Low prices, high input costs, weather have made for a difficult crop growing season
Farmers bank their year on how crops will fair come harvest. With a mixture of a dry year and low commodity prices, agronomist Chris Binstock said this year will be challenging. "It's going to be definitely a tougher year, no question about," sai...
Farmers bank their year on how crops will fair come harvest.
With a mixture of a dry year and low commodity prices, agronomist Chris Binstock said this year will be challenging.
"It's going to be definitely a tougher year, no question about," said Binstock, who works for CHS Southwest Grain. "It's going to be a tougher year for two reasons," he added. "One, it started off to be tougher right off the bat with commodity prices being low. That didn't help the situation. You know typically, based off of history, when commodity drops as low as they do, fertilizer will typically follow that-but it didn't."
High input costs such as fertilizer and pesticides with low commodity prices had many farmers hoping to have high yields to rebound the costs.
"So going into this spring that didn't help our situation," he said. "What made it worse was we started out dry, got some moisture but then the water kind of got switched off."
CHS Southwest Grain Division Manager Jim Bobb called it a complicated and frustrating issue.
"You feel for the farmer," he said.
Bobb is referring to the lower costs for oil and fuel in the Bakken which, at one time, meant higher operating costs. While those prices have fallen, as well as the commodity prices, the farmers haven't seen prices translate into the goods their grains are used for.
Bobb said locally, wheat in 2008 was selling for near $13 a bushel. Meanwhile, bread is now being sold for the same price as the price of wheat sits right around $4. One bushel of wheat can make up to 72 loaves of bread.
"That's what's hard for the farmer to understand. Our commodity price is one-fourth of what it was then, 25 percent," he said.
"Now gasoline-crude oil came down but your price at the pump went down and you felt better and you probably drive a little more, travel a little more," he said. "We aren't seeing that happen and I think that's a lot of heartburn."
He also mentioned how it is harder to export some grains since the American dollar is currently so strong, which has led to storing grains like wheat until there is a marketplace for it.
Another hit for farmers came when a series of storms came through the area in June.
Binstock said the crop year started out looking promising but then it went dry and when much needed moisture came into the area, it was in the form of high winds and hail.
"I've looked at a fair amount of fields," he said. "Some are completely wiped out a 100 percent loss and you get into some other areas and it's not bad. There were some areas were I thought they were going to be pretty much leveled but they're not. (Some crops are) showing signs of hail damage."
He said some of the other crops he's inspected are showing signs of drought stress and while some corn is experiencing onion leafing.
American Bank Center Regional President Bruce Dolezal, who is involved with ag approval loans, said this is also a tough year for the farmers because of finances starting to be depleted.
"We're in our third year of declining commodity prices," he said. "We're seeing that they have burned through that extra working capital that they had. It's getting tighter out there."
While farming, like any other business, is about planning and saving for the tougher years, Dolezal said this year will show who the good managers are in the area.
"One year doesn't affect a good farmer that much," he said. "But when you enter three years of declining prices, when you have declining commodity prices, dry conditions and high input costs, it begins to catch up with you and you can't make money. Every situation is different with farmers. Not everybody is the same, so you find out who the good managers are in tougher times."
Dolezal said he believes some farmers have had to take a long look at their operations and cut back where they can. While this year will be challenging for the farmers and growers most have not let that discourage them.
"Farmers are the most optimistic people in the world because they always say, 'There's always next year,'" Dolezal said.