With the national average cash price for corn hovering at $1.57 this week and a national average LDP of 47 cents a bushel ... it's easy to see why analysts are predicting a record number of farmers could reach the $75,000 payment limit this year. By the way, the current average LDP is 20 cents above last year.
Pricing strategies, including those that use the LDP, are critical year-round ... but especially during a sizable harvest that's moving quickly forward.
The corn crop is larger than earlier expectations, so farmers are anticipating a squeeze on grain storage.
With about two billion bushels of grain from last year still stored in Midwest coops and elevators, the Illinois Department of Agriculture already is allowing elevators and growers to stow this year's overflow grain in temporary makeshift sites.
Such temporary storage is not uncommon. Several states in 2004 allowed grain to be stored on the ground, due to the huge crop. So far this harvest, 1.2 (M) million bushels of grain in Illinois have been approved for temporary storage. Applications have been submitted for more than 19 (M) million additional bushels.
Last year, the state approved temporary space for 125 (M) million bushels.