Lake Pepin phosphorous study vindicates Ag

“Phosphorous is an essential element, and we find it in everything,” said Ashley Grundtner, a former graduate student at the University of Minnesota. However, too much phosphorous has been finding it’s way into lakes and rivers in the Midwest for years, and it’s causing a lot of problems.

Algae bloom is a natural consequence of too much phosphorous in water, and Lake Pepin on the Minnesota/Wisconsin border is a good example. The bloom threatens fish and can negatively affect recreational activities. For years, agricultural runoff was considered the only culprit, so researchers began studying other factors that may explain the increase.

“For 20 years or so, many folks have said Lake Pepin was filling up, and in 1988, they had a big fish kill there,” said Dr. Satish Gupta, the Raymond Allmaras Professor in the University of Minnesota Department of Soil, Water, and Climate. “That led to a whole series of studies by the Minnesota Pollution Control Agency (MPCA) and the Wisconsin Department of Natural Resources (DNR) that decided phosphorous was the problem.”

“I had been working on the source of sediment going back to 1994,” said Gupta. “That was the first year that MPCA came up with the report blaming agriculture for the sediment and phosphorous in the Minnesota River and then in Lake Pepin. Farmers were saying it’s not the agricultural land, it’s the banks along the river that was a bigger source.”

Sloughed River Bank

A sloughed tall bank along the Blue Earth River in Blue Earth County, Minnesota. (Photo taken by Satish Gupta)

He said, “When we started working on this, we took a look at the riverbanks and noticed they were bare. Every year, we get a new crop of dandelions, so we wondered why they weren’t growing on the banks. The answer is simple: they are very unstable and they come down every year. There isn’t enough time for vegetation growth.”

In 2005, Gupta and his students began a four-year study of several rivers in Blue Earth County to determine how much of the riverbanks were running off into the waters. “We found that 2.24 million cubic yards of soil was gone during that time,” said Gupta.

“The next question was how are bank materials reacting with the phosphorous in river waters,” said Gupta. “We knew when you apply fertilizer on the land, particularly phosphorous, it ties up pretty fast. There’s only a small amount for the crop to use, so they have to apply it again next year, and the next year after that.”

That’s what led to Ashley’s graduate thesis paper on the source of phosphorous in Lake Pepin. “If the riverbanks are absorbing the phosphorous we put on our farm fields, are they absorbing other sources of P too?” said Satish. “What is the role of sediments in the riverbank material in picking up phosphorous?”

Ashley Grundtner

Ashley Grundtner collecting sewage effluent sample along a drainage ditch in Blue Earth County, Minnesota. (Photo taken by Drew Kessler)

“We looked at historical records, and we found our rivers had been very polluted going all the way back to when Minnesota was a territory,” said Gupta. “Rivers were thought of as a conduit to carry waste away from the cities. They had virtually every kind of contaminant in the waters.”

Gupta said, “They didn’t have toilets to carry waste to a treatment plant back in that time period. Waste went directly into the river, and phosphorous is very common in sewage.”

South Saint Paul had a large meatpacking industry right on the Mississippi River. Gupta said, “It was set up on the river so they could push their waste in. Ice was also available in the wintertime to preserve meat.” He added, “Records show an ammonium phosphoric fertilizer plant was built along the Mississippi River south of St. Paul. We were not careful about what we put into our rivers.”

“Phosphorous is a basic element you’ll find everywhere in geology,” said Ashley Grundtner, who graduated with a Masters Degree in Water Resource Science in 2013. “We wanted to find out what were the natural levels of phosphorous in riverbank material. What happened to the material when it went through a river process? We then considered human input, like pollution, and what happened to it when it went into a river,” she said.

The group considered basic things like total P in the rivers and riverbanks, and how the riverbanks would absorb Phosphorous, and how much capacity the material had to store the element. From the different scenarios they worked on, they determined levels in Lake Pepin prior to and after 1850.

