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|Paynesville Press - November 13, 2002|
High grain prices, good harvest to aid farmers
Area farmers can expect over $1 per bushel more than last year for soybeans and nearly 40¢ more per bushel for corn, but dairy farmers face milk prices that slipped below $10 last week, and farmers also face low prices for livestock. |
While Minnesota farmers had good soybean and corn crops this year, a drought in other parts of the country lowered the supply of corn and soybeans, raising the prices, according to Dave Schwartz of the Meeker County Extension Office.
Adding to that, flooding in South America - a large soybean exporter - has stalled planting there, driving prices up even more. Prices could go higher still for soybeans, said Schwartz, although prices have fallen a bit in the past weeks, as happens every year during harvest.
As of Thursday, Nov. 7, soybeans sold at $5.74 per bushel this year, compared to $4.28 last year. Corn sold at $2.42 per bushel this year, compared to $2.01 last year.
Milk prices and meat prices are also driven by supply and demand, and unfortunately, said Schwartz, demand is down for both.
Nationwide, milk production is up, even though production in Minnesota has slipped in the past 20 years, he said. This increase - combined with lower demand - has caused milk prices to drop from a high of almost $18 per hundred pounds of class three milk (milk used to make cheese and butter) in November 1998 to less than $10 per hundredweight last week.
An increase in production had already caused milk prices to fall and, when the nation entered an economic downturn, demand was further reduced, said Neil Fischer of Associated Milk Producers, Inc., in Paynesville.
According to Schwartz, when the economy is bad, things like premium ice cream, butter, and high end cheese are purchased less by consumers, thus reducing demand while the supply remains high.
Meat prices have also been affected by the dry conditions in other parts of the country. Farmers in drought areas have had less grain from their own fields to feed their animals and have found themselves short on grazing land. Instead of buying grain for their animals, which can be very expensive, many chose to sell their animals, which increased the supply of meat, lowering prices.
The meat prices have started to come up again recently, but at 73¢ per pound on Friday, Nov. 8, the live catte price is still lower than 18 months ago, when prices were over 80¢ per pound.
The price for lean hogs is still very low, in spite of a fall upturn. At 46¢ per pound, it is down from 68¢ during the same period last year. Lean hog prices are still so low that farmers are reluctant to sell their livestock, even though a hog begins to lose value after it hits a high weight, said Schwartz.
Schwartz is optimistic that meat and milk prices will go up, but he's reluctant to predict when and how much.
According to Craig Haugaard of the Pope County Extension Office in Elbow Lake, farmers often hurt themselves by letting their emotions dictate when to sell. Some farmers hold onto a crop at first because they think the price will go up, then hold on even longer if prices drop, and can end up selling at the wrong time because they have to make a loan payment.
The good news is that area farmers, are finally finishing their harvest. According to Schwartz, the harvest has been good, and prices for those crops are high.
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