Corn Prices, Basis, and Transportation

Corn prices in Iowa are being beaten down by consecutive years of exceptional production, high fuel prices, and the effects of hurricanes Katrina and Rita. Last year’s record national and Iowa corn production has been followed by the second-highest corn production for both the nation and the state. In 2004, the United States produced 11.8 billion bushels of corn, with Iowa producing 2.24 billion. In 2005, the United States is projected to produce 10.9 billion bushels of corn, with Iowa producing 2.15 billion. This increased production has translated into larger corn stocks. In September 2004, national corn stocks stood at 960 million bushels, with Iowa holding roughly 25 percent of the total. By September 2005, corn in storage nationwide had jumped to 2.11 billion bushels and corn stored in Iowa had risen to nearly 500 million bushels