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Market consultant ‘more optimistic’ on corn

The USDA projects the average corn price for the 2014-15 marketing year in a $3.35 to $3.95 range.  Many other projections seem to fall in the $3.50 to $4.00 range. But Moe Russell of Iowa-based Russell Consulting Group tells Brownfield he’s more optimistic than that.

“I think there’s more demand than what we realize out there—not only in exports, but in feed usage and ethanol usage—and I think we’re going to chew through this corn crop a lot more quickly than what people think,” Russell says. “We’re still going to have a large carryover and prices aren’t going to be like they have been the last couple years—but I’m not in the doom-and-gloom camp that has corn with a 3 in front of it.”

On the inputs side, Russell says there are two key areas that producers should focus on.

“Know what your machinery cost per acre is—and your labor cost per acre—because we’ve identified that those are two of the ones that we see the most variation in,” he says. “You probably pay what your neighbor does—pretty close—for seed fertilizer and chemicals. But it’s your equipment and labor costs per acre that can really vary a lot.”

Russell believes this “down” cycle in farm profitability will last two years, shorter than what some analysts predict. But he says it may be “higher impact” than downturns of the past.

Brownfield spoke with Russell at the recent LEAD Alumni conference in Kearney, Nebraska.

AUDIO: Moe Russell