SE Minnesota farmers have grain to sell

With the current lower commodity prices and no real significant bump in the short-term forecast, careful planning has become more important than ever for farmers to stay in business.

Balancing lower prices for products farmers produce against the fact that input costs to produce those products haven’t come down yet requires more juggling than in recent seasons. Among some of the more significant costs is land rental, which is squeezing the bottom line of renters all over Minnesota and across the country.

Farmers have grain to sell

Lisa Behnken is a crops specialist with the University of Minnesota Extension office in Rochester. (Photo from AgriNews.com)

“Boy, is that a difficult one (to control),” said Lisa Behnken, a Crops Specialist at the University of Minnesota Extension Service in Rochester. “Rents keep going up and it’s very hard to renegotiate to bring those costs back down. It’s certainly a big part of the equation.

The high costs of renting land may lead to some tough business decisions.   Farmers may shuffle some land around, or even let a particular piece of land go back and not rent it anymore.

“We’ll see if people can do that (make things balance out),” Behnken said, “or if they’re going to let land go and back away from it because they can’t afford that. You may see some land changing hands because of the cost.”

With corn and soybean prices in the tank, are there other opportunities farmers may be looking at for profit? What about small grains?

“It all goes back to where their markets are,” Behnken said. “We have a good group with Extension that do workshops on small grains here in southern Minnesota and a good group of core farmers that grow small grains. They’ve got markets that they’re working with and are locked into.”

She added, “It can be successful, but it’s not just something you’re going to jump into. We don’t have the sell-points here. You need to have convenient places where you’re going to market it to. They don’t buy at every single elevator. It doesn’t mean you can’t do it, you just have to get everything in order, from planting it to marketing it.”

Behnken, who received her Master’s Degree in Crop and Weed Sciences from North Dakota State University, said farmers don’t want to be caught with a lot of grain in their bins in the summer and nowhere to take it.

Speaking of grain stuck in bins, farmers in southeast Minnesota still have a lot of grain to move from the 2015 harvest. Low prices at harvest made farmers very reluctant to sell grain that wasn’t forward contracted.

farmers have a lot of grain to sell

While exact numbers aren’t available, Lisa Behnken of the University of Minnesota Extension office in Rochester said there is quite a bit of grain in area bins waiting to be sold. (Photo from brockgrain.com)

“There are definitely crops to be sold,” Behnken said. “Some probably go forward contracted, but farmers don’t forward contract everything. Prices were down at harvest, so farmers didn’t sell right then, so it goes straight in the bin.”

While it’s important for commodity farmers to get their books in order, it’s equally important for livestock producers to watch their costs too, thanks to a recent run of lower prices.

“Cattle prices are softer,” said Behnken, “but the good side of that is they’re feeding animals much cheaper feed. However, they’re end product has also come down in price too.”

Do lower cattle prices mean it’s time for America’s livestock farmers to start expanding the beef herd? She said it all depends on your books and cash flow that your banker sees in those books.

“It’s all about operating money,” Behnken said. “You still have to go to the bank and make this whole thing cash flow. If I’m in the market to buy some feeders, I still have to have the cash to buy those feeders. Even if a farmer is raising his own corn to feed the animals, he still has to have cash necessary to buy the feeders.”

Cash flow. It’s more important than it’s been in many years, and it’ll determine what kind of decisions farmer make this year, and whether or not they stay in business.

“For some, it’s where their debt load is at,” said Behnken. “What’s my percentage of debt? If you have a more solid equity base, that’s a little different than if you’re highly leveraged. Then, it’s a whole different ballgame.”

 

 

 

 

 

Olmsted county farmer takes Farm Bureau honors

Minnesota_Farm_Bureau_Logo_345x143Ben Storm’s involvement with the Minnesota Farm Bureau only goes back one year.

But it’s been a busy year for the Dover farmer, as Storm won the Minnesota Farm Bureau’s Achievement Award late last year at the state convention. The state award gave him the chance to travel to Florida to compete on a national stage at the American Farm Bureau national convention earlier this month.

A simple phone call from a friend got Storm interested in the Minnesota Farm Bureau.

“A friend of mine called me and told me about their leadership conference,” Storm said. “He thought it would be a good idea for me to go along. I went to the conference last year and that’s how I got involved.”

He added, “Now I’m on the Olmsted County Farm Bureau Board of Directors and I get involved as much as I can.”

Storm said Farm Bureau provides many opportunities to tell the story of Agriculture to people who don’t know where their food comes from.

“We do an event we call Fun with the Farmer,” Storm said, “and we go to elementary schools in the Rochester area and educate kids. Rochester is a larger town with not a lot of agriculture in those schools, so going there and educating the kids on what we do is a lot of fun.”

Storm adds, “Farm Bureau is the reason I get to do things like that. We also spent some time last year at the State Capitol talking with legislators about Ag. I’d never done something like that, and I thought it was a lot of fun.”

Storm said the reason for educating the public about agriculture is apparent when they go to area schools and see the disconnect between urban areas and the farm.

“The more I see it the less surprised I am by it,” Storm said. “You continually see that these kids have no idea what Ag is, because they’re 4 and 5 generations removed from the farm now.”

Storm said winning the Minnesota Farm Bureau Achievement award was quite an honor.

“The Achievement Award is for people whose primary income is from farming,” Storm explained. “There are 3 criteria: your farm operation and growth, the financials of your operation, and your leadership experience inside and outside of Farm Bureau.”

One winner is chosen from multiple nominees.

“You fill out an application,” Storm said, “and on the state level, they judge each of the applications and follow up with interviews. The interview questions are basically for clarification on things in the application they were curious about.”

After winning the state competition, it was on to Orlando, Florida, and the national Achievement Award competition at the American Farm Bureau Convention.

Olmsted county farmer gets national recognition

Olmsted county farmer Ben Storm, at left, winner of the Minnesota Farm Bureau Achievement Award, gets recognized by Derek Helms, American Farm Bureau Federation Young Farm And Rancher Committee member from Arkansas. (photo from Minnesota Farm Bureau Federation)

“There was a group of about 60 people from Minnesota that went down,” Storm said. “It was nice to have people there you knew, but it was a lot of fun to visit with new people.”

He enjoyed learning about different types of farm operations from across the country.

“We spoke with a gentleman from Florida who raises alligators, snakes, and rats,” Storm said. “It’s the kind of thing you wouldn’t think of. You understand alligators and snakes, but I never got to ask him why he raises rats.”

He said farmers who raise different commodities do have common concerns.

“One of the biggest ones right now is lower commodity prices,” Storm said, “and what they’re doing to everybody’s operations. Plus, people are trying to get rents adjusted, because that’s a big cost.”

He adds, “Even the price of inputs is a big concern, and how they need to adjust too.”

Ben runs the family operation in the Dover area.

“Dad (Jacob) is partially retired,” said Storm, “but he still helps out when needed. I farm a little over 1,000 acres, and it’s a 50/50 rotation of corn and soybeans”

He adds,” We have a few sows, and we farrow show pigs and sell them to 4H and FFA kids. That’s more of a project Dad handles.”