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Producers probably have more finance worries this year -- unless they also have livestock

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Willmar, 56201
West Central Tribune
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Willmar Minnesota 2208 Trott Ave. SW / P.O. Box 839 56201

Politicians, especially ones out of office, sometimes ask voters if they're better off today than they were a year ago.

With spring planting inching toward completion, it might be time to ask area farmers and ranchers the same question.

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Their collective answer: Probably not, unless we have livestock.

"It's not as rosy as a year ago, not with the way prices are now," says Terry Weckerly, a Hurdsfield, N.D., farmer and president of the North Dakota Grain Growers Association.

Ag producers in northwestern Minnesota generally are more nervous about their financial situation than they were a year ago, says Paul Craigmile, American Federal Bank market president, agriculture and business, in Hallock.

This spring is another year removed from 2007 and 2008, when many farmers benefitted from high commodity prices, he says.

With the gains of 2007 to '08 further in the past, "there's more concern now," he says.

Wheat prices, which have fallen below $5 per bushel, will make it difficult to raise wheat profitably this year, Craigmile says.

With wheat bushels down from a year ago, it become even more important for protein levels in wheat to stay high, Weckerly says.

Low-protein wheat common in the 2009 growing season was hammered with discounts, or price reductions.

Better times

in livestock

But livestock prices have risen in the past year, brightening the outlook for livestock producers.

"The higher prices are helping," says Bryan Nagel, president of the South Dakota Stockmen's Association and a Springfield feedlot operator.

Feedlot profitability already is much improved from a year ago, he says.

Nationally, the average May beef cattle price of $96.50 per hundredweight was up 80 cents from a month earlier and $13.30 higher than in May 2009, the U.S. Department of Agriculture says.

The May hog price nationally averaged $62.30 per hundredweight, up $5.80 from April and $17.70 from May 2009, USDA says. On the other hand, crop prices generally have fallen from a year ago, and in some cases, substantially.

For instance, the national all-wheat price in May was $4.39, down 3 cents from April and $1.45 less than May 2009.

Expenses,

crop progress

Of course, commodity prices aren't the only thing affecting producers' collective outlook.

Expenses are critical, too -- and there's mixed news for producers on that front.

Nationwide, May fertilizer prices were 16 percent lower than in May 2009, while chemical prices were down 5.9 percent from a year earlier, USDA says.

However, May fuel prices were 41 percent higher than in May 2009, USDA says.

Crop and pasture conditions in much of the area generally are better than a year ago, when a wet spring delayed planting.

Two examples:

- USDA rated 92 percent of Minnesota corn to be in good or excellent condition in early May. That was up from 77 percent a year earlier.

- Eighty-percent of South Dakota pastures were rated good or excellent in early May. A year earlier, 70 percent were in good or excellent condition.

But now warmer weather is needed, Weckerly says.

"We need some heat to get these crops going," he says.

Jonathon Knutson is a reporter at Agweek in Grand Forks, N.D., which is owned by Forum Communications Co.

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