spirithorse21 | Crop prices?

Today in the headlines: Rain's toll on crops heavy

http://www.indystar.com/apps/pbcs.dll/article?AID=/20080611/BUSINESS/806110391

Indiana has been hit by devastating storms this past week, as has most of the midwest since about Mid April. Farmers further west of here haven't been able to get their fields planted or have suffered great losses from the rains. Farmers here in Indiana had their crops in, but now thousands of acres of land are underwater and probably lost for the season.

This in contrast with sky rocketing crop prices--due in part to the weather, and in part to eco fuels. Farmers over the past few seasons have been clamoring for more land to plant as they want to reap the benefits of high yields and high prices. Of course, the prices are soaring even higher now that so many fields have been devastated. The few who manage to pull this growing season off in even an average way will be seeing a bumper year in profits.

It just strikes me as an interesting paradox. Just last night I was reading my June edition of Progressive Farmer, which features an article about farmers removing their lands from the Conservation Reserve Program (CRP) and putting those acres to crop. Why? It would be stupid not to, from an economic standpoint. The prices of crops versus the pay out from the CRP is too great! For many years, it was smart to keep land in the CRP--they paid well, often much better than the open market would for crops. But now, as demand raises the price of corn, soybeans, wheat, and other crops, farmer are making the only smart economic choice they have--plant those fields.

Yet here we are. Land prices are astronomical, crop prices are the best they've ever been, and most of the land in the midwest is underwater! What a paradox. What a very sad paradox. My heart goes out to all the farmer that will be hurting this year due to the weather. On a brief tour of our land on Sunday, it appears that we will be fine. Our land is on high ground with exceptionally good tile under it. Everything is draining well and the crops look great. Our one disaster is the hay field. It is our first year growing our own hay. While the field looks great, we have yet to get in for our first cutting because the water content is so high and because of the exceptionally wet weather.

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No bumper year in profits if you consider that the prices of fuel, fertilizer, and seed have risen proportionally more than crop prices.

The prices *are* at record highs, but many farmers will actually bring in less profit than last year the way things are going now - and that's *if* they raise average yields. In our area, only %60 of the corn crop has been planted and around %30 of the bean crop. That's an entire month behind the usual schedule, and last year we had our entire farm planted by the beginning of May.

It's going to be an interesting year for many farmers, I think. Those who can hang on and minimize costs to maximize efficiency will be in good shape. The rest? Well, I suspect many small farms are facing the edge of bankruptcy.

I meant to add: what worries my husband and the other farmers in our area is the chance that input prices will remain high into next season, while prices may correct back to lower levels. That will leave farmers paying more than many can afford just to put in a crop suddenly worth less than it costs to plant.

This is why we are fanatics about saving money, and why we never borrow money. :D

That's very smart of you. It's scary, isn't it? I think you're right though, and then all those that disenrolled from the CRP are going to up a creek without a paddle. Troubling times, very troubling.

You are so right. I forgot to mention the costs of production and upkeep. It just boggles my mind that "we" talk about a bumper year and high crop prices without figuring the other costs.

I hope you all come out ok this year.

And thanks for responding. I always enjoy having your input, especially on the agricultural discussions.

:D I'm so glad you post things like this, because I enjoy talking about it with people who actually care. :)

I think (I hope!) we will be okay. My husband and his father are *very good* at planning ahead and we're so very fortunate that we don't have to borrow money (yet) to put in crops. That helps minimize some of our risk. And we sat down a few years ago to set up a household budget - that way I can afford to stay home with my kids, but we can save as much money as possible to reinvest back in the farm. That helps, too.

The thing is, farming is a gamble. Even in the best years, you don't know what the markets will do or where the prices will go. And when you throw weather uncertainties on top of all that, the game gets a little dicey sometimes. It makes me nervous, but my husband takes it all in stride and we just keep going.

I do hope I can make enough money off my writing, someday, that I'll feel like we have a safety cushion for retirement. I know it's a long shot though!!

this is so bad :( first drought, now storms!

I know. Exactly what I thought.

Whoever says Global Warming is a myth should consider the weather the last few years. I don't think this is a lingering effect of La Nina, I think it's a general raising in the earth's temperature. It's disrupting weather patterns around the world and I think it's only get worse in the coming years.

oh it will get worse, for sure- but im of the belief that global warming, as we know it, is actually a natural cycle, but our pollution has sped it up to a degree that life cannot cope with the speed of the changes- and im not sure what we could do, or if there is anything to do, that could actually slow it down now.

Totally agree with you. I don't know if we can change it, this is going to be a rough ride for a while.

scientist amuse me.
They screech due to global warming, while the geologist say that geologically speaking we are just coming out of an ice age.
Of course it's getting warm. Warmth melts ice.
And we aren't helping to slow the process down.

We had our dryland alfalfa in CRP, which is right around 90 acres, and we usually get $370. for it off of CRP.

But it's not worth haying it with the price of fuel, so we just turned the cattle/horses out on it, and hay the irrigated crops.

Looks to me like there is going to be allot of silage in our area, the corn is in, but it looks sickly, not enough sunny weather, and to much moisture, although we are not flooding yet. But it's expensive to cut silage, it's around $300. a ton and corn is $60. a acre to harvest. That and you don't get allot of feed in silage after you pack it down.

I noticed that the grass is already starting to head out, and it's not very tall at all. We were hoping that after it headed out it would grow just a little more. Noticed that the winter wheat is headed out already.

We still have Sudan and Millet to drill yet, but we still have plenty of time to drill it.

ya'll are having a problem with too much water, while our 'not enough water' situation is steadily rising again.

Climate change, anyone???

You also forgot to mention government subsidies, and crop insurance.

Um...sorry? This was just my perspective on a situation. If you'd like to add something helpful about government subsidies and crop insurance go ahead. But I covered exactly what I wanted to cover.

My ex husband was a corn producer, we had right around 1500 acres of irrigated corn, and some soybeans.

But from the year 2003 to 2005 he made $563,000. on government commodity subsidies, none of his land was in CRP. I know that they are making it harder for producers to get government subsidies, like the big corporate farmers.

There is a website where you can go and check out how much producers make off of government commodidty subsidies. I know last year alone Danielski Harvesting & Farming made $120,000. last year off of commodity subsidies. We made $3000 off of government subsides last year.

The website link is http://farm.ewg.org/farm/top_recips.php?fips=31031&progcode=total_dp&yr=2007

Or you can look here to see that commodity outpays conservation quite a bit by just what Danielski Harvesting makes a year. So why put it in conservation when commodity pays so much better? They farm our two circles, so I know them quite well. They're a big corporate producers.

http://farm.ewg.org/farm/persondetail.php?custnumber=006373288

Crop prices?

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