Record year, but worries remain
WILLMAR -- Record-breaking corn and soybean yields for 2009 were projected Tuesday by the U.S. Department of Agriculture, sending commodity markets down.
However, the numbers tell only part of the story for Minnesota farmers.
"We may have a big, poor-quality corn crop, said Mark Schultz, senior vice president of Northstar Commodity. "A large crop but poor quality."
Liz Niess, director of the federal Farm Service Agency in Chippewa County, said "big yields don't necessarily mean high profits" when crop quality is poor and there are higher-than-expected input costs.
Farmers have "huge bushels but they've got huge expenses," said Wes Nelson, Farm Service Agency director in Kandiyohi County.
The big challenge for farmers is to see if "there's a little bit left over" when expenses are weighed against revenues, Nelson said. "It takes nerves of steel to be a farmer right now."
Even though a record-setting 165.2 bushels of corn per acre was harvested in 2009, test weights were low and moisture was high.
Harvesting wet corn, which was taking place through December because of the cool, rainy fall, caused some grinding of the kernels that resulted in dockage at elevators, Nelson said.
Some of that corn is now being rejected at the ports. Local elevators are "pleading with farmers" to screen their corn before hauling it to market, Nelson said.
Schultz said wet corn that was hauled from the field to elevators received 40 cents to a dollar less per bushel because of drying costs.
There could be more losses at hand if farmers don't monitor stored corn with a close eye for mold and sprouting, Niess said.
When summer sun starts to heat up the bins, conditions could worsen and cause even more discounts once the grain is hauled to the elevator.
Because of hot spots and crusting, some producers have had to pull grain out of bins already, said Nelson, who urges farmers to climb the bins weekly to watch for problems.
Besides the price dockage at elevators for corn, some soybean farmers also had an unprecedented expense of drying their beans this year because of high moisture.
Farmers spent "obscene amounts of money for drying costs," Niess said, which reduced net profits.
With the "sharply lower markets" for corn, beans and wheat as a result of the USDA yield report, interpreting the markets this year will be a challenge, said Schultz, who will be speaking at a grain drying and marketing seminar Tuesday night at the Holiday Inn and Willmar Conference Center.
Knowing that a high yield report would create volatile markets, John Mages, a Belgrade farmer and treasurer of the Minnesota Corn Growers Association, said he'd been quietly hoping Tuesday's report would not show record yields.
Mages said the USDA report may deter some farmers from planting as many acres of corn this spring.
Livestock producers, especially dairy farmers, also had challenges last year, said Nelson. He cited a recent USDA report that said the average net income for dairy producers for 2009 was $9,000 -- a 94 percent decrease from the normal income range.
"Try to raise a family on $9,000 and work the way they do," he said.