The new forecast from the U.S. Department of Agriculture shows American farmers will likely harvest a record corn crop this fall. But that news is keeping the price of a bushel low enough that Minnesota's flood-diminished crop is unlikely to yield a profit.
A University of Minnesota grain marketing specialist tells MPR News he calculates it costs the state's average farmer $4.50 to $5 to produce a bushel of corn. With market prices steady in the $3 to $4-per-bushel range, Ed Usset says this is shaping up as a tough year for corn farmers.
The USDA forecast for Minnesota says corn farmers can expect to harvest 168 bushels per acre. That's more than last year but MPR notes it's about 20 bushels less than their peers in Illinois and Iowa. Those states did not suffer as much from June's record rainfall, which dropped as much as a foot of water on Minnesota fields.
Lots of soybeans, too
The new forecast shows Minnesota's soybean production rising 15 percent from last year. The Wall Street Journal reports the nation is headed for the biggest soybean harvest in history, now that the summer rains have replenished soil moisture in parts of the Farm Belt that had been parched.
The Journal says the big soybean forecast pushed prices down 2 percent Tuesday, but MPR says bean prices remain high enough to help Minnesota farmers offset corn losses.
Grain headed for storage
The Associated Press reports the big crop and relatively low prices make it likely more grain will go into storage until prices rise.
The AP says railroad bottlenecks and new storage methods are other factors that have pushed farmers toward storing grain. Permanent on-farm grain bins are letting farmers exercise more control over when they send their crop to market.
Another storage method that's spreading is plastic bags. The AP story says the plastic tubes when filled are 8 to 10 feet in diameter, can be as long as a football field, and can store grain for months. The story quotes Richardton, N.D., farmer Craig Fisher, who sells the bags:
"It's fundamentally changed farming for me. I can farm all I can handle now and not worry about bottlenecks. I can store it in the bags and worry about trucking it later."
While the low corn prices are a problem for farmers counting on a cash crop, they're good news for those raising livestock. It's reduced the price of feed for dairy, beef, and pork producers.
The early summer washout has made forage for livestock scarce in parts of Minnesota. The supply of feed is reportedly down 40 percent this year in seven Minnesota counties where federal officials approved emergency haying and grazing on land enrolled in the Conservation Reserve Program.