By the time this reaches your mailbox, harvest 2025 will likely be complete. Yields in our area have been extremely variable, and for the most part producers are reporting a below average crop. We also experienced a couple of widespread hail events this summer that caused high levels of vomitoxin in the hail damaged fields, further reducing local corn availability for the next year. Vomitoxin is problematic for the ethanol plant due to the fact that it concentrates in our Dried Distiller’s Grains (DDGS) and can be harmful to animals at elevated levels. We have testing protocols in place to monitor inbound corn for toxins and also our DDGS on the backend to make sure that our DDGS maintain quality specs and our marketing options are not limited due to high toxin levels. Vomitoxin is not something our region typically needs to worry about so for all of us this will be a unique challenge in the coming year. We appreciate all of the growers that have worked with us this fall to identify, segregate and manage grain flows in order to ensure we can keep the plant running efficiently while maintaining co-product quality and market access.
On the national level, the Federal Government is currently still shutdown. Due to the shutdown, we did not receive an October Supply & Demand report and it’s beginning to feel like we could miss the November report as well. Market prices and spreads currently suggest that yield reductions are expected when we do eventually see government reports again, but keep in mind that production reductions typically also come with demand reductions. Also recall that the USDA significantly increased the carryout from last year in the most recent grain stocks report. Given this, even a meaningful government decrease in corn yield will still leave the U.S. balance sheet in a comfortable position. This means that a rally towards significantly higher prices will be difficult to sustain. It would likely take a South American growing issue this winter and a de-escalation of trade tensions to break us out of this low-price range.
As always, please feel free to reach out to Sara or myself with any contracting questions, or to get set up with the CVEC customer online portal or mobile app. Thank you all for a successful past year and we’ll look forward to Fiscal Year 2026.