A tall sloughed bank along the Big Cobb River in Blue Earth County, Minnesota. (Photo taken by Drew Kessler.)

A tall sloughed bank along the Big Cobb River in Blue Earth County, Minnesota. (Photo taken by Drew Kessler.)

The results of their work, published in the Nov-Dec Issue of the Journal of Environmental Quality, showed that fine particles carrying P from eroded riverbanks was the main source of P in Lake Pepin before 1850. After 1850, the human element of pollution added to the levels of Phosphorous available for rivers to carry to Lake Pepin. “The rivers became increasingly polluted, and these riverbank materials are picking it up,” said Gupta. “River modification through locks and dams has added to it as well. Coarser materials are going to get stuck behind the dam, and there was more phosphorous in smaller amounts of fine particles going downstream.”

“Ashley’s paper has shown that most of the phosphorous in the Lake Pepin sediment is industrial and a sewage-phosphorous material, which was picked up by riverbank materials. That doesn’t mean there’s no other source, but that’s a big part of it,” said Dr. Gupta.

Bitter winter has impact on gypsy moth in Minnesota

Minnesota Department of Ag Logo Last winter’s harsh temperatures have resulted in some positive benefits – a decline in the state’s gypsy moth population. The Minnesota Department of Agriculture (MDA) captured approximately 500 moths this year in traps around the state. That’s a major shift from last year’s count of over 71,000 moths.

“We knew going into this survey season that our numbers would be down,” said Kimberly Thielen Cremers, MDA’s Gypsy Moth Program Supervisor. “Studies have shown extended stretches of extreme cold have an impact on gypsy moth eggs as they overwinter. However, we cannot let our guard down over this invasive insect.”

In fact, University of Minnesota research has shown gypsy moth egg masses can survive a harsh winter if located below the snowline.

“While the decrease in moths is good news, we know they will bounce back quickly.” said Dr. Brian Aukema of the forest insect laboratory at the University of Minnesota. “A single surviving egg mass will produce more than 500 hungry caterpillars.”

The placement of survey traps throughout the state also affected 2014 trapping numbers.

“We placed 60 percent fewer traps in the quarantined counties of Lake and Cook this year,” said Thielen Cremers. “We know a reproducing population is established there; 90 percent of the moths caught in the state in 2013 were in those two counties, so this year we placed more traps ahead of that established population to keep on top of the spreading gypsy moth infestation.”

Gypsy moth caterpillars, which are not native to North America, eat the leaves of many trees and shrubs. Severe, repeated infestations can kill trees, especially when the trees are already stressed by drought or other factors.

A male, gypsy moth caterpillar (photo from www.constructionandtreeservices.com)

A male, gypsy moth caterpillar (photo from www.constructionandtreeservices.com)

Last winter’s harsh temperatures have resulted in some positive benefits – a decline in the state’s gypsy moth population. The Minnesota Department of Agriculture (MDA) captured approximately 500 moths this year in traps around the state. That’s a major shift from last year’s count of over 71,000 moths.

“We knew going into this survey season that our numbers would be down,” said Kimberly Thielen Cremers, MDA’s Gypsy Moth Program Supervisor. “Studies have shown extended stretches of extreme cold have an impact on gypsy moth eggs as they overwinter. However, we cannot let our guard down over this invasive insect.”

In fact, University of Minnesota research has shown gypsy moth egg masses can survive a harsh winter if located below the snowline.

“While the decrease in moths is good news, we know they will bounce back quickly.” said Dr. Brian Aukema of the forest insect laboratory at the University of Minnesota. “A single surviving egg mass will produce more than 500 hungry caterpillars.”

The placement of survey traps throughout the state also affected 2014 trapping numbers.

“We placed 60 percent fewer traps in the quarantined counties of Lake and Cook this year,” said Thielen Cremers. “We know a reproducing population is established there; 90 percent of the moths caught in the state in 2013 were in those two counties, so this year we placed more traps ahead of that established population to keep on top of the spreading gypsy moth infestation.”

