Analyst, futurist square off on where corn markets are headed
Richard Brock, commodity analyst, and Jay Lehr, Ph.D., agriculture futurist, have found themselves following each other at major farm meetings, most recently at the Farm Credit Bank meeting at The University of Missouri in Columbia in January and the American Feed Industry Association Meeting in Fort Worth, Texas in March.
They share very different outlooks on where the price of corn may go over the coming months, up to two years to be exact.
Brock predicts that corn can will revisit $3 to $3.50 as exports have dropped dramatically for the United States against growing exports for Brazil and Argentina.
He believes that demand has died off while the current high price of corn presently is driving more planted acres from soy and now even cotton into corn. He is also confident that we will not revisit the drought of 2012 in the coming year or two though rainfall may still be low in parts of the corn belt.
Both Brock and Lehr have been to China in the past two years and came away with very different views of the role China may play in the price of U.S. corn.
Lehr has told his audiences that, though China buys little corn today at elevated prices, they will not be able to stand by without entering the market with huge purchases when and if corn approaches a $5 a bushel value creating a virtual floor for the price of the grain.
Brock says that China will buy no corn for their hogs as they are happy to continue to let their millions of hog farmers raise their average of 13 hogs on food scraps. He says that this is a political decision while Lehr is confident he is wrong.
So confident that Lehr challenged Brock to a bet of $1,000 that during no consecutive 30 day period would corn drop to $4 a bushel or below between Feb. 1, 2013, and Jan. 31, 2015. The bet was made before 500 attendees in Missouri and repeated before a similar crowd in Fort Worth with both men present.
Brock was so confident that he will win, he offered Lehr in front of the audience in Forth Worth the opportunity to either double the bet or halve it and pay up now.
This got a great laugh from the audience but Lehr settled for the bet as currently stated and added that his wife had already spent the money he is sure to win.