Friday, November 2nd, 2018

Bumper crops not paying off for farmers

Lower prices take toll on bottom line

By Nancy Allen
Photo by Dan Melograna/The Daily Standard

Aaron Huwer drives a combine through a cornfield to harvest the corn recently on the family's farm off State Route 118 near Coldwater.

Though many area farmers will harvest bumper crops this year, low market prices will still mean thin wallets for producers.
Farmers also are having trouble finding storage for their bin-busting crops as they finish harvesting, local ag officials said.
"Most farmers are saying they have not had these types of yields in 40 years," said Anita Green, Auglaize County Farm Service Agency executive director. "That's a neat thing to go through."
In Auglaize County, 80 percent of the corn and about 90 percent of soybeans have been harvested, Green said. Reported corn yields range from 165 to 250 bushels per acre, and soybean yields range from 60 to 80 bushels per acre. According to USDA statistics, the five-year average yield for corn is 172 bushels per acre for corn and 56 bushels per acre for soybeans.
In Mercer County, 87 percent of the corn and 95 percent of the soybeans have come off, said Michelle Stahl, Mercer County Farm Service Agency executive director. Corn yields range from 150 to 220 bushels per acre and soybean yields range from 42 to 60 bushels per acre, she said.
Overall grain quality is excellent, and very few disease problems have been reported, Stahl and Green said.
Celina area farmer Dennis Howick said the area north and east of Celina where he planted crops was a little drier than other areas of the county, so he did not see record yields but characterized his corn and soybeans as very good. He said his soybeans produced about eight bushels more per acre, and his corn produced 12 bushels more per acre than last year's harvest.
But the higher yields won't translate into more income.
"Our net income will be about the same (as last year's) because prices are down," Howick said. "Even though we got a bit more, we aren't going to gain anything."
Green said the area's bumper crops will not make up for income losses but rather make the financial pain less severe.
"Nothing makes up for low market prices," she said. "Unfortunately farmers can't influence the market independently on a domestic or global market."
The overall abundance of crops has caused a bottleneck at some elevators.
"When we finished beans (a week ago), we hauled them in and took them to several different elevators," Howick said. "You basically hauled to where you could get rid of them at. Some places are getting so full they won't accept."
Howick said he took some of his crops to one elevator, and the operators told him not to come back the next day. He then had to call a few facilities before he found one that would accept his soybeans.
Stahl said she has applied to the State FSA office for distressed storage loans. The loans would help farmers whose on-farm storage is full and who cannot take their harvest to local elevators because their storage also is full. She should know in a few weeks if the loans will be available.
"This would be if they want to get a loan on their grain for cash-flow purposes. That occurs when the elevators are too full to take it and they have to store it on their farm," Stahl said. "If their own storage is filled up, it means they have to store in distressed conditions such as in barns or in wagons or on barn floors covered up with plastic."
About five years ago, farmers were coming off record-high prices for corn and soybeans and some huge harvests. The bumper crops remain but the prices are memories.
Farm incomes have declined more than 50 percent since 2012, even though farmers have set production records four times for both corn and soybeans in the years since, according to Ben Brown, manager of The Ohio State University's Ohio Farm Management Program.
The U.S. Department of Agriculture's August farm-income report estimates farm income this year will fall 13 percent. The next report comes out in March.
Brown said he believes farm income may not drop as much as USDA is predicting.
"It may be about the same as last year," Brown said. "The August info is underestimating yields and does not include the $4.7 billion in direct payments from the Market Facilitation Program."
The USDA launched the MFP in early September to pay out $12 billion in emergency relief to help U.S. farmers hurt by trade disputes with China and other countries. Payments will be administered by county FSA offices to corn, cotton, dairy, hog, sorghum, soybean and wheat producers.
The extent to which MFP payments may help farmers depends on the number of acres planted, the amount of crops produced and yield amounts, Brown said.
He referred to the program as a Band-Aid and not a long-term solution to trade issues. Brown said U.S. soybean farmers have gained some export markets for their soybeans after losing most of its Chinese export markets.
"We are 30 percent behind last year's pace in soybean exports, but we have picked up some markets," he said. "We lost almost all of our Chinese exports, but we picked up the European Union, Egypt, Iran and the Netherlands for soybean exports."
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