Illinois Corn Farmers Seek New Markets as Prices Remain Lackluster

Jesse Newman reported in today’s Wall Street Journal that, “Instead of selling all of this fall’s record corn harvest to ethanol plants or foreign livestock farmers, Jim and Jamie Walter are turning a portion into a more lucrative product: whiskey.

The father-and-son Illinois farmers are among a small group finding unique ways to wring money from their crops, while a commodity glut pushes grain prices to multiyear lows. They hope satisfying a consumer shift toward locally made, high-quality products will be more reliably profitable than turbulent global grain markets.

“‘It was obvious to us that it was not a long-term business model,’ Jamie Walter said of the farm’s reliance on crop prices that have swung wildly this decade. Now, the fifth-generation farming family that owns Walter Farms is branching out with their Whiskey Acres Distilling Co., in its third year crafting corn and wheat into liquor for sale 60 miles away in Chicago.”

Ms. Newman pointed out that, “Corn and wheat prices on the Chicago Board of Trade have plunged nearly 60% since recent peaks in 2012. Soybeans have decreased 44% during the same period. As a result, farm incomes have fallen by half from record highs in 2013. Many farmers will lose money this year, economists say.

Graph from The Wall Street Journal.

Graph from The Wall Street Journal.

“Since World War II, grain farmers have sought to boost profits mostly by increasing yields, driving down costs and expanding their operations. Bigger, more sophisticated equipment and high-tech seeds have encouraged a trend toward larger, more capital-intensive farms. Now, growing demand for locally produced food and drinks is coinciding with concerns about volatile crop prices, providing an opportunity for farmers to try shrinking the gap between their crops and consumers.”

Today’s Journal article added that, “Dairies and orchards long ago opened their doors to day-trippers eager to buy artisanal cheeses and apple cider direct from farmers. Livestock producers have introduced heritage breeds and grass-fed animals that put their names on the menus of high-end restaurants. These days, some farmers are converting their grain into booze and flour for baked goods themselves. Growers have opened mills on their farms, or switched to planting grains used to make tortillas and chips.”

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