An example of tree damage from gypsy moth infestations (photo from gypsymothalert.com)

An example of tree damage from gypsy moth infestations (photo from gypsymothalert.com)

Gypsy moth caterpillars, which are not native to North America, eat the leaves of many trees and shrubs. Severe, repeated infestations can kill trees, especially when the trees are already stressed by drought or other factors.

For more information on gypsy moth, go to www.mda.state.us/gypsymoth.

 

November Weed of the Month: Black Swallow-wort

by Emilie Justen, Minnesota Department of Agriculture

(This is part of a series of regular columns by the Minnesota Department of Agriculture on the state’s noxious weeds.)

Black Swallow-wort

Black swallow-wort vines with flowers (Photo from the Mn Dept of Agriculture)

A member of the milkweed family is November’s Weed of the Month. Black swallow-wort (Cynanchum louiseae), also called dog-strangling vine, is a perennial, herbaceous vine that can form large patches and crowd out native vegetation. It was introduced to North America from southern Europe in the 1800s as an ornamental plant, and in 1864 was recorded escaping from a botanic garden in Massachusetts. Since its introduction to North America, it has been found invading abandoned farm fields, pastures, and prairies throughout the Eastern and Midwestern United States.

Black swallow-wort has twining stems up to six feet long. It has dark green, glossy foliage and star-shaped, dark purple flowers with a yellow center. The flowers are only 1/8 inch in size, and develop into a milkweed pod to disperse its seed by the wind.

The plant poses many ecological threats to the Midwest. It outcompetes native plants by forming a large root system that exudes chemicals to prevent other plants, such as the native butterfly milkweed, from growing. Black swallow-wort also threatens monarch butterflies by crowding out native milkweed host plants. In addition, female monarchs will lay their eggs on black swallow-wort but the plant is lethally toxic to the caterpillars after they hatch and begin feeding.  It can also thrive in wooded areas to form a monoculture in the forest understory. In Minnesota, black swallowwort was found growing on the University of Minnesota’s St. Paul campus and successful eradication efforts kept the infestation from spreading.  There are two reports of isolated infestations in Minneapolis.

Black swallow-wort’s characteristics make it a challenge to control. It grows over other vegetation to block light and create tangled masses. As a target weed on Minnesota’s Noxious Weed Eradicate List, it is required by law that all above- and below-ground plant parts must be destroyed. Recommended management practices for black swallowwort include the following:

  • Pulling the plants by hand can be difficult and cause resprouting.
  • Burning and grazing have not shown to be effective.
  • Foliar and cut stem herbicide applications can be effective. For specific herbicide recommendations, contact your University of Minnesota Regional Extension Educator.
  • All management practices for black swallow-wort should include yearly monitoring to ensure the depletion of the seedbank.

To report infestations of black swallowwort or any other noxious weeds on the eradicate list, please notify MDA by email at arrest.the.pest@state.mn.us , or voicemail at 1-888-545-6684 (toll-free).

Not much change to Minnesota fence law

The need for man to fence in livestock has been around a long time, and Minnesota is no exception. Minnesota Statutes, Chapters 346 and 561, cover livestock fencing, and state that a landowner does not need to fence his land against the livestock of another landowner. The livestock owner is required to restrain his livestock from entering the land of another.

Cattle behind a fence

Humans have fenced in livestock as far back as anyone can remember. But who actually pays for fencing in Minnesota Law Books? (Photo from www.extension.org)

However, Minnesota Statute, Chapter 344, supplements the Common Law of 346 and 351. Chapter 344 covers “partition fencing,” and says the livestock owner is not the only one responsible for maintaining the fence that keeps livestock on his land and off his neighbors. A landowner who doesn’t have livestock may have to pay his neighbor to help put up that fence.

“When there’s adjoining land and one of the parties wants to have a fence erected, the other adjoining landowner has to pay for half. That’s the long and short of it,” said Bruce Kleven, President of Kleven Law in Minneapolis, and a lobbyist for the Minnesota Cattlemen and Minnesota Wheat Growers.

