Purdue economist: Crop input prices to surge in ’12 Farmland rental costs and volatile fertilizer prices are the two primary drivers of increasing costs, and, according to Alan Miller, seed prices also will be up 5 percent to 10 percent in the coming year. Pesticide prices will vary by product. “Preliminary budgets show variable costs for rotation corn increasing by 16 percent, soybeans by 15 percent and wheat by 12 percent as compared with our January 2011 budgets,” Miller said. Estimates show that despite a recent decline in corn and soybean prices, the income potential from continuous corn on average-yield ground is higher relative to rotation soybeans than in most years. Miller said the income potential may be even better for continuous corn on Indiana’s best farm ground. “The markets are still signaling that they want more corn in 2012, so the
question is whether farmers will listen,” he said. “There probably will be more corn next year.” Even with input costs up in 2012, Miller said farmers can begin to manage their profit margins now, such as by pricing fertilizer for 2012. Fertilizer prices are lower this fall than they are expected to be next spring. Another area Miller said growers should be looking at is cash rents. “It’s hard to figure out a fair amount of cash rent, especially in an environment with so much potential for quick commodity price declines and input price surges,” he said. “We don’t want to see another 2009 where grain prices dropped, costs increased and profitability disappeared. It’s a challenging risk management environment for the farmers.” He urged farmers to be cautious and to try to hold down costs by thinking through all of their purchases. “Commodity producers need to still
be working on being low-cost producers on a cost-per-bushel-produced basis,” Miller said. “Growers need to manage the expected margin between the selling price of the corn and their costs. Try to market to lock-in commodity prices and to lock-in prices on purchased inputs. Lock in profit margins and don’t give up marketing strategies.” While many farmers may be tempted to take a wait-and-see attitude toward marketing the 2011 crop, Miller said that might not be the best idea. Instead, he said, this is a good time to apply marketing skills to the management of input pricing. If crop prices recover, demand for inputs and input prices are likely to increase. For cash rents, he said flexible lease agreements could help both growers and landowners in a volatile period. “Try to help landowners understand the market and the volatility,” Miller said. “Possibly look at flexible lease agreements instead of locking in cash
A Whole-System Approach to Producing Quality Beef Home Study Course Dec. 15 registration deadline Info: $60/person; lessons can be received through U.S. mail or email, but first lesson will be sent through the mail because it also contains the binder for all lessons; send name, address, county, phone number and email address (if applicable) to Grant Crawford at U of M Beef Team, 1390 Highway 15 South, Suite 201, Hutchinson, MN 55350, or craw0105@umn.edu; a registration form can also be found at www.extension.umn.edu/beef or on the Beef Team Facebook page at University of Minnesota Beef Team Minn. State Cattlemen’s Association Convention and Trade Show Dec. 2-3 Jackpot Junction Convention Center, Morton, Minn. Info: Log on to www.mnsca.org
Minnesota Lamb & Wool Producers Shepherd’s Holiday
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Dec. 3-4 Jackpot Junction Hotel and Casino, Morton, Minn. Info: For an agenda and to register, contact Jeremy Geske, jeremy.geske@gmail.com
Jan. 9-May 4 Info: There will also be a course held Tuesdays, Thursdays and Saturdays Jan. 14-Feb. 9 at the University of Minneosta, St. Paul; $275/person, or $6/hour of instruction; contact your Cattle Feeder Day county Extension office or log Dec. 5, 5:30 p.m. on to www1.extension.umn West Central Research and .edu/mastergardener/become/ Outreach Center, Morris, Minn. core-course Info: $35/person, $20/each additional person from same Minnesota Organic family or farm; advanced reg- Conference istration encouraged by con- Jan. 13-14 tacting Grant Crawford, (320) River’s Edge Convention Cen234-0441 or ter, St. Cloud, Minn. craw0105@umn.edu; log on to Info: Check www.mda.state. www.extension.umn.edu/beef mn.us/organic for up-to-date program information Water Quality Conversation Minnesota Pork Congress Dec. 6, 5-8 p.m. Jan. 18-19 City Center Hotel, Mankato, Convention Center, MinMinn. neapolis Info: Free, advanced registra- Info: www.mnpork.com/ tion required by Nov. 30, lim- porkcongress ited seating; meal and roundtable discussions; Farmers Upper Midwest Regional and landowners in particular Fruit & Vegetable are invited to this watershed- Growers Conference & wide, citizen-led conversation Trade Show on water quality issues facing Jan. 19-20 the Minnesota, Blue Earth River’s Edge Convention Cenand Mississippi Rivers; purter, St. Cloud, Minn. pose is to explore how citiInfo: Beginning Grower zens, businesses and govern- Workshops on Jan. 18; log on ment can share leadership by to www.mfvga.org, e-mail collaborating to restore water mfvga@msn.com or call (763) quality; call (877) 269-2873 434-0400 Master Gardener Online Core Course
For more information about 2012 input costs, check out Miller and Bruce Erickson’s article “Crop Input Prices Surge” in the October 2011 edition of Purdue Ag Econ Report at www.ag econ.purdue.edu/extension/pubs/paer. Also check the Purdue Crop Costs and Returns Estimates for 2012 at www.ag econ.purdue.edu/extension/pubs/ id166_2012 _AUG29_2011_final.pdf.
