“Record crop yields are expected again throughout Minnesota in 2016 as farmers close in on the final days of fall harvest,” the Le Sueur News-Herald reports today.
Viewed from the city slicker perspective, this is great news. A bountiful harvest! Bring on Thanksgiving!
It’s the second time in three years of record crops for corn and soybeans against the occasional news stories that indicated times were tough for farmers because it was too wet or too dry or too hot. The end result? A record harvest.
There are exceptions.
“An auction sale in March is a real possibility,” owner Jack Hedin, who founded an organic farm in 1997 and is losing money on the farm the old-fashioned way. “This was our worst year ever. It was a catastrophe. It looked like a nuclear wasteland, some of these fields.”
Steady rain over the summer has wiped the farm out, according to the Winona Daily News.
Understanding the farm economy is beyond the ability of mere mortals.
The bountiful harvest apparently means many farmers will struggle.
But despite the record production, the University of Minnesota Extension Service notes farm income is expected to dip due to low commodity prices for corn and soybeans.
Corn was at $2.84 per bushel at United Farmers Coop (delivered Nov. 16) and soybeans were set at $9.01 per bushel. At Traverse Elevator in rural St. Peter, bid prices for Nov. 30 were a bit higher, at $2.88 for corn and $9.11.
The break-even price for farmers growing corn is $4 per bushel. And so, as the Star Tribune reported last week, farmers tighten their belts in a bountiful harvest.
In a report earlier this year, the University of Minnesota’s Center for Farm Financial Management reported that despite record crop yields in 2015, net income for Minnesota farms continued to decline that year to the lowest point in 20 years in inflation-adjusted dollars. The study analyzed data from nearly 2,200 crop and livestock farms included in a database representing a broad cross-section of Minnesota production agriculture.
Of those, crop farmers saw slightly higher earnings because of the record yields in 2015, the report said, but incomes remained low by historical standards.
Part of the problem is oil prices are low so the effort to inflate the price of corn by creating a demand for ethanol — and therefore corn — has stalled.
In short: There’s too much of what farmers grow. What’s good news for many of the rest of us is bad news for agriculture.
Energy prices will have to go up. Record and bountiful harvests will have to go down.
How does any mortal make sense of that?
Related: Selling the farm not as easy as it sounds (Rochester Post Bulletin)