I haven’t seen farmers this excited about planting something since wheat in the 1970s. Hmmm. Wonder what that means.
The euphoria over corn at the North Dakota Corn Growers CornVention in Fargo this past week was somewhat breath-taking. John McGillicuddy, the Iowa City, Iowa, agronomist who has been filling farmers in this region with new and fine-tuned information on corn production talked, and talked. And talked. And still no one wanted him to stop talking. Some of the farmers that have grown corn the longest said they found nuggets of information that they’ll work to put into play in 2007.
Most in the room seem determined to ride the ethanol wave as long as it goes. Some of the long-in-the-tooth crowd who invested in ProGold L.L.C., a decade ago, seemed to sense a cycle though. Remember ProGold? That’s the $260 million corn fructose plant at Wahpeton, N.D., that couldn’t fail. And it didn’t either, because the farmer-owned co-ops that built it decided they’d be swimming in red ink if they didn’t lease it out to Cargill. What happened? Well, the Mexicans didn’t want to open up their doors to U.S. corn fructose, the price went down.
Some of the age 50-plus crowd like me remember how it’s done.
The ethanol craze feels like that, but a bit different. Ethanol is tied to oil, which doesn’t look to be in excess supply any time soon. But most long-time farmer leaders I talk to are suspicious that the petroleum industry might be watching from the wings and ready to slap down the E-crowd at some future point. They worry about a scenario in which oil prices decline and corn prices rise due to a drought, causing to $35 a barrel or less,buying excess capacity. "I think 2008 would be a good time to do that," says one of the savvy farmers I’ve known for 20 years.
But for now, we’re raising more corn. (Oh by the bye, the ProGold lease deal is being renegotiated as we speak. What do you think? Will the lease be extended a year or two? Will the ProGold crowd — American Crystal Sugar Co. holding the 51 percent share — end the lease and run it themselves? I wouldn’t bet on it.)