U.S. corn growers and ethanol producers stagger under combined weight of refinery waivers and wet weather

Standing water, now iced over, in a Stutsman County, North Dakota, cornfield. (AgWeek photo by Jenny Schlecht)

Corn growers have had a rough year because of declining domestic demand for ethanol, driven partly by federal waiver policies that favor oil refiners. But a year of record wet weather has caused them even more headaches, delaying or preventing planting, and now preventing harvest and transport. The corn is often so wet that farmers must dry it out before shipping it, and that's if they can even get to the corn to harvest it: combines are getting stuck in muddy fields.

High water in cornfields is common throughout the Upper Midwest, making it a challenge for farmers to get corn out of the field and deliver it to ethanol plants, Jenny Schlecht reports for Forum Communications. Since less corn was planted (South Dakota led the nation in prevented-planting acres), delays in harvesting have left ethanol plants short of feedstock, cutting production, said Josh Mardikian, a merchandiser at Midwest Ag Energy's Blue Flint Ethanol in Underwood, N.D. "It’s been just as challenging for us to source corn as it has been for our producers to get it combined," Mardikian told Schlecht. "We’re with them all the way. When they struggle, we struggle."

This year's poor crop means a 50-million bushel drop in projected corn exports. "Corn export projections sit at 1.85 billion bushels, the lowest total for a marketing year since the drought-impacted crop of 2012-13," writes Todd Hubbs, an assistant agricultural economics professor at the University of Illinois. And because Brazil offered a much cheaper bumper corn crop this year, many traditional U.S. export customers were lured south.

The average price for a bushel of No. 2 yellow corn rose above $4.40 per bushel in June and July, but sank to $3.40 on Sept. 9. Yesterday it was $3.74, almost exactly what it was on Jan. 31. That is far below the five-year high of about $7.60 in summer 2013, when prices began falling.

A few factors will influence 2020's export trends. If U.S. corn growers get a better harvest next year and prices are low, exports will likely increase. But Brazil's soybean crop may also come into play. "Delays in planting the soybean crop in Brazil hold the possibility of pushing planting the second corn crop later than ideal for many regions of Brazil," Hubbs writes. "Depending on corn prices, Brazil may slash corn acreage or gamble on a later planted crop maturing in the dry season. A considerable amount of uncertainty looks to continue deep into 2020. A smaller second crop of corn in Brazil could benefit U.S. corn exports next summer."