NEWHALL, Iowa (KWWL) - Iowa produces roughly 2 billion bushels of corn every year and 450 million bushels of soybeans. This year, they can't get here soon enough.
"We are in rarified air right now," Chad Hart said, an agronomist and professor at Iowa State.
The supply of corn is very low in the Midwest right now, mostly due to record exports last year. Hart says China, Mexico and Columbia significantly upped their purchasing of U.S. grain in 2020. Food insecurity during the pandemic also increased demand.
The low supply is a big reason why corn and bean prices are nearing record highs. On Tuesday, the average price for a bushel of corn was $7.20 in Iowa and soybeans were at $16.60. The state has not seen those numbers since 2012-2013.
The other factor driving up price right now is the moderate drought across Iowa; many are worried this year's crop may struggle.
"Those prices are very volatile," Hart said. "We are seeing the futures prices fall significantly today. We've seen a lot of upside volatility because of the drought, but we can also see that downside volatility come back very quickly and hit our prices."
Since very few farmers have crops to sell right now, they are reacting to the market by planting more corn and soybeans. For many, that means choosing top-notch corn and beans instead of crops for livestock.
"We're going away from that and just going corn-on-corn," Ron Franck said, who grows corn, beans, hay, rye, and raises dairy cattle in Benton County.
Franck's fields are mostly around Newhall and he says he's been lucky with rain so far.
"On balance, pretty good," Franck said while surveying his seedlings Thursday.
According to the most recent drought report --released Thursday-- counties in the northwest portion of the KWWL viewing are in a moderate drought: such as Black Hawk, Buchanan, Bremer, Butler and Grundy counties.
The other portion of this falls on the consumers. Hart says the high prices are meant to incentivize people away from buying corn; it's called "price rationing".
"If it's very inexpensive, 'Hey, great, come on in! We've got a lot to sell you, we'd like to have you use it.'" Hart said. "On the other hand, when prices get really high, it's a signal to say, 'Hey, we're starting to run out in some areas or getting worried about it running out.'"
There is rain in the forecast for much of Eastern Iowa over the next ten days. While that will help, Hart says we need sustained rains for a few months.
Franck says despite all this uncertainty, he thinks it could be a very solid year come harvest time.
"If you're lucky to get under some rains, I think it could be a real good year," Franck said.