Bruce Kleven

Bruce Kleven of the Kleven Law Office in Minneapolis, Minnesota (Photo courtesy of brucekleven.com)

The obligation doesn’t stop when the fence is put up, either. “It says build and maintain in here (the statute),” said Kleven. “If we think that out, say 20 years go by and you have to paint it, the adjoining landowner would pay half the cost.”

Kleven has been involved in agriculture law for years, and said he thinks many farmers may not even know the law exists. “I think most farmers, if they want to put up a fence, they put up a fence, and they don’t even know they could charge the adjoining landowner for half the cost,” said Kleven. “Property law has been around a long time. It’s old. It’s mid-1800’s.”

“The law itself is a territorial law, which means it predates Minnesota statehood,” said Kleven. “When you look at the development of the law, it was put in out state code in 1858 when we hit state hood. There was an amendment in 1866, and then a couple more in the late 1800’s.”

“Since then, it’s been pretty quiet on Minnesota fencing law through most of the Twentieth Century,” said Kleven.

The only recent amendment to the law was applied in 1994. “The amendment said this law applies to the Department of Natural Resources (DNR) like it does to everyone else,” said Kleven. “Elk farming was taking hold at that time. For clarity, I think they said if there’s an elk farm next to a piece of DNR property, this law applies to the DNR like it does to everybody else.”

“I don’t think we’ve had any bills attempting to change the fencing law at the Legislature since 2000 and ‘02,” said Bruce Kleven. “House and Senate members from the Otter Tail County area brought a bill forward, but it never really moved.” He said, “Then, in 2002, House and Senate members from Wright County brought the same issue, and it didn’t move either.”

“What they were trying to do is change the fence law because urban sprawl was beginning to cause conflicts between farmers and non-farmers,” said Bruce. “The non-farmers were moving out into the country and asking ‘why do I have to help pay for your fence?’”

Minnesota hasn’t seen a large number of fencing conflicts in recent years. “There was a court case in 2001 up in Lake of the Woods County,” said Bruce. “The case made it to the Court of Appeals in St. Paul, and the main question there was what kind of fence would be used instead of whether or not one was needed.”

“Some of why it’s so quiet is if you go back 100 years, we had more grazing, cattle, and prairie. Quite a bit of livestock has left the state, and we’re seeing more confinement and feedlot-type activity, so that may be some reasons why we haven’t see a lot of land use conflict,” said Kleven.

“Just think of the Dakotas. Miles and miles of fences, and we just don’t have that here.”

Kleven did find one exception to the state Statues. “The local Township Board, by resolution, may exempt adjoining landowners or occupants from this Statute when their land is less than 20 acres,” he said. “That can get into your suburban landowner who moves a couple miles out of town and only has five acres. They can take it to the town board and get an exemption.”

Salmonella cases linked to raw, frozen chicken entrees

MDA logoST. PAUL, Minn. – State health and minnesota-department-of-health-logoagriculture officials said today that six recent cases of salmonellosis in Minnesota have been linked to raw, frozen, breaded and pre-browned, stuffed chicken entrees. The implicated product is Antioch Farms brand A La Kiev raw stuffed chicken breast with a U.S. Department of Agriculture stamped code of P-1358. This product is sold at many different grocery store chains.

Investigators from the Minnesota Department of Health (MDH) and the Minnesota Department of Agriculture (MDA) determined that six cases of Salmonella infection from August and September 2014 were due to the same strain of Salmonella Enteritidis. One person was hospitalized for their illness.

“Our DNA fingerprinting found that the individuals were sickened by the same strain of Salmonella,” said Dr. Carlota Medus, epidemiologist for the Foodborne Diseases Unit at MDH. “The Minnesota Department of Agriculture collected samples of the same type of product from grocery stores and the outbreak strain of Salmonella was found in packages of this product.”

