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Local farmers wait and see on crop yields, feed prices

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Catherine W. Idzerda
October 7, 2012

— Every farming season has its emotional highs and lows.

Sometimes a fussy piece of equipment suddenly decides that for today, at least, it will run perfectly or a sodden spring turns into a perfect summer.

Not this year.

Farmers' emotions ran a short gamut from uneasy to apprehensive to moments away from panic.

By now, the summer drought is old news. Southern Wisconsin from the Iowa border to the middle of Walworth County remains under extreme drought conditions, according to the U.S. Department of Agriculture drought monitor.

"Farmers were extremely stressed out in July and August," said Rene Johnson, vice president of ag lending at Union Bank and Trust in Evansville. "That has subsided."

The rains eventually came, helping the soybean crop and some of the corn. But most farmers already had suffered losses. The extent of their losses depends on where they farm in the county, if they had irrigation and when they started planting.

"What I have found over the past month or so is that the mood has been more wait and see," Johnson said.

Wait and see what the yields are like.

Wait and see what the insurance adjuster says.

Finally, wait and see what feed prices do.

Expensive choices

Let's say you're a farmer who has 1,000 acres of corn and soybeans.

Every year, some of that crop is sold for cash grain. The rest is used to feed your livestock, either beef or dairy cows. This year, the corn you use for feed isn't as valuable. The ears are smaller or didn't develop at all. That means you'll have to use, perhaps, twice as much acreage to get the same amount and quality of feed.

But if you've already contracted with someone to buy part of your crop, you'll either have to buy out that contract or fill the contract using crops you had intended to feed to your own livestock.

Either way, it's going to be expensive.

Last week, the Associated Press reported that some large dairies in California already have succumbed to high feed prices. Unable to afford grain, they ended up selling their herds.

Corn futures for December reached a record high of $8.49 on Aug. 10. They have since fallen to $7.53—still ridiculously high.

Counting their blessings

For farmers such as Nick Venable, it's been a summer if mixed blessings.

The Venables own about 1,400 acres and work about 1,600 acres of corn and soybeans.

"It's the first time we've taken out crop insurance," Venable said.

Venable took over the farm from his father, Tom Venable, and his grandfather, Bob Venable.

Both were well-respected farmers who knew how to balance risk and debt against the uncertainties of farming, he said.

"My grandpa was a very successful farmer, and he knew he could survive one bad year," Venable said.

Venable recently bought more land and didn't want additional risk.

If he hadn't bought crop insurance, he'd be retrenching for years.

He also was surprised at the relatively high quantity of his cash crops—despite the growing conditions. Still, the insurance adjuster will be making a stop at his farm. He contracted for about 147 bushels per acre and harvested only about 120 bushels per acre. That means he's about 27 bushels short per acre and will have to buy out that part of the contract.

More challenges ahead

Along with growing crops, the Venables finish 1,000 head of beef cattle a year. They own the facility and manage the cattle.

Lucky for them, they aren't responsible for buying the feed.

"I've got some buddies that are dairy farmers," Venable said. "They had a corn contract and had to buy it out."

Ethanol plants have shut down due to the lack of corn or the price of what corn is available. Many farmers depend on corn byproducts from the ethanol plants as feed for their animals.

Farmers who might benefit from selling corn for $8 a bushel will see prices for all their other inputs go up, too.

"It's going to be tough," Venable said.

It's not a summer farmers will forget easily.

For Johnson, the sight of combines moving through clouds of dust is an unsettling reminder that farmers still are waiting for the decisions of insurance adjusters and final yield numbers.

Venable will remember the extremes.

"There were times when we couldn't spread manure," Venable said. "The ground was so dry and the cracks in the ground were so deep."

He's hoping for a "a really good snowfall" this winter to replenish the groundwater.

But like most smart farmers, he's careful not to place too much trust in Mother Nature.



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