Photos Grain farmers in Minnesota enjoyed higher prices and higher yields this year Willard Dick is a farmer in southwest Minnesota Soybeans wait to be transported More from MPR The Miracle Bean -- losing value (Feb. 12, 2002) Resources Minnesota Department of Agriculture Minnesota Corn Growers Minnesota Soybean Respond to this story Talk about this story in the MPR News Forum Submit a commentary Help us cover this story

A better year for grain farmers
by Mark Steil, Minnesota Public Radio
December 9, 2002

Grain farmers in Minnesota enjoyed higher prices and higher yields this year, for the first time in a long time. (MPR file photo)

Minnesota farmers are having it both ways this year -- good crops and higher grain prices. Taxpayers may also benefit, because higher crop prices means the federal government will pay less to subsidize farmers.

Worthington, Minn. — Minnesota farmers haven't had much good news the last five years. It looked for a time like this year would be more of the same. As summer began, a well-established drought in the western U.S. edged eastward. Willard Dick says his fields in southwest Minnesota were on the brink of serious damage.

"We were dry and rather hot," says Dick. "But we had some timely rains in July. First part of August we had some more rains and the temperatures moderated somewhat, so the crop turned out to be very good."

The state's two major cash crops were record setters. Minnesota farmers harvested about 30 percent more corn than last year, and soybean production rose 16 percent. Most of the rest of the country had a poor harvest. Dick says that reduced supplies and sent prices higher.

	Willard Dick is a farmer in southwest Minnesota

"It was a good feeling," says Dick. "Because you could sell grain at a higher price than what we had been selling it for."

The increased production should net Minnesota farmers several hundred million dollars more on their corn and soybeans compared to last year. The extra money is nice, but the biggest impact may be psychological.

This year's harvest reversed a five-year trend that saw farmers become increasingly dependent on federal subsidies for a living.

Consider soybeans. Last year, soybean prices were so low they triggered massive federal support payments to keep farmers in business. This year's higher price means very few farmers collected extra federal money for the crop. U.S. Agriculture Department economist Joe Glauber says the psychological impact is important.

	Soybeans wait to be transported

"I think farmers are very glad to get more of their income from the market, rather than from a government check," says Glauber.

He says the turnaround in crop prices will reduce the amount of taxpayer money spent to subsidize farmers.

"I think federal spending should be down and should be down considerably," says Glauber. "We'll know with more detail and accuracy when we put out our budget estimates in February."

Glauber says federal spending on agriculture will probably drop by several billion dollars. And there may be more good news in the future. Agricultural analysts differ on the price outlook, but some expect even better crop prices next year. Sue Martin of Webster City, Iowa says one crop -- soybeans -- stands out.

Martin's optimism is based on what's happening in South America. Farmers there have finished planting and will begin harvesting their soybean crop in February. Martin says a variety of problems could reduce the South American harvest. That would reduce world soybean supplies, and drive up prices.

"If we get more weather going in South America, and it's co-mingled with economic strife or problems in Brazil, $7.50 to $8 beans (per bushel) are not out of line at all," says Martin.

Market prices this fall for soybeans have been in the $5.50 per bushel range. Other farm analysts are more cautious than Martin. They say it's too early to know if soybean prices will move significantly higher.

Southwest Minnesota farmer Willard Dick isn't sure which side to believe. Just the other day, soybean prices dropped by more than 2 percent.

"That just shows how much prices can vary just in a matter of one day," says Dick.

It's too early to call this year's harvest an economic turning point for grain farmers. But for the first time in years, they have a little hope that better times are ahead.

News Headlines

Related Subjects