There have been six outbreaks of salmonellosis in Minnesota linked to these types of products from 1998 through 2008. This is the first outbreak since improvements were made in 2008 to the labeling of these products. The current labels clearly state that the product is raw.
Salmonella is sometimes present in raw chicken, which is why it is important for consumers to follow safe food-handling practices. This includes cooking all raw poultry products to an internal temperature of at least 165 degrees Fahrenheit. “The problem arises when consumers don’t realize that they are handling and preparing a raw product,” according to Dr. Carrie Rigdon, an investigator for the MDA Dairy and Food Inspection Division.

MDA and MDH officials advised that consumers with these products in their freezers, if they choose to use them, should cook them thoroughly. Other important food handling practices include hand washing before and after handling raw meat, keeping raw and cooked foods separate to avoid cross-contamination, and placing cooked meat on a clean plate or platter before serving. Consumers can find more information about safe food-handling practices on the MDH website at: www.health.state.mn.us/foodsafety

Symptoms of salmonellosis include diarrhea, abdominal pain and cramps and fever. Symptoms usually begin within 12 to 72 hours after exposure, but can begin up to a week after exposure. Salmonella infections usually resolve in 5 to 7 days, but approximately 20 percent of cases require hospitalization. In rare cases, Salmonella infection can lead to death, particularly in the elderly or those with weakened immune systems.

Approximately 700 cases of salmonellosis are reported each year in Minnesota.

More information on Salmonella and how to prevent it can be found on the MDH website at www.health.state.mn.us/divs/idepc/diseases/salmonellosis/index.html

Minnesota Organic Conference draws nationally known speakers

The Minnesota Department of Agriculture (MDA) is excited to announce two outstanding keynote MDA logospeakers will headline the 2015 Minnesota Organic Conference in January.

Environmental Working Group Co-founder and President Ken Cook will speak Friday, January 9, while David Montgomery, a geological scientist and author of the award-winning book Dirt: The Erosion of Civilization will speak Saturday, January 10.

Cook is widely recognized as one of the environmental community’s most prominent and influential thinkers of industrial agriculture, the food system, and farm policy. He has written dozens of articles, opinion pieces and reports on environmental, public health and agricultural topics, and is a highly sought public speaker. Organizers expect Cook’s talk to promote lively debate at the conference.

Montgomery will talk about every organic farmer’s best friend: soil.  He is a professor at the University of Washington, where he researches and teaches about how geological processes affect ecological systems and human societies. In his book Dirt, “We see how soil has shaped us and we have shaped soil—as society after society has risen, prospered, and plowed through a natural endowment of fertile dirt,” according to Amazon.com. Montgomery was named a MacArthur Fellow in 2008.

The Minnesota Organic Conference will be held January 9-10, 2015 at the River’s Edge Convention Center in St. Cloud. Learn about the event’s educational sessions and trade show at http://www.mda.state.mn.us/food/organic/conference.aspx. Registration for the conference will open in mid-November, but the public can sign up now at this web site to receive conference information and updates.

David Montgomery

David Montgomery is the author of “Dirt: The Erosion of Civilization.” He’ll speak at the Minnesota Organic Conference on Saturday, January tenth. (Photo from the Minnesota Department of Ag)

Ken Cook

Ken Cook is the President and co-founder of the Environmental Working Group. He’s speak at the Minnesota Organic Conference on January Ninth. (photo from the Minnesota Department of Ag)

 

Settlement looms between Wabasha County and BWSR

The long-running stalemate between Wabasha County and the Minnesota Board of Water and Soil Resources over a significant fine levied against the county back in 2011 appears to be coming to an end. However, one question that county residents have been asking for several years still hasn’t gone away: where is the money coming from to pay the fine?

