Rain and freezing temperatures in some Corn Belt areas are compounding harvest problems and pushing up prices. In addition, the soggy, cold weather is slowing harvest and encouraging mold in corn and soybean crops.
Analysts said the pace of the corn harvest may be the slowest since the USDA started keeping records in 1985. The unwelcome weather also has complicated feed purchasing strategies.
“The delays in the corn harvest, particularly in the Eastern Corn Belt, have the potential to continue to drive prices higher,” says Darrell Mark, Extension Livestock Marketing Specialist, University of Nebraska.
Still, corn and soybean crops are forecast to be bountiful. Mark points to a record soybean crop and potentially record corn crop, so once those bushels are in a deliverable or storage position, the market should get more comfortable with the supply and see prices pull back some.
When harvest is through, prices may fall somewhat and result in better buying opportunities. “Often, when the weather problem subsides, this premium comes back out of the market,” says Mark. “When the crop does get closer to being in the bin, I suspect prices will drop back some, which would give pork producers a better buy.”
Normally, livestock feeders would want to lock in prices earlier in the harvest season than this, but this year's weather isn't normal and will likely result in a different basis pattern.
“My recommendation to pork producers right now would be to buy corn hand-to-mouth during harvest time and hope for some basis weakening as we approach the end of harvest,” says Mark. “There should be an opportunity for this because of the large crop and the likelihood that it will be wet. At that point, I would consider locking in some portion of my feed needs.”