Farmers expect prices to be low

0 Comments | La Crosse Tribune, Oct 12, 1998

Corn and soybean yields are up, but prices are way down.

As a result, Kathy Dummer said Friday, "I think (grain farmers) will be spending less. I think the mood is going to be very cautious and they will really analyze expenditures. Purchases will very much be necessity ones."

But farmers don't seem depressed about the low prices, said Dummer, co-owner of Dummer's Grain Service near Holmen.

"Harvest time is a gear-up time for farmers," she said. "It's a positive time, although prices are not profitable right now. They're businesslike. Their attitude is 'I want to get this done, see what my yields are, see what I have to do for cash-flow management, and see how I can best reduce my price risk.'"

Large supplies and declining exports have caused grain prices to slide this year.

At the end of the day Friday, Dummer's commercial grain elevator was offering farmers $1.69 a bushel for corn and $5.14 for soybeans. "At fall harvest last year, we were right around $2.40 for corn and soybeans probably were $6.30 or $6.35," Dummer said.

"If they wanted profitable bids, they needed to do their booking (forward contracting for fall delivery) before March 12," Dummer said. "That's when we started seeing the slide in the futures market.

"Their options now are much more limited," Dummer said of farmers who didn't lock in higher prices earlier in the year. Those who didn't and can afford to wait are storing their grain until prices increase.

"We've heard there is a lot of on-farm storage being built," Dummer said. "The harvest could get delayed because farmers will wait until their own facilities are completed."

The corn harvest in the Holmen area is further along than usual, and the soybean harvest is just beginning, Dummer said. "Corn yields are very good," she said.

"Anywhere from 170 bushels an acre on up." But corn yields in fields with sandy soil are much lower because of the lack of rain in July, she said.