Minnesota corn farmers like Ryan Buck managed to have a decent 2013 despite a lot of challenges from Mother Nature.
But another variable farmers can't control — prices — has been trickier, swooning from $7 to $8 per bushel in drought-stained 2012 to the current $4.25 on the heels of this year's bumper U.S. crop. Price forecasts for 2014 are all over the map.
Corn is Minnesota's largest crop, and the state is the nation's fourth-largest grower of the golden grain. Buck is president of the Minnesota Corn Growers Association, a yearlong post held by a farmer.
The 31-year-old farms 1,200 acres in Goodhue County near Red Wing, raising corn and soybeans.
The U.S. Department of Agriculture will release full-year harvest tallies next month, but data in November showed that Minnesota's corn farmers expected to come in with production and yields a bit below last year's marks.
Still, that's not bad considering that in early May — when farmers would normally have at least a third of their corn crop planted — virtually no corn was in the ground due to cold, wet weather. Buck had 16 inches of snow on his fields.
Q: How was the quality of this year's corn crop, particularly given the late start?
A: The late planting had kind of a snowball effect, and conditions were never ideal. So for the growing season we had, the crop was pretty good. Part of it was luck, but it also has a lot to do with the technology of seed these days. The seed companies have bred hardiness and the ability to withstand more weather conditions into the seed.
Q: Corn prices have hit at least three-year lows recently — what sort of effect has that had?
A: Most farmers sell some grain forward in futures markets earlier in the crop year, and early this year, corn prices were higher than they are now. For 2013, I would think most farmers still did pretty well.
Q: I've seen forecasts calling for corn prices to do everything from rise to $5 per bushel to fall to $2.75. What do you think?
A: For the winter months, I think it will hold around where it is. Once we get into planting season, it will be a weather-driven market. If in June or July it looks like a bumper crop in the fields, we could see the price of corn drop into the $3 range.
Anything less than $3.50 to $4 a bushel will be below the cost of production, depending on the farmer. Every operation is different. I would hope we never get back to $2.50-per-bushel corn. But I think that every time you think you have the market figured out, it does something different.
Q: With lower grain prices and farm income, do you expect fewer purchases of tractors and other equipment in the off season?
A: I was talking to the equipment dealers, and they said sales are good through the end of this year. But they are anticipating it will tighten up in the next year. They're ordering less equipment than in previous years.
Q: Have falling corn prices put a damper on the soaring price of farmland?
A: In our area, there have been a few land sales that have been below the high. Prices seem to be coming down. But as for rents, I haven't heard of rental rates coming down. Hopefully that will follow.
Q: Are you seeing more grain in storage this year, as farmers wait for a better price?
A: Yes. Farmers have built a lot of on-farm storage in recent years. It's given them the ability to hold on longer and wait for rallies. I built a new bin two years ago and added 85,000 bushels of storage, about a 15 percent increase.