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Thread: Corn Prices

  1. #41
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    Re: Corn Prices

    Totally agree with the two previous posts. Diminished production and availability will affect supply and scarcity dynamics, which could have a serious impact on prices. Higher corn costs will be peanuts compared to the impact of having less bottles to sell. If production goes down, they will want the same total profit from the lower number of bottles, so they will want to sell the same whiskeys for more money. As long as demand remains high - and, for the foreseeable future, it will - they can and will do this to compensate for lower production.

    Now, is the drought bad enough that it really will systemically impact production / availability for the bigger boys (even Four Roses, Heaven Hill, or BT, not to mention Beam?) That's hard for me to believe, but who knows / we'll see.
    I tell you, we are here on Earth to fart around, and don't let anybody tell you different.
    ― Kurt Vonnegut

  2. #42
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    Re: Corn Prices

    Have distillers ever sourced grain from the southern hemisphere to produce at some level during the winter months? Or are the large producers already doing this?
    Mark

  3. #43
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    Re: Corn Prices

    That's a good question.
    ovh

  4. #44
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    Re: Corn Prices

    Quote Originally Posted by OscarV View Post
    That's a good question.
    Just wondering - I think Argentina is a net exporter of grains - and I think they grow all four (corn, wheat, barley, rye).
    Mark

  5. #45
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    Re: Corn Prices

    Is corn just corn or is there some specific variety the bourbon producers require?
    Jim

  6. #46
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    Re: Corn Prices

    Just number 2 dent corn. Preferably with a high bushel weight. We use some that is close to 60 pounds to a bushel. That mean high starch content. I would imagine they could bring corn in from another country, I think four roses and wild turkey bring in rye from Germany already. Thing is, there is terroir in corn, if you will. This I think is due to how long it takes it to make a crop. In the south and misdwest you have what is reffered to 100 day corn and even some 110 days corn. Here in Ny, we get all 90 day corn. This year we could have had 110 day corn easy though. (0 day corn does not tastes the same in my book. Took a while to find the right farmer. In talking with Steve Nally in Wyoming, that was a challenge for him too. So it could be a problem for the big boys too. But, I am sure in the southern hemisphere there are place to get corn close to what they normally use. We got some polish rye seed from out in Kansas last year to plant here. The supplier called the other day to see how the crop turned out. The rye crop where they are and a lot of other places out there where a lot of rye is grow, was wiped out too. So rye could be an issue. I am hearing 12 dollar a bushel corn and malt is already going up, and I hear will go higher.

  7. #47
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    Re: Corn Prices

    Quote Originally Posted by tmckenzie View Post
    I am hearing 12 dollar a bushel corn and malt is already going up, and I hear will go higher.
    OUt of curiosity, what is corn for you looking at now? I've been following the corn market pretty closely for the past year due to a christmas gift last year, my FIL gave the kids in the family a amount to sell on their own, and it has been a competition amongst us to see who can get the high price. It's been been fun and nerve racking watching the market run up to it peaks within the last two months.

    But $12, wow, that would be shocking.

    B
    "Life is life and fun is fun, but it's all so quiet when the goldfish die."

  8. #48
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    Re: Corn Prices

    8 bucks right now. The farmer we deal with is fairly certain it will go that high. Most corn around here is looking better with recent rain, but it is way behind.

  9. #49
    Bourbonian of the Year 2002 and Guru
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    Re: Corn Prices

    American producers sometimes get rye from Canada. There would be no reason they couldn't use grain from other countries, it's just never been necessary. Remember that distillers mostly get their corn from Kentucky and adjacent states so if they have to go further, they can go to Iowa, Nebraska, Kansas, Missouri, etc., before they have to consider Argentina. Corn is a heavy, bulky commodity, so shipping costs can kill you. You don't go any further away than you absolutely have to and there can be a substantial offset between shipping costs and the grain cost itself, i.e., you'll gladly pay more for corn from Iowa than pay a much lower price for Argentine corn.

    It bears repeating that whiskey makers are near the top of the food chain. That's because they can and will pay higher prices, and can't use substitutes. Feed lots, for example, have other options, including spent mash from distilleries. I predict this crisis will be like the drought that plagued Jack Daniel's and George Dickel for so long. It will get very close to affecting production without actually doing so. (That affected water availability, not corn.)

    The real problems will come if something like this is repeated next year, and the year after that, and the year after that.

  10. #50
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    Re: Corn Prices

    You arer more than likely right. They also deal with farmers on a long time basis, so they will look out for them. I know our farmer keeps us a steady supply as he knows we will pay top dollar for good corn. On another note, I talked to an organoc farmer and corn is that high without the drought. Just cannot justify organic. Mostly hype, and lower yeild.

 

 

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