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Published September 04, 2012, 10:15 AM

Minn. crops holding on

Agweek took a swing through southwest Minnesota in late August. Here is what some farmers and ag leaders are telling us about conditions on the ground.

By: Mikkel Pates, Agweek

Agweek took a swing through southwest Minnesota in late August. Here is what some farmers and ag leaders are telling us about conditions on the ground.

JACKSON, Minn. — Dan Pike, owner of Dan Pike Auction Co. of Jackson, Minn., says his area is headed for fair yields. “I think we’re going to see probably not as strong of yields as we might have been if we’d have gotten the timely rains,” Pike says. “Still, in many of the fields in the Jackson and Martin county areas, and southern Cottonwood County, we’ve seen some rains. In our areas, the crops look fairly good.

“I think we’re going to see a lot of 150- to 175-bushel corn, versus 160 to 210 bushels in a normal year.” Beans look fairly good, with timely rains.

Pike says a number of land sales are taking place ahead of harvest in his area, and land values remain strong. The number of sales has increased, but demand outweighs. An average-sized farm has grown from about 1,000 acres several years ago to 3,000 or 4,000 acres. It’s a function of larger, more expensive equipment being capable of handling thousands of acres in a season.

“And we’ve seen land in our geographic area go from the $6,000 (per acre) area to the $8,000 to $9,000 range, consistently,” Pike says. “We’ve seen some sales approach the $10,000 level.” Some land sales in northwest Iowa have been in the mid-teens and one even hit $20,000 an acre about six months ago in Sioux County.

Capital gains taxes for some time have been under a 15 percent rate. After Jan. 1, the rate will increase to 20 percent. The largest impact will be on people who have seen value increases on inherited land.

For example, if an acre that was inherited sells at $1,000 more per acre than the value established at the death of the landowner, the heir will pay $150 an acre to the government in capital gains. After Jan. 1, that rate will increase to $200 per acre — a difference of $50 an acre.

“That doesn’t sound like a lot until you’re talking about bigger spreads, more acres,” Pike says. “It’s driving some of the sales, but it’s not every case by any means.”

Not bad, but spotty

BREWSTER, Minn. — Randy Schmitz, Brewster, Minn., raises corn and soybeans, and does custom hog production in a 2,400-head barn. Schmitz thinks the beans will be “halfway decent” in the 45- to 50-bushel-per-acre range in his corner of Nobles County. “Maybe a little short,” he says. His immediate area had good occasional rains through July and into August.

His brothers, who farm a few miles away and didn’t get the rains, are in much worse shape. Corn will likely disappoint. Schmitz usually gets 180 to 200 bushels, but will be in the 150- to 160-bushel range, he thinks, based on visual yield estimates. “Outside in the field looks really good, but you get inside and it’s shortened up quite a bit,” he says.

Schmitz says he’ll get 75 to 80 percent of normal corn yields — “not bad for the price.” He says it’ll mean good returns for less drying costs. His farm is in sight of the New Vision cooperative in Brewster and a Minnesota Soybean Processing plant. He’s a member of both co-ops, which cuts down on hauling costs.

Not our best field

CHANDLER, Minn. — Nick Pieske, a certified crop adviser with Centrol in Hadley, Minn., was looks over a poor field of corn near Chandler, on the ridges and hills to the west of town. This field would turn out to be less than 50 bushels, he said. Most of the poorest fields are being turned into silage for dry cows and heifers whose energy needs are not excessive.

“This isn’t a good representation of corn in the area,” Pieske says. “It was planted more toward the end of the planting season. The dry weather for a two-month stretch really didn’t give this corn much to go on.”

Pieske says the corn yields in the area are highly variable. “There’s going to be 200-bushel corn but some will struggle to make 100,” he says. Soybeans all seem to be doing pretty well. South of Chandler, beans were likely to be 30 to 40 bushels, but more than 40 bushels to the north.

Good soil, fair crop

STEEN, Minn. — Matt Boeve, 34, and his father, Glen raise corn and soybeans, with the help of Matt’s grandfather, Art. In a typical year, the Boeves purchase 10-pound “isowean” pigs, which finish to a 260-pound market weight — about 24,000 pigs a year. They also buy feeder cattle in the fall for finishing.

The Boeves are dry but — with good soil quality — they expect a fair crop. Their corn yields typically go to 200 bushels an acre, but this year, they expect 150 to 175 bushels per acre. “It’s a drought year. The beans? It’s anyone’s guess on them,” Matt says. They normally get 50 to 55 bushels. They caught 3.5 inches of rain on a small part of their farm on Aug. 23, while the South Dakota border 10 miles to the west got nothing.

“The beans are tall, but I don’t know if they’re filling out,” he says.

Some farmers in the area on sandier ground were harvesting more silage than normal, starting in mid-August, because of the drought. Some will use bags, others will pile it in the fields. The Boeves had harvested 100 acres of silage as of Aug. 28.

The Boeves sell their soybeans, but get soybean meal back on the open market, and they feed about 75 percent of their corn to their livestock. They typically market 25 percent. This year, however, they have sold only 10 percent so they can cover livestock needs. “Next summer, if we run out of feed, we might not put cattle in like we did this summer, if the corn’s not there,” Matt Boeve says. “We didn’t go out and buy corn just to feed cattle this year. We also had to do some maintenance on our lots.”

It’s not clear whether crop insurance figures into 2012 crop income. “Our yields might be at the point where we won’t collect much on the way we insure our crops,” Matt says.

Boeve says he isn’t closely following the political wrangling over crop insurance in the farm bill. He says farm values have been strong, although little changes hands in the area. Land rent has gone up, he says, and most people do year-by-year contracts these days, rather than three- or five-year deals. Fertilizer, seed, fuel, all stay high.

“It’ll be interesting to see what happens after a dry year like this,” he says.