Corn, soybean farmers face another year of low prices
It looks like 2018 will be another challenging year for corn and soybean farmers.
“It’s going to be a tough year, I think, because of low (commodity) prices,” said Kevin Semke, who with his wife Ellen and son and daughter-in-law, Kyle and Tamar Semke, raises about 1,000 acres of corn and soybeans at Semke Farms near Coon Valley. They also do custom farm work such as tillage, planting, harvesting, spraying and fertilizer application, for other farmers.
Farmers have had to cope with low corn and soybean prices for the past few years, Semke said.
U.S. corn prices are expected to average about $3.40 per bushel in 2018, up 3 percent from $3.30 in 2017, U.S. Department of Agriculture Chief Economist Robert Johansson said at the agency’s annual Agricultural Outlook Forum in late February. U.S. soybean prices are expected to average about $9.25 per bushel in 2018, down 0.5 percent from $9.30 in 2017, he said.
Those prices are down sharply from the record high prices (both set in 2012) of $6.89 for corn and $14.40 for soybeans.
Johansson said production has outpaced consumption for many grains and oilseeds during the last four years, after the large drawdown in stocks that followed the 2012 U.S. drought.
With the current low prices for corn and soybeans, the 62-year-old Semke said, “We hope to make a little, but we’re not going to make a lot” of money. “We don’t want to go in the hole.
“The biggest (concern) with agriculture as a whole is passing the torch on to a younger generation coming in, like our son coming in” and eventually taking over the family farm, Semke said. “We’re working with him and helping him” take over. “To get started on your own (without help) is just about impossible.”
Semke said farmers have had to be frugal in the last few years because of low commodity prices. “We try to get the biggest bang for the buck,” he said of buying seed, fuel, fertilizer and chemicals.
Semke said he upgraded his machinery when corn and soybean prices were much higher several years ago, “We were able to make some good deals, got the equipment we wanted for a fair price, and were able to get things paid down,” he said. “We’re not sitting on a lot of machinery debt. That’s the biggest thing. A lot of guys got caught buying a lot of stuff and are still paying off some of that debt, and it’s hard” on them.
Semke is concerned about talk of a possible international trade war, which could have a negative effect on U.S. farm commodity exports and prices. “It seems like the agriculture sector is the first one to get hit” in a trade war, he said.
He usually begins planting around the first week of May, and hopes for good weather this spring.
“Last year we had weather issues here,” Semke said of some heavy downpours last spring that caused washouts and forced him to replant about 60 acres of corn and about 72 acres of soybeans.
Most area farmers usually begin planting corn toward the end of April or in early May, said Bill Halfman, University of Wisconsin-Extension agriculture agent in Monroe County.
“We weren’t in too bad a shape (with soil moisture) going into the winter,” but the area received less snow than usual, Halfman said. “We’re kind of going in dryer than usual. Precipitation from here on out is going to be important.”
Because of low commodity prices, Halfman said, the mood of area corn and soybean farmers is “apprehensive, kind of sour. Margins are not good right now.”
U.S. corn prices are expected to average about $3.40 per bushel in 2018, up 3 percent from $3.30 in 2017. U.S. soybean prices are expected to average about $9.25 per bushel in 2018, down 0.5 percent from $9.30 in 2017.“We weren’t in too bad a shape (with soil moisture) going into the winter,” but the area received less snow than usual, Halfman said. “We’re kind of going in dryer than usual. Precipitation from here on out is going to be important.” Bill Halfman, University of Wisconsin-Extension agriculture agent