The Board of Water and Soil Resources (BWSR) recently approached Wabasha County with a settlement proposal, and the County Commissioners will be discussing the settlement this Tuesday at it’s next board meeting. BWSR released the settlement proposal last Friday to interested parties, including several media outlets. Even though the information is now public, the Wabasha County Board is expected to discuss the settlement proposal in a closed-door session. Several residents want to know why.

The standoff between Wabasha County and BWSR first began back in late 2010. The former County Feedlot Officer, Troy Dankemeyer, had been overseeing a couple of Fiscal Year 2011 Feedlot Water Quality Grants, which were intended to help improve the manure management systems of two livestock feedlots. Dankemeyer resigned from his position in December of 2010, and BWSR, along with the Minnesota Pollution Control Agency, found several irregularities in the paperwork for these two grants, some of which were very serious.

BWSR fined the county over $115,000, with an extra $10,000 added to cover the investigation costs. The settlement proposal, however, lowers the total amount of money the county will have to come up with.

The settlement proposal lowers the cash payment from Wabasha County to BWSR down to just shy of $66,000. BWSR will agree to waive the cost of investigating the county, which was $9,294. BWSR will also apply the County’s share of the 2014 and 2015 Natural Resources Block Grants, which totals $24,813 each year, for a total of $49,626. The question still remains: how will the County come up with the money?

“The count doesn’t produce a product or generate it’s own revenue, so they’ll have to go to the taxpayers, unless they do the right thing and bring in the former county feedlot officer and have him answer questions,” said Wabasha County landowner and taxpayer Julie Porcher. Porcher spoke with KAAL TV on a report that aired last Friday night.

Julie outlined the situation and the questions she’d like to see answered in an earlier interview on a previous story:

Wabasha County Commissioner Don Springer was the only board member mentioned by name in the settlement proposal letter from BWSR. It appears Springer may be the only board member involved in the negotiations, much to the consternation of at least one other board member.

“Just thought you should know this commissioner has not been informed or included in any BWSR discussions as it pertains to settlements. This is not good government,” said Second District County Commissioner Deb Roschen in an email to KAAL TV reporter Jenna Lohse, the reporter who broke the story on television Friday night. Deb said, “The Wabasha County Administrator and the Wabasha County Attorney’s office have blocked my attempts at getting information. I was told that the document you showed on TV was not public information.”

However, Michael Plante, the Wabasha County Administrator, insists the county has been above board every step of the way. In an email, Plant said, “The County has cooperated with the Board of Water and Soil Resources efforts to look into any potential issues surrounding the Clean Water Fund Grants. Since the beginning of this situation, the County has worked to provide any documentation that’s been requested by BWSR, and has allowed them nearly unfettered access to all the documentation we have in our possession.   In my opinion, the investigative report by BWSR, which is online for public viewing, was created primarily from documents and information provided by the County.”

Plante went on to say, “On October 8, the County did receive a settlement offer from BWSR, and the board will discuss it during a closed-door session at its next meeting on October 21. Until then, that’s the only comment I will have on the matter.”

The Board will meet Tuesday morning, with the proceedings starting at 9 a.m. The final item on its agenda includes a closed-door session to discuss the BWSR settlement.

 

 

Minnesota cropland rents rising

Cash Rent paid for non-irrigated cropland in Minnesota during 2014 averaged $185.00 per acre, an increase of $8.00 from 2013, according to the latest report released by USDA’s National Agricultural Statistics Service.

Crop land rental rates continue to rise in Minnesota, according to a new survey from the National Ag Statistics Service (Photo from AgWeb.com)

Crop land rental rates continue to rise in Minnesota, according to a new survey from the National Ag Statistics Service (Photo from AgWeb.com)

Non-irrigated cropland rents ranged from an average of $14.00 per acre in St. Louis County, to $276.00 per acre in Nicollet County. Six counties had average rents greater $270.00 per acre and 10 counties had average rents less than $40.00 per acre.

Cash rent paid for pasture in Minnesota averaged $26.00 per acre in 2014, down $2.00 from 2013. Average cash rents ranged from $8.60 per acre in Carlton County to $61.50 per acre in Brown County.

