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This fall's harvest expected to yield lots of corn but not a lot of money

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Catherine W. Idzerda
September 21, 2014

JANESVILLE—This fall, farmers in Rock County expect to harvest near-record amounts of corn.

If they're lucky, they'll be able to store it or feed it to their livestock.

If they're not, they'll have to sell it for an amount that won't cover the cost of their inputs.

Welcome to farming, the career where if Mother Nature doesn't get you, some market oddity will.

Not a farmer? Here's why it should matter to you: In Rock County, the agricultural sector represents more than 8 percent of the county's income, pumps $445 million into the local economy and contributes about $1.45 billion in business sales, according to a study by the UW Extension.

And those numbers are from three years ago. Since that time, grain elevators from Evansville to Avalon have expanded and have upgraded the rail lines running in and out of their plants.

Rock Prairie Dairy moved in, adding nearly 5,000 cows to the county's dairy sector, and Seneca Foods is expanding.

HARVEST HOPES

Doug Kloepping, grain acquisition manager for the DeLong Company in Clinton, predicted a “good, strong” harvest for the area.

He's not convinced it's going to be a “bin buster” but thinks farmers might see some near-record yields.

Al Sweeney agrees with Kloepping's predictions.

Sweeney farms about 500 acres west of Edgerton.

“He's probably right,” Sweeney said. “There have been some issues with root rot and crown rot.”

Yields are a function of the weather: Spring planting dates, timely rain and the right temperature at the right time all factor into yields.

So are issues such as root and crown rot. Rock County's cold spring meant plants were more susceptible to some diseases.

Kloepping and others said that while local farmers might not set any records, other areas of the corn belt are expected to break records, adding to a glut in the market.

PRICE SWINGS

In 2011, corn prices in Wisconsin reached a record high of $7.09 per bushel.

Farmers talked in wonder about “$7 corn.”

In 2012, prices brought another record, reaching $7.39 a bushel, and in 2013 it hit $7.06.

It's important to understand that this comes after years of corn selling for about $4 a bushel.

This year so far, the highest price was $4.72 in May. The most recent number Sweeney was quoted was $3.17 a bushel.

What happened?

Bruce L. Jones, professor of agricultural and applied economics at UW-Madison, said prices are the result of supply and demand.

In 2010, prices were on the way up, motivating framers to plant more corn.

Marginal land that had been taken out of production was returned to production. Between 2010 and 2011, the number of acres harvested in Rock County went from 142,000 to 157,000. Yields in both years were very good.

In 2012, the drought significantly curtailed yield, Jones said.

Bushels per acres went from 161.5 in 2011 to 102.7 in 2012.

The total number of bushels harvested in Rock County dropped 41 percent.

In 2013, fewer acres were harvested, but the yields were good, Jones said.

This year, yields are expected to be good, as well.

The result?

“Bammo! Now, supplies of corn are quite plentiful,” Jones said.

At $3.17 a bushel, however, “it's going to be very difficult” for farmers to cover the costs fuel, seed and fertilizer they plowed into growing this year's crop.

“Selling right out of the field is not the way you want to go right now,” Jones said.

Farmers who can store their grain, will hold onto it. But that comes with risks, too, such as corn going bad in the bins.

A few years ago, a record-breaking yield resulted in piles of grain heaped in Rock County parking lots.

Delong's Kloepping doesn't think it will come to that this fall.

In the past few years, grain elevators such Gavilon Grain in Avalon and Landmark Services in Evansville have expanded.

In 2012, the Delong Company bought about 60 acres in Clinton's industrial park for an expansion that included additional storage facilities.

Still, there's only so much corn any elevator can take in on any given day, and cash grain farmers who don't have the storage space on their farms or don't have contracts with a local elevators are going to “face challenges,” Jones said.

GOOD NEWS, BAD NEWS

For the past few years, record high grain prices have put dairy farmers and livestock producers in a pinch. The cost of feeding their animals rose with the grain prices.

Now, corn prices are less than half what they were a year ago.

“Livestock farmers will have the opportunity to see larger profit margins with more affordable feed,” Jones said.

According to the USDA, that's good news for Rock County livestock producers who tend to 40,500 head of beef and dairy cattle.



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