North American corn supplies are tight and seeing high pricing.
“We’re very limited on supplies and have extremely high FOBs. The FOBs are higher than I’ve seen in my career,” says Jordan Grainger of Castellini Co. based in Newport, KY.
He notes there are a few factors behind the lack of availability in corn. Weather in Georgia, where supplies are coming from (as well as California and Texas currently) has impacted the supplies and limited opportunities to get into the field to pick corn. “There’s also a reduction in plantings. They’re down anywhere from 40-60 percent,” says Grainger.
At the same time, demand has spiked for corn. “I think demand is up because people aren’t eating out at restaurants. They’re eating at home and corn is a pretty common grill item,” says Grainger. “With the warmer weather, more people are grilling.”
Supply and demand
He also adds that corn may continue to be limited in the coming weeks. “There’s no relief in sight until the second week in July—it’s going to run through July 4th which is a pretty big corn holiday,” says Grainger. “This is the worst-case scenario where supplies are down and demand is high.”
As many growers and shippers have noted recently, corn is also increasingly being packaged. “We have seen an increase in demand for packaged corn. It’s happening on all items right now,” he says. “With the pandemic, the emphasis has shifted to packaged product because consumers feel it’s a safer product to buy right now. They feel fewer people are tampering with it.”
Of course, prices have climbed significantly on corn. “It started off in the teens and $20s and now it’s more than $40/crate,” says Grainger, noting that normally corn at this time would see pricing between $14-$20.
Looking ahead, Grainger notes tightness will continue through that July 4th week and after that, new growing areas open up. “Those regions will offset that tight supply. The Carolinas will come on as well as Indiana and Ohio. Colorado comes in later as well,” he says.