There seem to be more questions than answers on the local agricultural scene at the moment. Will corn and soybean prices, not to mention the milk price, improve this spring? How long will the higher beef prices hold? What about the contracted prices for next fall’s corn and soybeans? Will the dollar weaken and improve export markets for agricultural products? Will growers in other parts of the world face challenges that limit their production? How should producers participate in the new Farm Bill programs?
The only thing that seems certain for local farmers going forward is that the new year will definitely bring some new challenges.
Perhaps, the place to start is with the end of last year. Corn and soybean prices deteriorated this summer as a bumper crop kept growing across the nation and overseas. Some farmers benefitted from sales contracted in early spring getting prices like $4.50 per bushel for corn, but when the harvest came the cash price for corn dropped below $4 per bushel and approached $3.50. There was a bit of a post-harvest bump in prices, but lately they seemed to have returned to an area well below $4 per bushel. Soybeans have followed a similar, but not identical, pattern.
Crawford County Ag Agent Vance Haugen confirmed what is painfully obvious to many. It’s about impossible to make any profits on corn priced at $3.50 per bushel or less.
Much of the corn that wasn’t contracted remains in storage on the farm or at the grain elevators in Prairie du Chien and elsewhere, according to the USDA Farm Service Agency County Director John Baird.
Local commodity grain farmer Daryl Aspenson and his sons are like many in the area. The Aspensons sold the grain they had contacted and are now holding a large part of the crop in storage on their farm waiting for an opportune moment to make a sale.
“That’s how farming is,” Aspenson said of the current corn and soybean pricing in an almost philosophical tone. “It’s always like this. You have to make money in good years to survive the not-so-good years.”
How was the growing year?
Well, maybe not as great as many thought. Aspenson said that cooler weather toward the end of the growing season might have resulted in a lighter corn that did not weigh out as well. He said the corn yields were good, but a little less than expected. The Aspensons averaged about 167 bushels per acre about 10 less than they thought they would get.
Perhaps, the areas to the south in Illinois and Kentucky had a little warmer weather and that resulted in very high yields, including reports of 270 bushels per acre.
The Aspensons’ soybean yield of 44 bushels per acre was also very average for them.
Another problem for local corn growers is that their input costs for seed, fertilizer and herbicide are not decreasing. Those high costs are having a greater impact with the lower price being offered for the commodity.
Another increased cost in this year’s corn harvest was the need to run corn dryers to bring down moisture levels in harvested corn.
Just about everyone from the USDA to local feed and seed store operators and the farmers themselves are discussing a possible increasing acreage of soybeans this season.
“You could see some corn acres going to soybeans from the standpoint of lower input costs,” said Chris Olson, from Olson Feeds in Seneca.
However, Aspenson said he and his sons would go with half corn and half soybeans on the 2,000 acres they farm. Lots of that land is rented, and Daryl Aspenson is hoping to talk to landowners about reducing rents in light of the lower commodity prices.
“Lot of the people we rent land from are friends and acquaintances,” Aspenson explained. “They’re pretty cognizant of what’s going on. Rents can’t stay up, when you can’t cut the cost of the inputs.”
It’s not just the row crop farmers facing challenges though. Dairy farmers who enjoyed a very high milk price throughout 2014 saw that price drop precipitously last month.
The Class III Milk Price, which exceeded $25 per hundredweight at times in the preceding year, had fallen to around $15 in January. Haugen, who operates a dairy farm in addition to serving as the county’s ag agent, thinks there are chances of a rebounding dairy price this spring.
Haugen’s mailbox price for milk sold in December was $23 cwt. and best guess for January was $17 cwt. In the boom or bust of milk prices, Haugen quickly pointed out that average pay price in 2009 was $13.35 cwt. And five years later, the average pay price for 2014 was $26 cwt.—essentially a 100 percent difference.
“It was the best year ever for dairy farmers,” Haugen said.
A drought in New Zealand is lowering production in that large milk-producing country and it may lead to more demand and higher U.S. milk prices this spring, the local ag agent explained.
The immediate effect of the falling milk price is often increased production as farmers try to make up for lost revenue. That 10-15 percent increase lasts for a short time until producers decide to cull some cows. The current higher beef prices may lead producers to culling cows sooner.
Haugen explained one strategy could be to cull the bottom 10 percent of the herd in terms of milk production and feed the remainder better.
Because it takes two years for a calf to grow to an adult cow, the high beef prices following the 2012 drought and sell-off are still with us.
The current U.S. cattle numbers are reported to be at a 60-year low. The high prices these low numbers are stimulating are definitely helping the often smaller producer found in Crawford County, according to Haugen.
However, recent USDA reports do show a growing beef herd in the country.
Things are a little different for local vegetable growers, like Driftless Organics. Mike Lind, one of the three owners of the business, said it was an awesome growing year for lots of crops and a crew of 11 people continues to clean and pack vegetables that have been stored since fall.
Driftless Organics recently finished the last of the cabbage that they were storing, but they are continuing to clean, package and ship carrots, potatoes, parsnips, beets, turnips and radishes.
The root and brassica crops are stored in bins like those used in the apple harvest. At the end of the season, Driftless Organics had 450 full bins. They currently have 150 bins left to clean, pack and ship. The crew will probably continue to work until the end of the month and will then start working the greenhouse in early March, according to Lind.
While last year proved to be a great year for many of Driftless Organics’ signature crops like potatoes and some of the other crops already mentioned, some crops struggled.
A second crop of tomatoes never worked out. Melons lacking heat did poorly.
However, it was an outstanding year for broccoli, of which the organic grower had eight or nine plantings. That’s well beyond the usual six plantings and cauliflower lasted in the field until November. It was also “a banner year” for carrots and the growers filled 134 bins.
Next year, Lind said the farm will do lots of the same things, but may grow less specialty peppers that are less well known. He thought more cabbage might be in order, since they sold out this year.
During the season Driftless Organics will employ 16 full-time workers and contracted weeding crew of six to eight people that works as needed.
Well, any final advice to the farmers on the coming year?
“Put it down on paper,” ag agent Vance Haugen said. “If it doesn’t work on paper, it’s probably not going to work in the field.”