Returning to the New Era Corn Price Mid-Point

The agricultural economists at ILLINOIS believe there are three recent historical commodity price eras. For grain prices, these run from post World War II to 1973, from 1973 to 2006, and from 2006 to the present. What they’ve found to date is that grain prices, unadjusted for inflation, tend to move within a range during these eras.

The current range for corn is something like $3 dollars per bushel on the low end and $8.00 on the high. The highs come less frequently, usually driven by a weather-related shortfall. Consequently, prices spend more time on the lower end of the range than the top end. However, he doesn’t really know why the prices are so range-bound, “My own personal view is that it reflects relatively stable supply and demand dynamics. These are food commodity markets that don’t change very rapidly in terms of who’s producing and who’s consuming. As long as economic growth is not wildly high or low, we’ll tend to bounce around in a range.”

The mid-point of that range in Illinois since 2006 has been about $4.50 for corn. However, Irwin says corn prices over the last four years have averaged about $3.50 per bushel. He thinks this means corn prices are due to go higher. Marketing on that belief is difficult says Scott Irwin, “If you believe conventional wisdom, you should prepare for and project sub $3.50 corn prices for as far as the eye can see. This is not my view. I will be the first to admit prices have gone lower, longer than I expected when we came off the highs, but I still believe a projected average price over the next five years closer to $4.00, rather than $3.25 or $3.50 is more realistic.”

Admittedly, Irwin has more confidence in his ability to predict the mid-point than the movement of prices. Mostly he says the upward moves are predicated on weather problems.

Returning to the New Era Corn Price Mid-Point

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Returning to the New Era Corn Price Mid-Point
Scott Irwin, Agricultural Economist - University of Illinois

The agricultural economists at ILLINOIS have been championing a new era for grain prices since the rise of ethanol as a major player in the U.S corn market. Todd Gleason has more on why.

Scott Irwin is an agricultural economist…
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Scott Irwin is an agricultural economist from the University of Illinois. He and his colleagues believe grain prices have achieved a new higher plateau era. An era that started just after Congress mandated renewable fuels be ramped up in the U.S. gasoline supply over a ten year period beginning in 2005. Irwin says it is the third such era.

Irwin :25 …within a range during these eras.

Quote Summary - The periods that I call eras of grain prices run from post World War II to 1973, from 1973 to 2006, and 2006 to the present. What we have found to date is that grain prices, unadjusted for inflation, tend to move within a range during these eras.

The current range for corn is something like $3 dollars per bushel on the low end and $8.00 on the high. The highs come less frequently, usually driven by a weather related short-fall. Consequently, prices spend more time on the lower end of the range than the top end. However, he doesn’t really know why the prices are so range-bound.

Irwin :29 …tend to bounce around in a range.

Quote Summary - No real good answers for that. My own personal view is that it reflects relatively stable supply and demand dynamics. These are food commodity markets that don’t change very rapidly in terms of who’s producing and who’s consuming. As long as economic growth in not wildly high or low, we’ll tend to bounce around in a range.

The mid-point, by-the-way, of that range in Illinois since 2006 has been about $4.50 for corn. However, Irwin says corn prices over the last four years have averaged about $3.50 per bushel. He thinks this means corn prices are due to go higher. However, marketing on that belief is difficult.

Irwin :38 …closer to $4.00, rather than $3.25 or $3.50 is more realistic.

Quote Summary - If you believe conventional wisdom, you should prepare for and project sub $3.50 corn prices for as far as the eye can see. This is not my view. I will be the first to admit prices have gone lower, longer than I expected when we came off the highs, but I still believe a projected average price over the next five years closer to $4.00, rather than $3.25 or $3.50 is more realistic.

Admittedly, Irwin has more confidence in his ability to predict the mid-point than the movement of prices. Mostly he says the upward moves are predicated on weather problems.

Looking for Anaplasmosis in Beef Cattle

Researchers at the University of Illinois are working with beef cattle producers in the southern third of the state to determine the prevalence of a disease that causes cows to become listless and die.



A cattle disease called anaplasmosis has been ramping up in southern Illinois, or at least that’s the way it appears. In short, it causes severe anemia. Illinois Extension’s Teresa Steckler, with funding from the Illinois Beef Association, has been pulling blood samples from herds in the area. She’s trying to determine if the strain of anaplasmosis is one called Mississippi that can be controlled by a vaccine, or if it is something else, “I’m just trying to see, with the movement of cattle throughout the United States, if we have a new strain? Is there a new agent transmitting the disease or is it just the tick that is causing the transmission? Is that linked to our deer population or some other population which the ticks may feast on and then move on to the cattle? It is related to the increase, and the guys are reporting to me, the big black horse flies”.

Cattleman, like Loy Hosselton in southern Illinois, don’t think there has been an increase in the tick population, but say the number of black horse flies has been on the upswing. Hosselton’s a vet and had ILLINOIS pull samples from his herd of about 50. He says herd-health is something that takes constant attention, even when the signs are there, “When they lose one head, they often times just throw that up to chance when it could be the sign of something more sinister”.

Something like a blood parasite that causes anaplasmosis. Something the University of Illinois is working to prevent through research and education.



Those in the southern 27 counties of Illinois can contact Teresa Steckler to schedule a blood draw from their herd. The work is sponsored in part by the Illinois Beef Association.

Corn, Soybeans, and Wheat Acres in Illinois

Between 1996 and 2017, the sum of acres planted to corn, soybeans, and wheat have varied within a tight band for the state of Illinois. It has ranged from 22.0 million to 22.7 million acres for the three crops. Over this period acreage planted to wheat has been small and declining. It has decreased from 1.7 million in 1996 to just half-a-million in 2017. University of Illinois Agricultural Economist Gary Schnitkey says most of the acreage switches in the state have been between corn and soybeans.



These are the historical facts for Illinois. In 1998, corn and soybean acres were each at 10.6 million. With some yearly variations, corn acres then increased and soybean acres generally decreased from 1998 to 2012. In 2012, 12.8 million acres of corn were planted and 9.0 million acres of soybeans. Since then, corn acres have decreased and soybean acres have increased. Corn acres declined from 12.8 million in 2012 to 11.2 million in 2016. Soybean increased from 9.0 million to that same 11.2 million over the same period.