Reports from the 2009 hard red winter wheat crop tour through Kansas and parts of Oklahoma and Colorado earlier this month told of mixed fortunes.
The tour estimate came in below the 10-year average and below last year’s actual harvest. Some experts thought the Kansas estimate of 333.3 million bushels was too high, but others thought it was probably too low. The first official government estimate of the year pegged the overall wheat crop slightly higher than industry scouts.
Crop forecasters in Oklahoma attending the annual convention of the Oklahoma Grain and Feed Association predicted the state could end up with its worst harvest in half a century, due to drought and a late freeze. On the bright side, the condition of the crop appeared to improve somewhat in recent weeks. Tim Bartram, executive director of the Oklahoma Wheat Growers Association, who participated on the winter wheat crop tour, said some fields in Oklahoma still have the potential to yield 50-bushel wheat.
In Colorado and Western Kansas, area grain elevator personnel are optimistic about both the wheat and future corn crops.
Dan Duell, manager of Frontier Ag Inc. in Goodland, had high praise for the area’s 2009 wheat crop.
“It’s excellent, like scary good,” he said. “I haven’t seen a crop look this good in ten years, maybe 12.”
Mike Rahn, an agronomist with M&M Cooperative at Yuma, Colo., also said the dryland wheat was “really looking good out here.”
Wheat in the Arkansas Valley is also in good condition, according Albert Melgosa, general manager of the Rocky Ford Growers Co-op Association.
Based on early estimates, Colorado’s wheat crop is expected to outperform last year’s by a third.
Corn still popular
Spring corn planting is nearing completion with the outlook so far mostly positive. Nationally, farmers are expected to plant less corn this year as wet weather delays timely planting in the Corn Belt and more farmers switch to soybeans. The ethanol industry is also struggling, which could hurt demand. But in many local areas, corn is still king.
“I haven’t heard of a whole lot of slacking off on corn planting,” Rahn said. “The price farmers have been looking at to market the corn they are still holding has been batting back and forth around the area they were hoping to get.”
“Last year was pretty tough for the dryland corn, but starting out right now there’s a lot of seed corn being sold,” Duell said in Goodland.
“I think corn acres will hold pretty tight,” he added. “We’re just in a corn producing area here. We are seeing a lot of dryland corn going in. The bottom line is, if you can get the moisture you need, that’s the highest dollar return crop around here.”
Francis Bruna Jr., manager of the Arkansas Valley Co-op in La Junta, said corn acres this year will be down slightly in his service area with more acreage going into alfalfa. Hay prices got as high as $200 a ton last year and are still in the range of $120 to $150 with lower inputs.
“We could have a glut of alfalfa on the market in the next couple of years,” he said. “Everybody with a little bit of water is planting new hay.”
Melgosa also noted that many of his customers were planting alfalfa, as well as soybeans, pinto beans and sorghum. Corn is still popular, he said. Even with prices lower, he noted they are still higher than they were two or three years ago. And labor issues are curtailing any expansion in fruit and vegetable acreage.
Input costs a critical factor
Some input costs are coming down, but others remain steady or are rising. Duell said most of his customers believe inputs prices aren’t coming down fast enough in comparison with the slide in grain prices.
According to a report by the U.S. Department of Agriculture, farmers paid 3 percent less for production inputs last month compared with a year ago. Government analysts said fuel costs fell by 46 percent and fertilizer by 8 percent.
“Fertilizer and fuels are closely tied together,” Rahn said. “I think a lot of people were worried last year, but some of the trends forecast last year have turned around a bit.”
“If you look at phosphates, some of that product is almost half of what it was,” La Junta’s Bruna said.
He said most farmers held off applying fertilizer when prices spiked and now are “making up for lost time.”
Seed prices are actually running a bit higher, which Bruna said surprised him in light of national trends.
“If people are planting less corn you would think that would put pressure on corn seed to go down,” he noted.
Rahn agreed that corn seed prices were probably up 5 to 10 percent and attributed at least some of that to the stacking of proprietary traits in modern hybrids. Duell in Goodland said corn seed prices there could be up as much as 10 to 15 percent.
