KEARNEY, Neb. — The era of $8-per-bushel corn is gone for the foreseeable future, and farmers are back to wondering if they will cover their production costs in 2014.
“It’s going to be a challenge,” said Upland farmer and Nebraska Corn Growers Association President Joel Grams about planning for a new crop year during which market prices for corn are expected to stay around $4 per bushel.
“You manage your risks. That’s what it’s going to take this year with prices at or below the cost of production,” he said.
Despite the market outlook, neither Grams nor Nebraska Corn Board directors Dennis Gengenbach of Smithfield and Tim Scheer of St. Paul expect most farmers to stray from their usual crop rotations or acres.
The Corn Board’s fiscal 2013-14 budget anticipates corn checkoff revenue of $7.17 million.
Director of Research Kelly Brunkhorst said the board had projected 9.6 million acres of corn in Nebraska from an average of 162.5 bushels per acre for 2013 when the budget was set last summer. The U.S. Department of Agriculture’s November projections were 9.55 million acres and 169 bushels per acre, which would be a record 1.6 billion bushels.
Nebraska farmers received record prices for their crops in the past few years because corn growers in other parts of the country suffered big production losses.
“It’s obviously supply and demand,” Scheer said.
“There’s a lot of buzz about going (from corn) to soybeans this year,” he said. “On my farm, it’s not going to change.” He said he needs to maintain his corn production as feed for his cow-calf operation.
Today’s markets would indicate a financial incentive to shift to more soybean acres. Scheer said April weather may affect farmers’ planting decisions, with wet conditions and delayed planting resulting in more soybeans.
While all farmers will monitor production costs closely in 2014, Gengenbach said, they won’t know their actual costs until harvest time.
“There are so many variables here,” he said, with weather being a huge one. In each of the last two growing seasons, only 5.5 inches of rain fell on his fields. Nebraska farmers started the record-setting drought year of 2012 with a good soil moisture profile left over from a wet 2011.
That wasn’t the case in 2013. “If it wasn’t for irrigation, we’d really be in bad shape,” Gengenbach said.
Scheer said older farmers will go back to management practices they used before 2008, when corn prices well below $4 per bushel were common.
Grams said some younger farmers may be dealing with tight margins for the first time, so running their businesses with $4 corn will be a tough learning experience.