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When will corn prices recover?

In these days of lower corn prices many are wondering when they’ll recover. A University of Illinois finance professor takes a look.

Dr. Paul Peterson looked back 148 years – to the first year prices were recorded by the USDA.  In 1866, the average price for corn was about 65 cents.  Fast forward to 2012, the year of nationwide drought, when corn reached its record high of $6.89.

Historically, when prices go down, he says, they eventually recover. Peterson tells Brownfield Ag News, “When prices decrease, in about half the cases, within five years prices bounced back.”

But, Peterson tells Brownfield, in the other half it took as much as 20 years or more for prices to come back.

And, he says, the highs of 2012 aren’t likely to return any time soon, “We had strong domestic demand, we had strong international demand and we also had a short crop here in the United States. All of those combined to push prices to record levels. And, what we’re saying is, it’s going to be awhile before we see the planets line up again.”

Peterson says the message to farmers is don’t base decisions on a rebound in corn prices and be very careful in planning and budgeting.

AUDIO: Interview with Paul Peterson