Heat, drought leaves SD corn price high, quality low
Corn prices are currently sitting near $6.60 in South Dakota, a stark increase compared to the same time each year since 2013.
Temperatures in the region have been abnormally high since the beginning of June, averaging around 15 degrees above normal. Three record highs have been recorded this month for Mitchell, most notably June 16’s 106-degree temperature.
The high temperatures have only contributed to the continuing drought plaguing the Upper Midwest. The U.S. Drought Monitor estimates that almost 90% of South Dakota is in some form of drought — with 57% of the state suffering from severe or extreme drought.
Eric Zell runs a 10,000-acre multi-use farm just south of Cavour, S.D. , where he and his family raise livestock, grow crops and even run a hunting business. About 6,500 acres of the farm is dedicated to growing corn and soybeans.
“The extreme heat this year, the amount of high temperatures for this early in June is not normal,” Zell said. “That excess heat comes on top of being dry to begin with.”
The drought is just one factor contributing to the already high prices of corn in the area. Zell said a surge in demand both domestic and abroad is quickly diminishing local elevator supplies.
“COVID has had a lot of things shut down,” Zell said. “Countries want to make sure they have enough supply to take care of their needs. A lot of countries and businesses are trying to stock up now for fear of being short on their supplies.”
Corn prices are currently sitting near $6.60 at most elevators across South Dakota, a significant jump compared to national averages the same time each year since 2013.
Representatives from CHS and Agtegra did not return calls for interview requests to discuss current prices and supplies.
However, supply is not the only thing that Zell believes could affect the future market.
As moisture levels have continued to drop, so have the quality of crops. USDA Crop Progress Reports estimate over half of planted corn in South Dakota is fair quality or worse, compared to only 18% over the same period last year.
“If enough of the crop is damaged then the market is going to continue to go up,” Zell noted, “and if we don't get any more rain we won't get any more crops.”
Dry conditions, especially from the lack of rain, can lead to higher bug infestation rates of corn, soybeans and other commonly grown crops. An article published by SDSU Extension highlights the increased possibility of spider mites, specifically, who “thrive during periods of dry weather.”
Zell said he’s keeping watch for signs of bug infestionations, and is prepared to use pesticides, though he would prefer to avoid doing so.
“We’re in a volatile time in the marketplace right now because of all the unknowns,” Zell said, but added that the only real impact to the average consumer is a slight increase in beef prices at the supermarket.
With corn prices high, it may be easy to believe that farmers are reaping the benefits, but Zell made clear farmers do not always enjoy the seller’s market.
“We as farmers don’t like the market to get out of hand. We would rather raise a decent crop and get a decent price than raise a low yield and make good money out of poor quality,” Zell clarified.
Data from the National Weather Service shows Mitchell is about two inches short of normal rainfall values this far into June, with no more chances for widespread showers in the five-day forecast.
Zell asked the public to pray for rain, adding that a good string of showers would mitigate many of the issues presented by the continuing drought.