The Jacobsen has heard through the grapevine that organic corn farmers are frustrated by the drop in organic corn prices and need to sell down their old crop inventory to make room for new crop organic corn. Organic corn prices are hovering near the $8/$8.25 level for old crop picked up at the farm in the mid-west. Prices hit multi-year highs at $10.50 a year ago, but a robust 2018/2019 harvest weighed on organic corn prices.

What farmers fail to remember is that organic corn prices picked up at the farm where even lower 3-years ago. The organic corn swap has a three-year range which peaks near $10 and has a floor near $7.5. The average price of the organic corn swap during the past 3-years is $8.67.

For farmers, the current organic corn price of $8.00/$8.25 is only 5% of the long-term mid-price. The question for organic corn producers is whether this price is historically viable. If you can lock in $8.67 over time, can you consistently make money? Based on the costs to produce organic corn, relative to conventional corn, the answer is likely yes, according to the Jacobsen insight.

There is some seasonality to the organic corn swap. It appears to peak in the Q1, with an average corn swap price of $8.77.