Fertilizer maker CF Industries expects U.S. corn prices to range from $3.50 to $4.00 a bushel for the long term, Chairman and Chief Executive Stephen Wilson said on Tuesday at the Reuters Food and Agriculture Summit in Chicago.
"We know it is a commodity," Wilson told Reuters. "We know it will be lower than that at times, and will be higher than that at times, but it seems like we have settled into a range where it is high enough to provide incentive to farmers to plant, and it is low enough to make ethanol producers at least cash-positive."
Corn prices have fluctuated wildly during the past few years amid growth in the ethanol industry and concerns about crop size due to variable growing conditions around the United States.
The spot-month Chicago Board of Trade corn futures contract peaked at $7.65 a bushel in the summer of 2008, when flooding in the Midwest caused widespread damage to crop land around the Corn Belt and soaring oil prices boosted expectations for ethanol development.
"That was a scary scenario for us because we like high demand for corn," Wilson told Reuters. "As the price rose, we got into a mode where demand destruction occurred in two pockets: one is ethanol, and the other is in livestock."