Cash rent rates for irrigated cropland and other states are available online at:
http://www.nass.usda.gov/Data_and_Statistics/index.asp.

Here are some of the cash rents for southeast Minnesota:

Minnesota Farmers are shelling out an average of $8 more per acre for cropland than they did last year, according to a survey from the National Ag Statistics Service (photo from farmprogress.com)

Minnesota Farmers are shelling out an average of $8 more per acre for cropland than they did last year, according to a survey from the National Ag Statistics Service (photo from farmprogress.com)

Olmsted County: Cash rents on non-irrigated cropland average $246 per acre, up from $220 last year.  The average cash rent for pasture is $29 an acre, up from $26 last year.

Wabasha County: Cash rents on non-irrigated cropland average $222 per acre, up from $206 last year.  Cash rents for pasture average $44.50 per acre.

Dodge County:  Cash rents on non-irrigated farmland average $274 per acre, up from $264 last year.  Cash rents for pasture land average $45 dollars per acre, up from $41 last year.

Fillmore County: Cash rents for non-irrigated farmland average $236 per acre, and that’s actually down from $245 last year.  Cash rents for pasture land average $43 per acre, up from $41 dollars an acre last year.

Winona County:  Cash rents for non-irrigated cropland average $222 per acre, up from $206 last year.  Average cash rents for pasture land is $26 per acre, and that’s down from $40 per acre a year ago.

 

 

Commodity prices may head even lower

There are still opportunities for profits come harvest time, but experts say farmers will have to work harder for them (photo from stance ventures.com)

There are still opportunities for profits come harvest time, but experts say farmers will have to work harder for them (photo from stance ventures.com)

There’s no question that commodity prices have taken a pretty big tumble in the last several months. That doesn’t mean profitability has left agriculture, but it does mean farmers will have to work a little harder for it than they did in recent years.

“We’ve had opportunities over the last 5 to 6 years where if you ride the market, you could hit a home run with your marketing by selling at $6.50 or $7 a bushel,” said Arlan Suderman, the Senior Market Analyst for Waterstreet Solutions in Peoria, Illinois. “Now you’re going to have to hit a lot of singles.”

In agriculture, what goes up has to come down. Marketing experts and financial analysts looked at the recent high commodity prices with wonder, and more than a little trepidation.

“It’s kind of like a storm you see on radar. You know something’s coming, you’re just not sure what it’s going to be,” said Bob Campbell, Vice President of the southwest territory, which includes Nebraska and Wyoming, for Farm Credit Services of America (FCS).

Campbell said, “We knew that prices couldn’t sustain themselves at the 7 or 8 dollar level, and really, even over 6.” He added, “In agriculture, the best cure for high prices is high prices.”

Campbell said the downturn in prices is going to hurt producers this year. “It’s happened fast enough that, in this cycle, producers will not have had the ability to adjust their cost structure yet, so we expect producers to incur a loss this year. However, that’s coming on the heels of several years with profits that they’ve never seen before.”

As a result, going into the downturn in prices, Campbell said, “Financially, they’re generally really strong, so they’ll be able to weather the price decrease in this cycle.”

Campbell said, “If there’s any upside at all, we know that low prices are coming, and will continue if you forecast prices on the Board. Producers have some time to really evaluate their cost structure going forward, and find out if they can handle a two or three year window of low prices.”

Campbell said FCS built forecast models in case prices began to drop in land prices during the run-up, and they’ve been doing the same thing with commodity prices.

He said, “We saw the real estate prices escalating, we started a model that said we’re not going to start lending money to producers as this land market escalates. We figured out what land could service on $4 to $4.50 corn, and what kind of debt service it could handle from that point.”

“We created models in our four states that said, based on the production, and based on the area and it’s proven yields, this is the amount of debt we’re willing to extend on that acre of ground,” said Campbell.

