Outlook 2018 for corn and soybean crops

With heavy April snowfall farmers are just getting started planting their 2018 crops with hopes of good yields and good prices. There has been plenty of spring moisture and now the cropping season will take off in full swing when the soil dries out. Farmers have been blessed with three years in a row of above average crops. Will 2018 continue the trend? The good yields helped many farmers survive the low prices and small profits the past couple of years. In southern Minnesota, corn farmers in the Adult Farm Management programs have averaged losses on corn production since 2014, while they were able to generate small profits on soybean from 2014 through 2016 turning to a loss in 2017.

Cash crop prices for 2018 corn are at $3.70 and soybean prices are $9.60 depending on local basis. These prices are 30 cents better than a year ago for corn and 70 cents higher for soybeans. December corn futures rallied 25 cents from the April low price and soybeans futures have increased 60 cents. Farmers in my marketing groups have worked on their 2018 budgets and determined their average breakeven prices of $3.85 for corn and $10.60 for soybeans. With current prices offered for 2018 corn and soybeans below 2018 breakeven prices, farmers will again be facing a smaller profit year unless prices continue to rise.

Farmers will be examining their farm expenses to determine ways to lower costs. Rents are the largest expense accounting for 40 percent of soybean crop expenses and 33 percent of corn expenses. The next largest is fertilizer, followed by seed, chemicals and repairs and hired labor. The challenge is to lower input costs without sacrificing yield. Yield may also be lowered by a later planting date this year.

Farmers need to be alert for opportunities if the markets rally close to the prices necessary to lock in profits. Farmers need to develop a marketing plan with target prices beginning close to their individual breakeven prices and stair step their way up to higher price targets. Decision dates should be added to determine if prices are high enough to lock in prices available at the time. The high in corn prices usually occurs in May, with historically higher than average prices for both corn and soybeans from April through June. This time period would be a good time to set marketing decision dates. With the prices improving, farmers should look at marketing part of their 2018 crop.

If the target prices are not met and on decision dates have passed with too low of a price to market any grain, farmers need to add default dates to force sales, especially for those bushels that the farmer will not have on-farm storage space at harvest time. It is hoped 2018 will be another year with good yields which also help lower the breakeven prices. With prices currently below the breakeven prices necessary, 2018 will be another with smaller profits for Minnesota corn and soybean farmers.

Source: Dave Bau, extensioneducator, Ag Business Management, University of Minnesota Extension, 507-372-3900 ext 3906, bauxx003@umn.edu

Iowa, Nebraska farmers nearly caught up on spring planting

DES MOINES, Iowa (AP) — Although spring storms initially slowed spring planting progress in Iowa and Nebraska, the U.S. Department of Agriculture reports farmers have nearly caught up to five-year averages in the past week.

Iowa farmers have 40 percent of the corn crop planted, about three days behind the average at this point in the season. Three percent of corn plants have emerged, a slower pace than the five-year average of 9 percent.

The USDA said Monday in its weekly crop update that Iowa soybean planting is at the average of 12 percent completed.

Farmers in Nebraska have 42 percent of the corn planted, near the 46 percent average. About 2 percent of the plants emerged behind the five-year average of 10 percent.

Soybean planting is slightly ahead of schedule with 16 percent completed.

Ohio dairies liquidate, close in response to low milk prices

CELINA, Ohio (AP) — Worldwide demand and a low number of cows had dairy farmers milking the profits four years ago.

Now, the situation is reversed and low milk prices are forcing dairy farms in northwestern Ohio to either close or liquidate a large portion of their herds.

Six dairies in Mercer County and four in Auglaize County closed or reduced their herds over the past year, according to The Daily Standard.

Data from the state Department of Agriculture showed Mercer has 89 dairies compared to 121 six years ago, and Auglaize has 35 compared to 58. The state saw a drop in 59 licensed dairy farms just over the past five months.

Smaller dairies have to increase their size to remain profitable, and the investment is too much of a risk, said Ohio State University Extension educator Denny Riethman.

Milk prices averaged at $23.26 per 100 pounds in 2014. The average this year is at $14.43, a 38 percent decline.

St. Marys dairy farmer Melvin Fledderjohann, 82, said he plans to stay in the dairy business. He and his son save costs by doing all the work on their 70-cow operation.

“We have a couple of dollars in the bank, so we will wait and see what’s down the road,” he said.