Harvest price for corn could be lowest of RFS era
An ag economist expects the harvest price for corn to be at levels not seen since before the advent of the Renewable Fuel Standard.
Gary Schnitkey with the University of Illinois says based on historic data and current USDA yield projections, the price that will be used to set crop insurance guarantees looks to be around $3.10 per bushel.
“The last time we saw a harvest price below $3.10 was in 2006, when it turned out to be $3.03. That was when ethanol became the big deal it was, and we saw that rise in corn prices.”
He tells Brownfield while the RFS saved the day for corn in the mid-2000’s, ethanol demand probably won’t be a silver bullet in 2020.
“I don’t think we’re going to see ethanol demand or ethanol use increase back to pre-COVID levels throughout 2020 and 2021.”
Schnitkey says a $3.10 harvest price for corn would trigger crop insurance payments at an 85 percent coverage level with yields roughly equal to the guaranteed yield. He also expects PLC payments for corn if projections hold.