Campbell said, “In an area where we thought the land could handle $4,500 of debt over the long term, if someone wanted to pay 10 to 12,000 dollars, that’s fine, because they’re coming in with a lot more equity. Without the equity, we knew in the long term that wouldn’t be sustainable.”

He did notice caution among lenders during the recent run-up in commodity prices. Campbell said, “What we saw going forward is most lenders didn’t follow the rising prices with increased levels of lending or credit. They kept their level of lending pretty moderate.”

Going into the price downturn, Campbell said most grain producers shouldn’t be over-leveraged. “All they really have to figure out now is what’s their cost structure. For fixed cost structure like payments, rent, your land taxes, can you do anything to lower those so we can lower the break-even point?”

Market experts are worried commodity prices may continue lower yet before we see a price floor.  (Photo from ace.illinois.edu)

Market experts are worried commodity prices may continue lower yet before we see a price floor. (Photo from ace.illinois.edu)

They’re even advising their clients to lower their family-living costs. Campbell said, “We know those costs have gone up because they could. Can you bring those back down to some degree?”

Suderman, the Senior Market Analyst at Waterstreet Solutions, said it’s going to be important for farmers to take Campbell’s advice into consideration, because he doesn’t see prices rising in the short term.

“Given outside factors pressuring the markets, and the lack of outside money in the commodity markets, we’re looking at December corn in the area of $2.85, which is lower than the market fundamentals justify.” He added, “I could see November or January soybeans going to the $9.60 area, and if it’s a really big crop, maybe $8.80.”

“Farmers are going to have to be more careful, watch their expenses, and recognize profit opportunities when they come,” said Suderman. “They have to be able to make a business decision and lock in that profit, because opportunities are not going to last very long.”

Here’s an interesting video from KRCG TV in Missouri that may support what the experts are saying about lower commodity prices as we head into the harvest season:

 

 

 

 

 

 

Faribault County Farm Family of the Year

“There’s been a lot of changes in agriculture,” said Duane Erich, a farmer from the Blue Earth area, who began farming full time in 1967.

Duane and his wife, Joyce, have been selected as the 2014 Fairbault County Farm Family of the Year.  Farming has been a part of Duane’s life since growing up on the family dairy farm with his parents and two younger brothers.

“I grew up working on my dad’s dairy farm, which was only about three miles from where I live now,” said Erich. “We usually milked 20 or 30 cows.”  He said, “It was a great experience growing up on a farm.”  Erich said the work ethic he learned during those years was the biggest factor in any success he’s had in life.

The Erich family receives it’s Fairbault County Farm Family of the Year award at the Fairbault County Fair (photo courtesy of the U of Mn Extension Service)

The Erich family receives it’s Fairbault County Farm Family of the Year award at the Fairbault County Fair (photo courtesy of the U of Mn Extension Service)

The Erich’s raise corn and soybeans on their 1,300-acre farm in Fairbault County, and they feed out roughly 300 cattle a year.

Erich said he’s known they were the County Farm Family of the Year for about a month now.  “The Extension Office in Blue Earth called and talked to my wife, and she accepted.  Then I came in, she told me, and I said they must have been running out of names,” said Erich.

“The Fairbault County Fair was last week, and we got our award there,” said Erich.  “When the kids heard we were getting this at the County Fair, they all came home.  All three kids brought their spouses, and we had a good time.”

The oldest Erich sibling, Tim, had the shortest trip home to Blue Earth, as he lives in Mankato.  The other two children had a significantly longer trip to get back home.  “Jon, he’s in Florida at the moment, and Mary is in Nevada,” said Duane.

Duane said agriculture has changed a great deal since he began full-time farming in 1967.  “There’ve been a lot of big changes,” said Erich.  “The prices of our inputs, the prices of our machinery, crop yields have increased, and there’s been a lot more government regulation too.”

There have been a lot of positive changes too.  “Herbicides are a lot better thank what we had then,” said Erich.  “The only herbicides we had back then were a hoe and a cultivator.”