USDA’s report indicates seeds nationally were up 11 percent, while farm chemicals rose 14 percent in April compared with the previous year. Herbicides were up 18 percent, fungicides were up 17 percent and insecticides were up four percent.
Economic downturn has ripple effect
Ever since the global economy contracted last fall, banks, consumers and farmers have been nervously monitoring the impacts. This week the Federal Reserve Bank announced that a record number of ag lenders were raising their collateral requirements as farm debt loads increase. Cattle and dairy accounts were the biggest source of concern among lenders.
Bruna says the consequences of the economic recession are still shaking out.
“I think you’ll see more change over the next year. You won’t necessarily see the effects until then,” he said.
In Goodland, Duell said consolidation among farms has picked back up this spring after a hiatus during last year’s short-lived ag boom.
“For the smaller and older producers, it was like20putting a band aid on a broken leg,” he said of the previous year.
The economy might also drive more consolidation of farm supply companies. Farmers are increasingly aggressive price shoppers, Duell said, and his location is facing more competition from wholesale outlets of bigger companies.
Rahn said last year’s high prices put locations like his “upside down” on the price of some items. “That’s why a lot of retailers are losing money on some of their fertilizer,” he said. “We’ll have to take a bloodbath on some of it.”
Two years ago, M&M Cooperative, which is based at Yuma and operates across Northern Colorado, merged with CHS Inc., the nation’s largest grain cooperative. That allowed the co-op to expand its ag supply inventory and storage capacity.
In the recent volatile market environment, however, smaller locations that had less capacity to buy up and store inputs actually came out ahead because they had less investment tied up at last year’s inflated prices.
Still, Rahn said in eight years out of ten, being able to buy and store more supplies is an asset. In addition, the M&M co-op is in a much better position to withstand losses as a result of the merger.
“We’re concerned about the losses (on fertilizer) but not as concerned as we would have been two years ago,” he said.
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Reports from the 2009 hard red winter wheat crop tour through Kansas and parts of Oklahoma and Colorado earlier this month told of mixed fortunes.
The tour estimate came in below the 10-year average and below last year’s actual harvest. Some experts thought the Kansas estimate of 333.3 million bushels was too high, but others thought it was probably too low. The first official government estimate of the year pegged the overall wheat crop slightly higher than industry scouts.
Crop forecasters in Oklahoma attending the annual convention of the Oklahoma Grain and Feed Association predicted the state could end up with its worst harvest in half a century, due to drought and a late freeze. On the bright side, the condition of the crop appeared to improve somewhat in recent weeks. Tim Bartram, executive director of the Oklahoma Wheat Growers Association, who participated on the winter wheat crop tour, said some fields in Oklahoma still have the potential to yield 50-bushel wheat.
In Colorado and Western Kansas, area grain elevator personnel are optimistic about both the wheat and future corn crops.
Dan Duell, manager of Frontier Ag Inc. in Goodland, had high praise for the area’s 2009 wheat crop.
“It’s excellent, like scary good,” he said. “I haven’t seen a crop look this good in ten years, maybe 12.”
Mike Rahn, an agronomist with M&M Cooperative at Yuma, Colo., also said the dryland wheat was “really looking good out here.”
Wheat in the Arkansas Valley is also in good condition, according Albert Melgosa, general manager of the Rocky Ford Growers Co-op Association.
Based on early estimates, Colorado’s wheat crop is expected to outperform last year’s by a third.
Corn still popular
Spring corn planting is nearing completion with the outlook so far mostly positive. Nationally, farmers are expected to plant less corn this year as wet weather delays timely planting in the Corn Belt and more farmers switch to soybeans. The ethanol industry is also struggling, which could hurt demand. But in many local areas, corn is still king.
“I haven’t heard of a whole lot of slacking off on corn planting,” Rahn said. “The price farmers have been looking at to market the corn they are still holding has been batting back and forth around the area they were hoping to get.”
