Friday, September 7th, 2012
Farmers told to take the cash
Expert says crop prices at record highs
By Nancy Allen
Grain farmers should skip storage and cash in on historically high corn and soybeans prices, a local grain marketing consultant said.
John Leighty, who works for Trupointe Cooperative in Botkins, told farmers at the Mercer County agriculture breakfast meeting Thursday that in a short crop year like this year, prices peak either before or during harvest and decline after.
"We're in historic times," he said. "November bean futures just yesterday (Wednesday) traded at $17.89, the highest they've ever traded, and corn has traded as high at $8.48. We've never seen prices like that."
Farmers are getting ready to harvest a poorer-than-expected corn and soybean crop caused by the widest spread U.S. drought in decades. They now have to decide whether to hold on to their grain and hope for higher prices or sell it right out of the fields.
Farmers who have to buy corn to feed to their animals are feeling the pinch.
Leighty said he heard of a farmer killing baby pigs as soon as they were born because it was cheaper not to feed them.
"You hate to hear that, but when you're losing $60 a head on pigs like they are now, it's cheaper to leave the barns open for a cycle," he said.
Money remains to be made in the beef market, Leighty said, but not in regular cuts of meat. The offals, which include meat from the tongue, internal organs and entrails, are making money in overseas markets.
Leighty said farmers are substituting wheat and hominy for corn and soybean meal in feed rations to save money.
Based on results of the Pro Farmer Crop Tour, Leighty said the corn crop in Mercer County and many Ohio counties will be less than desired. The estimated corn yield for Mercer County is 153 bushels per acre, a number he said is "probably too high," noting that corn samples are taken from just one field.
Some of the poorer corn yields in Ohio counties were in Henry County, 47 bushels per acre; Van Wert, 106; Paulding, 86; and Defiance, 68.
Soybean yields on the other hand look pretty good across the state, he said. Tour officials only count seed pods and plant numbers and do not estimate bushels per acre for soybeans.
"They've benefited from the late summer rains we had in August," he said.
Swings in the markets will increase the closer it gets to harvest, he predicted. Other causes of volatility right now include low world grain stocks, high demand, whether China will continue to be a big soybean buyer, the unsettledness of the European economy and the volatility in oil prices.