As the domestic corn season begins, there are concerns over costs of corn this season.
Currently, limited supplies of corn are coming out of Mexico. “Limited supplies are not unusual for this time of year. This early spring time is dicey for the growing regions that have to produce so it’s not uncommon to have supply gaps,” says Jeanna Hoff with Van Groningen & Sons, Inc. based in Manteca, CA.
While Mexico is producing corn, California is gearing up to start its production, generally by mid-April. “There can be a gap when Mexico hedges its bets around anticipating California’s start date,” says Hoff.
She says Southern California production out of the Imperial Valley is the first. From there, production moves up through the state with Northern California kicking into gear in June and going until fall. (In the fall, production returns to Southern California and then Mexico in late fall.)
Demand connected to weather
As for demand right now, bulk corn demand tends to be linked with the temperature. “Movement is usually a little lethargic when the temperatures are cooler. And once we see, especially in California, the temperatures rise which they already are, demand will start to follow that,” Hoff says, noting summer is when demand is strongest.
But demand could be pressed upon this year thanks to industry challenges, including ever growing input costs. “Some of our chemical costs have increased by up to 500 percent,” she says, noting that the concern is about how much to pass along to retailers who don’t want to raise retail prices, particularly on a promotion-friendly item such as corn where deals such as 4 ears/$1 are often seen in peak season. “That’s a staple offering for retailers. We always want to partner with retailers to set them up for success. But at the same time, we need to make sure we can continue farming into the future. There will be a lot of sleepless nights working to find the middle ground where everyone can win,” Hoff adds.
All told, she estimates farmers could need close to a 20-25 percent price increase on their end. “We recognize we are not alone in the increases in input cost,” she says. “Retailers have their uphill battles as do consumers. It’s easy for everyone to feel overwhelmed by these challenges. But those concerns lose strength when sitting around a table with friends and family enjoying the comfort of locally grown produce, grown from the earth naturally and harvested by your neighbors.”
For more information:
Jeanna Hoff
Van Groningen & Sons, Inc.
Tel: +1 (209) 924-6152
jeannah@vgandsons.com
http://www.vgandsons.com