The federal government estimates that this year's U.S. farm income will drop 26.6 percent from last year as a result of reduced corn and soybean prices. In Iowa, farmers' income will be around $7.4 billion this year, dropping 31 percent from the $10.9 billion record in 2011, Donnelle Eller writes for The Des Moines Register.
"We're figuring our break-even prices pretty closely," said Craig Boot, who farms several hundred acres near Pella. Mike Duffy, an Iowa State University farm economist, said when expected income increases, farmers will more likely replace equipment, but when income is lower, they'll wait. Deere & Co., a large manufacturer, expects a 5 to 10 percent reduction in farm machinery sales this year.
Besides the projected income drop, farmers also worry about drought conditions affecting approximately 75 percent of the state and the undesirably cold temperatures causing a frost. "There are a few planters in yards, but it's been cold enough that most are waiting for soil temperatures to get warmer," said Bill Northey, Iowa's secretary of agriculture.
"As much of the nation shifts to adding soybean acres, many Iowa farmers say they're sticking with their typical rotation schedule," Eller writes. "Experts say the increase of corn and soybean acres represents a return to production land that wasn't planted last year because conditions were too wet."
Iowa farmers plan to plant 400,000 more acres of corn than last year and 300,000 more acres of soybeans. According to the U.S. Department of Agriculture, only six states other than Iowa will be planting more corn acres than last year. Julius Schaaf, a farmer in southwest Iowa said deciding a price for selling corn and soybeans is the "toughest part of farming."
"Paying attention to the market will be critical this year to maintain profitability on the farm," said Schaaf. "If a person sees some level of profitability, they should be sure to take some of that off the table, to hedge against the risk of lower prices."
In recent years, corn has sold from about $8 per bushel and soybeans for $18. Schaaf said that "procrastination was about the best marketing tool you had. But I don't think that will be the case this year. I might be wrong. I'd hate to bet my whole crop on prices going up this fall." (Read more)
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| Register photo by Charlie Litchfield |
"We're figuring our break-even prices pretty closely," said Craig Boot, who farms several hundred acres near Pella. Mike Duffy, an Iowa State University farm economist, said when expected income increases, farmers will more likely replace equipment, but when income is lower, they'll wait. Deere & Co., a large manufacturer, expects a 5 to 10 percent reduction in farm machinery sales this year.
Besides the projected income drop, farmers also worry about drought conditions affecting approximately 75 percent of the state and the undesirably cold temperatures causing a frost. "There are a few planters in yards, but it's been cold enough that most are waiting for soil temperatures to get warmer," said Bill Northey, Iowa's secretary of agriculture.
"As much of the nation shifts to adding soybean acres, many Iowa farmers say they're sticking with their typical rotation schedule," Eller writes. "Experts say the increase of corn and soybean acres represents a return to production land that wasn't planted last year because conditions were too wet."
Iowa farmers plan to plant 400,000 more acres of corn than last year and 300,000 more acres of soybeans. According to the U.S. Department of Agriculture, only six states other than Iowa will be planting more corn acres than last year. Julius Schaaf, a farmer in southwest Iowa said deciding a price for selling corn and soybeans is the "toughest part of farming."
"Paying attention to the market will be critical this year to maintain profitability on the farm," said Schaaf. "If a person sees some level of profitability, they should be sure to take some of that off the table, to hedge against the risk of lower prices."
In recent years, corn has sold from about $8 per bushel and soybeans for $18. Schaaf said that "procrastination was about the best marketing tool you had. But I don't think that will be the case this year. I might be wrong. I'd hate to bet my whole crop on prices going up this fall." (Read more)
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