South-central Indiana farmers who planted soybeans in the spring probably had a pretty good year.
But for corn and wheat producers, the nearly completed harvest will neither be memorable nor very profitable, said Jason Newton, owner of Richards Elevator in Taylorsville.
Newton summed up crop prices for farmers in a nutshell: soybean prices are good, but corn and wheat prices have been average.
However, average is not what it once was.
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Since 2013, there have been a series of bumper crops for most of the United States.
Another nationwide record harvest is anticipated this year, with two billion more bushels of corn and soybeans compared to 2015, The Wall Street Journal reported this week.
That has benefited supermarket shoppers. Over the past year, a government index measuring grocery prices has fallen 2.2 percent, the largest decline since December 2009.
Excluding the height of the Great Recession, 2016 has brought the largest streak of food-price deflation since 1960, Bloomberg reported.
For local farmers, the crop surplus translates into a fourth consecutive year of low grain prices. The massive supply of wheat brought prices to a 10-year-low earlier this fall, according to the Hackett Money Flow Commodity Report.
“I don’t see much relief coming for farmers for another two to three years,” said retired Columbus farmer Lynn Glick, 87. “It’s tightening the belt and hanging on.”
For grandsons Trevor and Brett Glick, who have taken over the Glick family farming operations near Hartsville, belt-tightening means maintaining their current combines and tractors, instead of investing in newer, more expensive equipment, Lynn Glick said.
He has also reduced rent payments for his grandsons, as well as agreed to wait until December to receive payment, Glick said.
Details on the local 2016 harvest won’t become available until after the National Agriculture Statistics Services conducts its end-of-season surveys during the first two weeks in December.
However, it does appear that factors such as soil types, scattered precipitation and planting dates worked considerably better for some south-central Indiana farmers than others, Newton said.
For example, with 180 bushels per acres considered an acceptable average for corn, yields from individual Bartholomew County farms ranged from 140 to 235 bushels per acre, Newton said.
But yield isn’t everything. Investment is another factor that plays into a farmer’s profit picture.
It costs a farmer about $700 per acre to plant corn, compared to $500 for soybeans. That level of cost makes it more difficult for farmers to reach what many consider to be a common goal of a $40 an acre return on their investment, Newton said.
“Corn is a lot more expensive to grow,” said Will Swope, who farms with his father-in-law, Evan Clouse, south of Hope.
In addition, raising corn has gotten a bit risky in the Hoosier state.
While Diplodia ear rot has become a common disease in Indiana corn, Newton said the mold has been far more prevalent in the northeast part of the state than in Bartholomew County.
Most of the disease was limited to crops that were planted early in the season, so the ear rot did not have a significant impact on local corn yields or prices, Newton said.
But the warmer-than-normal spring, as well as above-normal precipitation this fall, did reduce yields from what many farmers had hoped, Newton said.
More grain is produced when there are alternating periods of moisture and heat, he said.
It wasn’t until harvest time that it became evident that expectations by Swope and Clouse for an exceptional corn yield wasn’t going to happen, Swope said.
On the bright side, the laws of supply and demand greatly benefited soybean growers in 2016, Purdue University agricultural economist Chris Hurt said.
Now used for a variety of non-food products ranging from bio-fuels and solvents to plastics and emulsifiers, soybeans are globally in high demand, he said.
China buys almost two-thirds of the world’s soybeans every year from two main markets: South America in the spring and North America in the fall, Hurt said.
But after bad weather caused South America to experience a lackluster soybean harvest this year, U.S. soybean prices experienced a late-season rally, the Purdue economist said.
While Hoosier farmers are expected to plant even more soybeans in the coming years, higher prices will end if South America has a good harvest in the spring, Hurt said.
A number of commodity firms report the Chinese soybean market may be softening, while demand for animal feed corn in developing Asian countries is growing, Barron’s financial magazine reported this week.
With uncertainty about demand, Swope said he and Clouse will likely hedge their bets again next year by maintaining a 50-50 split on corn and soybeans.