Big decison: how much corn to plant?
As spring planting nears, farmers are making a choice that could affect what Americans pay for everything from car fuel to chicken wings.
If farmers plant as much corn as possible, prices that have soared to records above $5 a bushel could stabilize. But if many farmers rotate their plantings to other crops such as soybeans, or the season is disrupted by bad weather or drought, the price of this key ingredient could soar even further.
That would leave other food producers -- especially poultry, beef and pork companies, for whom corn feed constitutes as much as three-quarters of operating costs -- with little choice but to raise their prices as well.
Livestock producers typically blame ethanol plants' demand for corn for the crop's higher prices, saying the alternative fuel drives up costs for everyone. But ethanol makers say the rising corn prices hurt them as well.
Against all those factors is one fixed point: Farmers are running out of new land to plant crops.
How farmers choose to use the land this year is the focus of the planting report due Monday from the U.S. Department of Agriculture, which will offer the first detailed look at farmers' planting intentions for 2008 and give the first indication of this year's corn crop.
In advance of the crop report, I've been buying corn futures expecting land devoted to corn to remain about the same and bad weather in 2008. And no, Mr. Beeks has not supplied me with the USDA report, I'm not trying to corner the market and I don't engage in social experiments for the sake of a $1 bet.
