Corn prices have hit $6 a bushel, but the chair of the Iowa group that uses checkoff dollars to promote corn says blaming the price of corn for the increased cost of food and everything else is wrong. Julius Schaaf, chair of the Iowa Corn Promotion Board (ICPB) says those who say corn prices at "record: highs should get the facts straight.
Schaaf says when you look at the price of corn in past years, there were times when corn got over three-dollars a bushel – and when plotted against the rate of inflation — that equates to over seven dollars a bushel. "So in real dollars, you can’t say that we’re setting record prices," Schaaf says, "one thing you can say is that we’re setting record prices with oil, when you plot that (oil prices) against the inflation rate, we are setting records." He says for example: in mid-1984, corn at the farm gate sold for $3.05 a bushel in Iowa, but it would take $6.27 in today’s dollars to equal that.
Schaaf, who farms near Randolph in Fremont County, says some are trying to blame the price of corn for higher food prices, but he says it can’t take all the blame. He says transportation and packaging are really driving up the cost of the food and have a lot more impact than the inputs from the farmers. Schaaf says farmers are making more money from corn, but he says the rising cost of oil is also making corn production more expensive.
Schaaf says inputs have risen dramatically on the farm, due to the increase in the price of oil, and he says fertilizer and chemicals are a derivative of oil and natural gas. Schaafer says farmers are lucky to see the surge in corn prices to go along with the cost of the inputs.
Schaaf says: "If we were still dealing with the same farm program and the same kind of demand that we had even four years ago when corn was bouncing on either side of two dollars, there we wouldn’t be a profitable farmer left in the midwest. Because inputs were going up, whether were corn prices went up, and soybean prices went up or not." Schaaf says the Iowa Corn Promotions Board has the "facts" about corn prices on its website.
Schaaf says they’ve been careful to base their facts on reality not emotion. "Some of these reports that are coming out in the newspapers and they magazines around the country, they don’t care whether their facts are accurate or not," he says, "they’re more interested in stirring up sentiment among people, and they don’t bother to look for the facts." Schaaf says that much of the 2007 corn crop has already sold for prices well below the six dollar range. For the first three months of the 2007/08 marketing year, the average price farmers received was $3.34 per bushel, and the average price for the year is projected at $3.75 to $4.25, according to the USDA’s Economic Research Service.