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Thread: Corn Prices

  1. #31
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    Re: Corn Prices

    I saw an article today that many Indiana farmers are plowing over the corn crop now to use as feed, but if there are some late July or early August rains, they might plant a fall crop of winter wheat or rye. Oats was another possibility.

  2. #32
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    Re: Corn Prices

    Thanks for all of the responses to my original questions. I had assumed that since corn is one of the primary components of bourbon that an increase in corn costs would cause an increase in the cost of the whiskey. Television shows I have watched on bourbon production show trucks lined up to drop their corn loads but have not shown the trucks delivering bottles or the spinning of the gas and electricity meters serving the production area. After reading all of the responses to this thread it makes sense that the corn price is a small percentage of the overall cost of the production. I don't know why I didn't come to that conclusion myself.
    Jim

  3. #33
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    Re: Corn Prices

    For some reason, glass cost is rising faster than the price of corn.

  4. #34
    Bourbonian of the Year 2002 and Guru
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    Re: Corn Prices

    Just guessing, but I imagine glass prices are very sensitive to energy prices. I don't think the price of sand has gone up. Then again, natural gas prices are low right now, so it could just be a response to demand. That's the best time to raise prices, periods of high demand.

    As for corn prices, what we've said is general and applies most to brand marketers. Corn prices affect Brown-Forman's or Beam's business much less than they do Heaven Hill's or Buffalo Trace's, because the former's business is based on efficient, high-volume production of a few strong brands, while the later is much more dependent on commodity-type products. The former's business is less price-competitive while the latter's is more. different business models are affected differently.

    One thing I haven't followed but probably should is the co-products (aka by-products) business. Distillers, both for beverages and fuel, are producing more, which means more animal feed products based on spent grain. The energy cost of drying the grain tends to keep that price high, but with natural gas prices low, corn prices high, and distiller's spent grain plentiful, that business may improve.
    Last edited by cowdery; 07-27-2012 at 13:51.

  5. #35
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    Re: Corn Prices

    David Driscoll just posted a piece on this topic, with a quote from BT setting the expectations to higher prices (I think based on our discussion - because people are talking about it and they CAN). Quick -destroy this thread!!! Interested to hear what he comes back with in talking to some others.

    http://spiritsjournal.klwines.com/kl...t-bourbon.html
    Gary
    =-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
    "Too much of anything is bad, but too much of good whiskey is barely enough." - Mark Twain
    "Because Whiskey Matters!" - David Perkins

  6. #36
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    Re: Corn Prices

    Grrr...

    Still though, I just can't see it being any kind of substantial increase. Waiting, seeing.

  7. #37
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    Re: Corn Prices


  8. #38
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    Re: Corn Prices

    After reading that article my question is, high corn prices aside will the distilleries get all the corn they want and not cut back on production?
    Let's hope so because the world wide demand for bourbon goes up every year.
    ovh

  9. #39
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    Re: Corn Prices

    Quote Originally Posted by OscarV View Post
    After reading that article my question is, high corn prices aside will the distilleries get all the corn they want and not cut back on production?
    Let's hope so because the world wide demand for bourbon goes up every year.
    And if not, diminished production will impact the prices way more than the price of corn. Fingers crossed!!
    Gary
    =-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
    "Too much of anything is bad, but too much of good whiskey is barely enough." - Mark Twain
    "Because Whiskey Matters!" - David Perkins

  10. #40
    Bourbonian of the Year 2002 and Guru
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    Re: Corn Prices

    Rutledge's point bears repeating. Higher prices aren't really the concern. Availability and quality are the concern. Bourbon makers use so much corn, their on-site storage holds, at most, a one or two day supply. If they don't get deliveries every day, they're shut down. Happily for us, producers won't hesitate to pay however much they have to pay to get what they need (#2 dent) when they need it. But what we don't know is how bad the drought is ultimately going to be and how long it's going to last.

 

 

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