“Last year was pretty tough for the dryland corn, but starting out right now there’s a lot of seed corn being sold,” Duell said in Goodland.
“I think corn acres will hold pretty tight,” he added. “We’re just in a corn producing area here. We are seeing a lot of dryland corn going in. The bottom line is, if you can get the moisture you need, that’s the highest dollar return crop around here.”
Francis Bruna Jr., manager of the Arkansas Valley Co-op in La Junta, said corn acres this year will be down slightly in his service area with more acreage going into alfalfa. Hay prices got as high as $200 a ton last year and are still in the range of $120 to $150 with lower inputs.
“We could have a glut of alfalfa on the market in the next couple of years,” he said. “Everybody with a little bit of water is planting new hay.”
Melgosa also noted that many of his customers were planting alfalfa, as well as soybeans, pinto beans and sorghum. Corn is still popular, he said. Even with prices lower, he noted they are still higher than they were two or three years ago. And labor issues are curtailing any expansion in fruit and vegetable acreage.
Input costs a critical factor
Some input costs are coming down, but others remain steady or are rising. Duell said most of his customers believe inputs prices aren’t coming down fast enough in comparison with the slide in grain prices.
According to a report by the U.S. Department of Agriculture, farmers paid 3 percent less for production inputs last month compared with a year ago. Government analysts said fuel costs fell by 46 percent and fertilizer by 8 percent.
“Fertilizer and fuels are closely tied together,” Rahn said. “I think a lot of people were worried last year, but some of the trends forecast last year have turned around a bit.”
“If you look at phosphates, some of that product is almost half of what it was,” La Junta’s Bruna said.
He said most farmers held off applying fertilizer when prices spiked and now are “making up for lost time.”
Seed prices are actually running a bit higher, which Bruna said surprised him in light of national trends.
“If people are planting less corn you would think that would put pressure on corn seed to go down,” he noted.
Rahn agreed that corn seed prices were probably up 5 to 10 percent and attributed at least some of that to the stacking of proprietary traits in modern hybrids. Duell in Goodland said corn seed prices there could be up as much as 10 to 15 percent.
USDA’s report indicates seeds nationally were up 11 percent, while farm chemicals rose 14 percent in April compared with the previous year. Herbicides were up 18 percent, fungicides were up 17 percent and insecticides were up four percent.
Economic downturn has ripple effect
Ever since the global economy contracted last fall, banks, consumers and farmers have been nervously monitoring the impacts. This week the Federal Reserve Bank announced that a record number of ag lenders were raising their collateral requirements as farm debt loads increase. Cattle and dairy accounts were the biggest source of concern among lenders.
Bruna says the consequences of the economic recession are still shaking out.
“I think you’ll see more change over the next year. You won’t necessarily see the effects until then,” he said.
In Goodland, Duell said consolidation among farms has picked back up this spring after a hiatus during last year’s short-lived ag boom.
“For the smaller and older producers, it was like20putting a band aid on a broken leg,” he said of the previous year.
The economy might also drive more consolidation of farm supply companies. Farmers are increasingly aggressive price shoppers, Duell said, and his location is facing more competition from wholesale outlets of bigger companies.
Rahn said last year’s high prices put locations like his “upside down” on the price of some items. “That’s why a lot of retailers are losing money on some of their fertilizer,” he said. “We’ll have to take a bloodbath on some of it.”
Two years ago, M&M Cooperative, which is based at Yuma and operates across Northern Colorado, merged with CHS Inc., the nation’s largest grain cooperative. That allowed the co-op to expand its ag supply inventory and storage capacity.
In the recent volatile market environment, however, smaller locations that had less capacity to buy up and store inputs actually came out ahead because they had less investment tied up at last year’s inflated prices.
Still, Rahn said in eight years out of ten, being able to buy and store more supplies is an asset. In addition, the M&M co-op is in a much better position to withstand losses as a result of the merger.
“We’re concerned about the losses (on fertilizer) but not as concerned as we would have been two years ago,” he said.
