"Yeah, when pigs fly." That is what we have heard when someone says that something improbable is going to happen.
That is what I would have said if someone had said to me a few months ago that I would see fertilizer being spread on bare ground in January. But that is exactly what I saw today. Therefore, I may have to watch the sky more closely for low flying swine.
We once measured changes in farming from decade to decade. We would talk about events that happened in the 1950s, '60s, '70s or '80s. Now the pace of farming's changes seemed to have increased in speed and changes seem to be occurring from year to year.
Alternative energy and renewable fuels have become the main subjects of this decade with the resulting upward change in grain markets taking place in recent months.
Another recent change is due to the new kid showing up with money sticking out every pocket, this new kid called the Index Fund. For a guy who does not own a tractor or combine, he sure has a big influence on the grain market.
I stand in awe at this market force that neither produces nor consumes. However, both producers and consumers feel the index funds ebb and flow as they crash in on the grain market with their tsunami of cash.
I have been recording the prices of corn and soybeans in north central Iowa each day since 2000. I looked back at grain prices for the first week of January since 2000 and this is what I recorded.
The first week of January 2000 had cash corn locally in a price range of $1.68 to $1.76. Cash soybeans were $4.26 with an LDP of 96 cents.
A year later in 2001, local cash corn was from $1.86 to $1.91. Soybeans were $4.55 with a 59-cent LDP.
The beginning of January 2002 had local cash corn from $1.75 to $1.82 with soybeans priced at $3.86 and an LDP of $1.26.
For the year 2003, the first week of January had local cash corn priced from $2.05 to $2.08. Soybeans were priced at $5.42.
2004 showed some increase with corn priced from $2.25 to $2.31 for local cash with soybeans at $7.71.
January 2005 had local cash corn priced from $1.65 to $1.77. Cash soybeans were $4.98 locally.
A year ago, the New Year started with corn priced from $1.72 to $1.82 local cash. Soybeans were $5.63 for cash locally.
For the seven years from 2000 through 2006, local cash corn in early January averaged $1.89. Locally, cash corn crossed the $3.00 threshold early last November and has not gone below it since. During the last days of December, it was in the area of $3.50 and has since backed off to around $3.22.
In the same period of seven years, soybeans averaged $5.20 for cash locally in the early days of January.
This brings us to today. Corn is priced from $3.23 to $3.28 for local cash and locally, soybeans are $6.11 for cash. These are markets I thought I would see "when pigs fly" and here they are.
What am I doing about this recent windfall? I have sold 10,000 bushels of new crop corn for next fall and no soybeans at all. Why would anyone sit idly and ignore these historic high prices?