission, said he read reports of farmers in the South planting corn for the first time since World War II, in regions where cotton, rice and soybeans are typically grown. And Debnam said he read reports of a farm equipment retailer in Maine selling his first corn planter since he began the business over 30 years ago.
The high corn prices could be a reprieve for Maryland farmers, whose profits have been squeezed by the rising costs
Richardson said he expects input costs for growing corn on the whole to jump 10 percent over last year. Life-long farmer Debnam, who called corn the “Cinderella crop” because of the high price it has fetched on the market, said it’s probably going to be the most expensive corn crop he’s ever grown.
Jamison and other farmers aren’t ready to bet the farm on a bumper crop just yet. He said corn prices don’t mean anything unless the weather cooperates. Jamison said that if he had control, temperature would hover around 83 to 84 degrees, with one inch of rain every week. But he knew that’s not the case. “My biggest problem is something that I can’t control,” he said. “And that’s the weather.”