Arkansas' corn crop, a few dry days away from harvest, is in much better shape than the rest of the nation, but the drought gripping other parts of the Corn Belt is raising prices and questions about whether there will be enough corn nationally to meet the country's ethanol mandates.

Arkansas’ corn crop, a few dry days away from harvest, is in much better shape than the rest of the nation, but the drought gripping other parts of the Corn Belt is raising prices and questions about whether there will be enough corn nationally to meet the country’s ethanol mandates.

Strong prices helped push U.S. corn acreage in 2012 to its largest area since 1937. However, drought is withering non-irrigated acreage in other states, sparking fears there may not be enough corn for livestock and ethanol.

Jefferson County

Dennis Bailey, staff chair for the Jefferson County Cooperative Extension Service, said Thursday that corn farmers in the county were looking at a good harvest.

“We’ve already had some corn harvested in the past two weeks and I understand that the yields are pretty decent,” Bailey said. “The only people who may be having some problems right now are those with reservoirs that are getting kind of low. We’ve had a few decent rains recently so the yields on the corn ought to be average or better.”

Bailey said that the more severe drought conditions occurring in states to the west and north of Arkansas have caused severe damage to corn crops in those areas and that this has in turn raised the price for corn significantly.

“We’re looking at $8 corn right now,” Bailey said. “People ought to be able to make enough this year to make some payments and that is what it is all about.”

Bailey said that total farm acreage devoted to corn in Jefferson County is way up this year over previous years.

“I’ve heard that between 80,000 and 100,000 acres are planted in corn this season,” Bailey said.


“The acreage was certainly sufficient, but the yield is not,” Scott Stiles, extension economist for the University of Arkansas System Division of Agriculture, said Thursday. “Over the past month, corn prices have begun the rationing process. One month ago, June 18, the September futures contract settled at $5.37. Wednesday it traded as high as $7.97 – up almost 50 percent in a month.”

On Thursday, September corn was up 15 cents to near $8.10.

“Ethanol is the largest segment of U.S. corn demand now,” he said. “The surge in corn prices has forced some ethanol plants to shut down and some are even liquidating their corn inventories. That’s the only profitable thing they can do at this point.”

Agriculture Secretary Vilsack met with the president on Wednesday about the drought and no decision was made about reducing or waiving the ethanol mandate, an issue that arose during last year’s drought.

Stiles said livestock producers are having to go beyond the borders for feed.

“Importers around the world do have alternative sources of feed,” he said. “These can be found either in the form of other grains or from other origins such as Australia, Russia and the Ukraine. In fact, southeastern U.S. livestock producers have started importing Brazilian corn. Feedlots in Texas and other parts of the Southwest are replacing corn with wheat.”

Irrigation a big advantage

Irrigation has given Arkansas corn growers a distinct advantage this year.

“The U.S. corn crop conditions peaked in early June and have declined weekly since then,” Stiles said. The National Agricultural Statistics Service said 72 percent of the crop was rated good to excellent on June 3.

“Today, that percentage is 31,” he said. “That is the lowest crop rating since 1988 for this time of year.”

In Arkansas, Monday’s NASS report has 63 percent of the state’s corn crop in good or excellent condition. A full 12 percent of the crop was mature, “unprecedented in the last five years,” Stiles said.

Price rise may be slowing

The fact that demand is slowing is the key argument that prices may be at or near the peak.

“Currently, futures prices are trading close to the record highs seen in June 2011,” Stiles said. “Last year, corn futures nearly hit $8 and today’s high so far has been $7.97. Where we go from here will be uncharted territory.

‘Some chart technicians predict the September contract still has another 50 cents to $1 per bushel of upside, but, for now, the market has to penetrate last June’s high,” he said.

The rationale for higher prices depends on the weather for the balance of July. August will be a critical month, but one that’s more important to the soybean market. Based on the weather outlook Wednesday, it does appear that yield estimates for the U.S. crop could decline more. Much of Iowa, Nebraska, and South Dakota are expected to see temperatures around 100 degrees next week. Parts of Nebraska have lost the ability to irrigate due to the dry conditions.

A handful of acres were harvested last week in Jefferson County, but much of the state’s corn is waiting out a few sunny, dry days to ensure the kernels are as near to 15 percent moisture as they can be before the combines run. Farmers in Chicot County planned to try harvesting Monday or Tuesday, but the weekend rain slowed the drying.

For more information on coping with drought, visit Arkansas Drought Resources at or the shortlink,, or contact your county extension office.

Mary Hightower is assistant director of Communications/Marketing with the Cooperative Extension Service at the U of A System Division of Agriculture. Michael S. Lee of The Commercial Staff also contributed to this article.