GREENFIELD, Ind. (AP) — A bountiful summer’s shimmering green fields have given way to the amber gold tassels of fall corn as the harvest season window cracks open within the next few weeks.
But despite a potential record crop, clouds loom on the economic horizon.
“It looks like we’re going to have to work twice as hard for half as much money,” said Ray Kerkhoff, manager of Harvest Land Coop Ag Center in Greenfield.
The culprit: falling grain prices that are failing to keep up with production costs. Figures show that under some conditions at current prices, a farmer could lose more than $300 an acre this year.
It seems that in 2014, the crop likely will be too much of a good thing.
“We’ve got a good crop,” Hancock County farmer Jim Cherry told the Daily Reporter. “It may be the best we’ve seen.”
Thanks to optimal growing conditions, government analysts agree. They think Hoosier farmers might bring in a record haul in corn and soybeans this year.
According to the U.S. Department of Agriculture’s Sept. 8 report from the National Agricultural Statistics Service, 74 percent of the state’s corn is in good to excellent condition, 12 percentage points higher than last year’s crop at this time.
Soybeans are “beginning to turn color and exhibit similar conditions at 70 percent good to excellent this year, versus 56 percent last year,” the report states.
Experts are currently forecasting a record high corn crop of 179 bushels per acre, which would be up two bushels per acre over 2013.
However, Christopher Hurt, agricultural economist at Purdue University, said that number might increase as the growing season closes out.
Current estimates predict production at 1.047 billion bushels, which would be the state’s largest crop on record and only the second time it has exceeded 1 billion bushels, the ag statistics service report states.
Soybeans are currently expected to come in at 51 bushels per acre; however, Hurt said that number could move upward as well to near 52.5 bushels when the reports are updated. That would be a new state record for that crop.
The fields’ abundance, however, seems to be no match for the economic maxim of supply and demand.
With a solid 2013 growing season easing the effects of the drought of 2012, this year’s anticipated yields are driving prices steadily downward.
July 2013 Indiana corn brought $6.71 per bushel, according to the ag statistics service. In June, that price was $4.67 per bushel. The price dropped to $3.90 by mid-July.
Tuesday morning, the price continued to sag with reports ranging from $3.38 to $3.48 a bushel in Rushville, Markleville and Morristown. Bids for October corn Tuesday continued to suffer from downward pressure with Bunge North American in Morristown reporting $3.13 per bushel.
That means farmers are going to have a hard time bring the crop in at a profit.
“Prices will be below the cost of production,” Hurt said. “It’s sharply lower. I think we will see a 30 percent decrease in crop revenues in 2014 with further depression in 2015.”
The price of a bushel of soybeans has also been on the decline, dropping from $15.80 per bushel in July 2013 to $12.80 for the same time this year.
Tuesday’s prices fluctuated by market but averaged just under $12 in the Hancock County area.
“Beans are just all over the place right now,” Kerkhoff said.
And farmers won’t have a firm picture of what their soybeans will bring until they make their initial passes with the combine.
“I’ve combined waist-high beans that look wonderful and got 38 bushels (per acre), and I’ve combined knee-high beans that looked awful and gotten 50,” Kerkhoff said.
Working against the high yields will be the economic drag of additional fuel, labor and maintenance costs associated with bringing the crop in, and at some point, no amount of corn can offset plummeting prices.
“You just can’t make that up,” said Jeff Cherry, who works the Cherry family farm with his father.
Cherry is hopeful that local prices might see a modest boost from regional factors that might develop farther west or with the overseas crop from Brazil. But that too, won’t be known for a while.
What is known is the heady days and big money of $12 corn is gone for the foreseeable future, with farmers and economic experts alike agreeing that adjustments will need to be made.
“We’re just looking at tougher times,” Cherry said. “Corn and beans got too high to be sustainable. We just have to do as good a job in the combine as possible, not waste gas and not lose anything in the field.”
Information from: (Greenfield) Daily Reporter, http://www.greenfieldreporter.com