Up Front: GOLDEN HARVEST
IT'S A-MAIZING: FOLKS CAN'T GET ENOUGH
CORN IS MAKING A COMEBACK--much to the surprise of Wall Street and to the delight of seed and fertilizer companies. Both had figured that last year's abundant harvest would cause farmers to cut back their crops in response to lower prices. Besides, how much corn could the world consume?
As it turns out, plenty. Of last year's colossal 10.1 billion-bushel crop, the feds expect the marketplace to gobble up all but 1.6 billion bushels. And 1996's surplus is forecasted to be even smaller. The high demand for products such as animal feed and corn syrup, coupled with strong exports, has driven corn futures up 26% since November, to $2.66 per bushel as of May 16. Seed and fertilizer companies are relishing the boom. "For investors, this is going to be a great place to be," says David Nelson of NatWest Securities, who is bullish on Pioneer Hi-Bred, DeKalb Genetics, Potash of Saskatchewan, and IMC Global.
Mother Nature has also helped Corn Belt suppliers. A soggy spring delayed planting, holding down yields and setting the stage for a banner '96. Chicago-based Vigoro will be ready, vows CEO Robert E. Fowler Jr. The fertilizer company recently acquired a potash mine, expanding capacity 60%. If the weather holds up, corn fields could be popping up all over the place. EDITED BY LINDA HIMELSTEIN, WITH OLUWABUNMI SHABI Greg Burns