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Things are looking profitable for Minnesota farmers
by Tim Post, Minnesota Public Radio
April 16, 2004

Central Minnesota Keith Landwehr is optimistic about his crop of corn and soybeans this year. Commodity prices are up, and if the weather cooperates, Minnesota farmer could have a profitable year. (MPR Photo/Tim Post)

As temperatures warm up, Minnesota farmers are ready to head into the fields for spring planting. This year farmers have reason to be optimistic. Prices for the Minnesota's two major crops, corn and soybeans, are close to all-time highs.

Richmond, Minn. — Keith Landwehr and his father-in-law are working to ready a field for planting west of Richmond in central Minnesota. Landwehr pulls a sprayer with his tractor, laying down a fine mist of nitrogen fertilizer. He'll be back in a few days to plant corn.

Landwehr likes the way this field looks.

"Planting conditions are as ideal as you can expect right now," Landehr said. "That's probably the most critical part of the year. The rest of the year we just hope we get timely rains and that'll make the crop in the fall,".

Farmers across Minnesota hope for a good crop this year so they can take advantage of strong commodity prices. Corn and soybeans prices are higher than they've been for years. That means Landwehr has locked-in a profitable price for both crops over the next two years.

He won't have to worry about how the up and down commodities market will effect his bottom line.

"When you have these times of high prices, you've got to look to the future and try to lock in as much of this as you can," Landwehr said.

Farmers say after years of break even pricing, things are looking up.

"It's very optimistic right now," says Nathan Johnson, who farms 2,500 acres of corn and soybeans near Lowry in west central Minnesota. "Farmers are in a very good mood. They're willing to spend the money they probably haven't made yet. Most of us are that way."

Prices are high this year for a couple of reasons. Last year's drought lowered corn and soybean yields in the U.S. Then bad weather hit Brazil, so soybean imports from South America were down.

John Baize, a soybean trade consultant, says while supplies are down, countries like China are importing more American corn and soybeans. The Chinese are using the imports for animal feed and cooking oil. Baize says personal incomes in China are rising, and people are changing their diets.

"The two things that they really want to do is put more vegetable oil in their diet because it improves the taste of food. But they are also want more meat, whether it's pork, poultry or fish," Baize said.

Higher prices are good for U.S. corn and soybeans farmers, but it's tough on the country's livestock producers. When corn and soybean prices go up, feed prices follow.

Bill Crawford, a livestock consultant who works with beef and pork producers in southern Minnesota and northern Iowa, says over the past year the price of feed has doubled for some ranchers, and that means higher costs especially for people who raise pigs.

"If you've absorbed that whole increase certainly on a finished pig basis you could easily see $5, $6, $ maybe as much as $9 more," Crawford said.

Crawford says that could mean a rise in prices at the meat counter but he doesn't expect anything dramatic. Likewise economists don't expect a huge increase in consumer grocery bills because of higher corn and soybean prices.

Farmers hope the high prices hold steady for awhile.

But central Minnesota farmer Keith Landwehr knows what will happen when everyone tries to cash in.

"Obviously when corn goes over $3.00, soybeans close to $10, people are doing everything they can to get more production, more bushels, and all that's going to do is increase the supply. If demand doesn't increase with it, prices will once again be back down to base levels."

Even with the possibility for a profitable year, farmers face the perennial worry of weather. Most parts of the state have just enough moisture for planting. A lot of rain is needed before the heat of summer arrives.

Farmers know that high prices aren't worth much if their crops wither away.

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