Farm prices have been in the news this week – corn prices could rise to $4.75 per bushel, while the year in reveiw shows that the Class III price for 2007 averaged $18.04 (a record hgh) and the weekly average block cheese price was $1.7586 (another record high).
Corn prices could push into the $4.75-per-bushel range this year, says Chris Hurt, Purdue University agriculture economist. A 6 percent drop in corn acreage is not unlikely, Hurt notes, as a short supply of crops globally (particularly wheat and soybeans) will have some out-bidding corn for acreage. As for ethanol, new plant openings in the first half of 2008 will push production from the current 7.3 billion gallons up to 11.8 billion gallons. The corn necessary to feed that capacity will grow from about 2.5 billion bushels today to 4 billion bushels by July, Hurt notes. That capacity will grow by another 500,000 bushels in the second half of the year.
With the December Class III price now in, the Class III price will average $18.04 for 2007. That is a new record high, topping the previous record of $15.39 set in 2004. The 2007 Class IV price also sets a new record average of $18.36. The previous record holder was $14.85 set in 1998.
Weekly average block and barrel cheese prices at the Chicago Mercantile Exchange also boasted new record annual highs last year. The annual average of all the weekly average block prices in 2007 is $1.7586, up nearly 52 cents from 2006, according to the USDA’s Agricultural Marketing Service. The new annual record high for barrel prices is $1.7404, also up 52 cents from 2006.