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The Price of Corn

As some of the prior newsletters have indicated, I often watch and analyze the prices of commodities.  One commodity that has drawn my attention is corn.  Non-organic corn growers seem to be the last group of growers to look at biological methods.  They seem to be more resistant to change than any other growers I have encountered.  As we have discussed in many prior newsletters, we have a number of non-organic commercial growers as customer, most of which are using mycorrhizae as a biological method for improved soil health and added plant performance.  They have found ways to utilize non-organic methods that have little to no intereference with the biology in the soil.

Corn growers have been slower to adapt to these methods, mostly because as I will show below many have little incentive.  Occasionally we have growers try (some convert) but often their existing methodologies are completely contradictory to biological methods.  Most corn growers use GMO corn and inject synthetic fertilizer very high in N and P.  Additionally, they engage in little crop rotation and no cover crops.  All this despite the growing number of studies (not just organic propaganda) from universities and government agencies showing biological methods can reduce input costs considerably.  Remember, their input prices continue to rise with the price of petroleum.  So why continue these practices when you can lower input costs?  Well, maybe the chart below explains it:

I have often referred to central bank money printing and its effects on commodities.  Here is a direct example.  Granted some of the increase can be blamed on the drought, but there seems to be more of a correlation with the expanding balance sheets and liquidity rushing into futures markets.  The result is that there is currently very little incentive to shift from old synthetic methods.  The price increase of corn has outpaced that of input costs (mostly petroleum based) which has increased the incentive to pump more and more chemicals into the fields in search of higher economic return (especially when the fields are rented and not owned).

The bright spot for biological methods?  There are a few.  First, there is a chance general corn prices could collapse in the near future.  These incentives to create more synthetic corn may create a glut of corn on the market this year or next.  That combined with petroleum-based input prices that should stay higher may attract the attention of growers looking for ways to reduce their input costs.  When this occurs, hopefully these growers may begin to look at the biological methods, especially when each dose of synthetic fertilizers can lead to less and less of an effect on yield.  Second, there is growing demand for non GMO corn.  This demand combined with a more local focus has drawn attention to biological methods and soil health.

We are always happy to work with any growers who would like to try biological methods to see if it will work for them.  We do understand that changing methodologies takes time and money and can create an economic impact in the near term.  However, there are many ways to incrementally add biology prior to fully transitioning which can show positive results in short periods of time.


Good Growing,
Graham Phillips

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