Dan Martens, an educator with the University of Minnesota’s extension program said baseline minimum prices for corn and soybeans are $5 and $12 per bushel, respectively. However, Martens said that as of the first week in March, corn prices are around the mid-$3 range and soybeans around $9.
«With those prices a farmer doesn’t make a living,» he said.
The low prices means crop farmers will have to make tough choices as the spring planting season approaches.
«(Farmers) will look very carefully at crop production expenses and be very conservative on spending money,» Martens said.
In good market years, Martens said, farmers have the liberty to experiment with different types of crops, fertilizer or techniques. This year’s anticipated market will damper that.
«In a year like this, one has to be careful,» he said.
Predictions for this crop season could fluctuate given multiple factors, Martens said. Anything from the strength of the U.S. dollar which could adversely affect the export market to the demands of the ethanol market and the size of the crop could be decisive in determining the price of crops. As always, weather will also be a contributing factor.
«But barring something major, prices will be low,» Martens said. «Our expectation is that crop prices are likely to stay stagnant.»
For dairy producers, that could translate into lower feed prices.
«Feed prices have remained relatively low, obviously that’s not good, but its not catastrophic,» University of Minnesota livestock educator Emily Wilmes said.
«When prices go lower, farmers will need to be mindful of where they are spending their money,» she said.
Milk prices have fallen significantly in the last six months, from $25.91 per 100 pounds of milk in October to $16.18 as of mid-February. January saw prices in the $14 range.
Wilmes said even though milk prices have been lower than they are now, most milk producers were used to seeing higher prices for their product. However, she said, this market is incredibly volatile and price swings are part of the market’s natural ebbs and flows.
According to Wilmes, milk prices are predicted to bounce back with significant improvement around late summer.
«It will be a different world than last year,» said Albany dairy farmer Steve Schlangen. «Prices are going to be low compared to last year, but not as low as 2012 or 2009.»
Schlangen said he believes legislation passed last year will help farmers out greatly, especially with the turmoil seen in the world dairy market, which he said had bottomed out earlier than the U.S. market.
It is unclear whether falling crop and milk prices will affect prices for consumers.
«What farmers get paid for their milk is not a direct reflection of what people are paying for milk in the store,» Wilmes said.
«Right now farmers are making a profit. Is it a huge one? No,» she said.
Stearns County is the No. 1 county in the state in milk production and sales and ranked 22nd nationwide. Most milk produced in the county is manufactured into cheese and butter.
Source: SCTimes