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Prices Causing Near Crisis in ND Farm Country


Low crop prices will likely be on the minds of growers as they head into harvest season, leaving some in a desperate situation, North Dakota’s top agriculture administrator said.

“We’re almost to the point to where we are in crisis, almost,” Agriculture Commissioner Doug Goehring said Wednesday. “I’m not going to say we’re there yet.”

Some farmers have climbed into their combines, and harvest season should be in full swing by next week.

The U.S. Department of Agriculture predicted in its most recent production report North Dakota could produce 279 million bushels of spring wheat, down 13 percent from last year, according to U.S. Department of agriculture statistics. Predictions for corn, soybeans and other crops are expected Friday, but agriculturists are anticipating good crops with high yields.

“We’re looking at these row crops and they look like bin-busters,” Goehring said, adding the state could see a record bean crop.

North Dakota has had an exceptional harvest in the last three years, he said, but falling commodity prices have kept farmers from capitalizing on those high-yielding crops.

Prices have been on a downward trend in North Dakota for multiple crops since 2012, with last years’ numbers hitting lows that haven’t been seen since 2009, according to the USDA. All wheat in North Dakota averaged $4.60 per bushel last year compared with $8.07 in 2012, the highest it has been in the last decade. Corn averaged $3.20 per bushel last year compared with $6.46 in 2012. Soybeans were down from 2012 averages of $14 per bushel to $8.40 last year.

The Chicago Board of Trade closed Wednesday with corn staying steady at $3.36 per bushel for December, down 18 percent from last year at this time. Wheat jumped 9 cents Wednesday to $4.10 per bushel for September but was down 12 percent from last year.

Soybeans settled at $9.55 per bushel for November but were up 17.2 percent from January.

Weather woes

The low prices adds to weather problems producers in eastern North Dakota have faced. A wet July produced thunderstorms that brought damaging hail and wind, especially in parts of northeastern North Dakota.

Pembina County has been hit hard with winds that knocked over crops, and rain has flooded some fields, Pembina County Extension Agent Samantha Lahman said.

“Almost all of our fields have damage somewhere between 10 percent and 60 percent,” she said.

On the bright side, crops in Pembina County could have “outstanding” yields, Lahman said. Some producers have winter wheat with nearly 100-bushel yields.

“We’ve always had really good yields up here,” she said. “Apart from way too much water, we had a really good growing season.

Overall, crops in Grand Forks County are very good, according to Willie Huot, a Grand Forks County Extension agent. As in other parts of North Dakota, some areas were victim to hail, wind and flood damage, but wheat crops are expected to produce 55- to 80-bushel yields.

“I think we are going to see overall it’s a very good wheat crop that’s ahead of us, but there are pockets here where it is either gone or it’ll be a significant reduction in yield,” he said.

He added the corn crop is looking exceptionally good and should exceed county averages of 120-bushel yields.

Dashed hopes

Goehring attributed falling prices to a variety of factors, from overproduction to events affecting global markets, such as the United Kingdom’s vote to leave the European Union.

“We were building some hope into farmers’ lives … a month ago,” Goehring said, adding the Brexit vote pulled “so much money” out of the commodity market.

The bleeding hasn’t stop, as he put it. Crops have continued to fall, especially in the last three weeks. A strong dollar also is making crop prices less competitive, Huot said.

“It’s just dashed so many hopes, and now they are being told we have this big crop,” Goehring said, adding farmers have voiced concerns about refinancing and credit counseling. “They are really concerned about hanging on.”

Low prices have forced producers to cut back on operations, he added. Farmers are buying parts and supplies only as they need them. Some are holding off on buying fuel to see if prices drop.

Producers who stored grain last year will face the dilemma of finding space for this year’s crop or selling at low prices.

“There’s some angst because they don’t have the storage to sit on a lot of new crop,” Goehring said. “Quite frankly, the bank is going to be calling their note this winter or early spring, and (farmers) are afraid they won’t have enough to cover it.”

Farmers could face a lot of tough decisions, though those will have to be made on individual levels and will vary from farm to farm, Goehring said. Farmers may be able to refinance if they haven’t already. Others may have to find other options to produce revenue.

He advised against selling land, machinery or cattle to balance out debt.

“My son was listening to an auction sale today, and a combine that is only 3 years old and has 900 hours on it went for $31,000,” he said. “That’s a $200,000-plus combine just sold for approximately 15 percent of its retail value 18 months ago.”

A turnaround in prices could happen at a rapid pace to break-even levels, but Goehring said he didn’t foresee that happening anytime soon.

“We’re just making ourselves available for those producers who are looking at some credit counseling, looking at some ways to try and work through some things, using our mediation program to try and come up with options,” he said.

Source: Forum  News Service

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