Quality Assurance Training
Feb. 8 West Central Research and Outreach Center, Morris, Minn. Info: Pork Quality Assurance, 10 a.m.-Noon; Transport Quality Assurance, 1-3:30 p.m.; registration requested to colleen@mnpork.com or (800) 537-7675 or log on to www.mnpork.com
lara@midwestpoultry.com Minnesota Beef Showcase Sale and Agribition March 29-31 Red Horse Ranch Arena, Fergus Falls, Minn. Info: Contact James Scharpe, scharpe8@frontiernet.net or (507) 380-3431
p.m.; registration requested to colleen@mnpork.com or (800) 537-7675 or log on to www.mnpork.com
Quality Assurance Training May 23 McLeod County Fairgrounds Commercial Building, Hutchinson, Minn. Midwest Poultry Quality Assurance Info: Pork Quality AssurFederation Annual Training ance, 10 a.m.-Noon; TransConvention April 25 port Quality Assurance, 1March 13-15 Wells Fargo Bank Building, 3:30 p.m.; registration RiverCentre, St. Paul Fergus Falls, Minn. requested to Info: Log on to www.midwest- Info: Pork Quality Assurance, colleen@mnpork.com or poultry.com, or contact Lara 10 a.m.-Noon; Transport (800) 537-7675 or log on to Durben, (763) 682-2171 or Quality Assurance, 1-3:30 www.mnpork.com
WILLMAR CAMPUS The college invites applications for a part-time Agriculture Instructor to begin January 2012. We are looking for a candidate with strong Agriculture Equipment Mechanics and/or Farm Operations Management experience. Refer to MnSCU Credential Guidelines (License Codes #010300 and/or #010100) for complete details at www.cfc.mnscu.edu. Salary based upon education and experience. Applicants must submit a letter of application addressing qualifications, resume, and copy of college transcripts. For further information or to apply please contact Carl Polding, Dean of Instruction, PO Box 1097, Willmar, MN 56201 (320) 222-5218 Carl.Polding@ridgewater.edu. Position will remain open until filled. Ridgewater College is a member of MnSCU an AA/EEO employer. Ridgewater College is an Equal Employment Opportunity Employer A MEMBER OF THE MINNESOTA STATE COLLEGES AND UNIVERSITIES SYSTEM A Member of HERC Higher Education Recruitment Consortium www.uppermidwestherc.org
“Where Farm and Family Meet”
Minn. National Farmers Organization Convention Dec. 3, 9:30 a.m. Victorian Inn, Hutchinson, Minn. Info: John Zschetzsche, (507) 822-1353, or Joe Neaton, (612) 290-6964
The bottom line, he said, is that producer vulnerability is a concern heading into 2012. Growers need to be proactive in managing their input pricing because input prices could rise even more if crop price prospects improve in the spring.
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rents in case inputs increase and commodity prices stay where they are at now or fall even further.”
THE LAND, DECEMBER 2, 2011
Growing an acre of corn, soybeans or wheat in 2012 will cost producers a lot more than it did this year, says a Purdue Extension agricultural economist.
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