Filed under: Corn, Farm, grain storage, harvest, Minnesota, Soybeans, summer | Tags: chicago mercantile exchange, CME, Corn, crop storage, farm, futures price, grain bins, harvest, Minnesota, price prospects, Pricing corn, pricing soybeans, Soybeans
Well, I finally reached the bottom of all of my grain bins. Now they are empty and ready for another harvest.
The 2012 crop year was an exceptional year in my 40 plus years of farming. The year started out wet, and then went dry. Summer heat and blast furnace winds sucked water out of our crops. Despite all of that I had a decent harvest. Not an average crop, but a good crop. The prices were exceptional. I have never had a year when the prices held at such a high level in my entire life. A lot of debts got paid this year.
When you live a long ways from export terminals as we do here in southwestern Minnesota, prices for crops are not always good. Because of that most farmers have large storage facilities for their crops. We also have more livestock farmers and ethanol production plants than you would see closer to export terminals. Our crop prices are usually lowest in the fall during harvest and peak somewhere between February and July. This last year was a bit different. Prices peaked before harvest, and have been on a slow decline ever since.
I started selling the 2012 crop not long after planting. At that point I use “priced to arrive” contracts that set a price and date for delivery. Since I am in the habit of selling most of my crop in the year after it is raised, I deliver very little at harvest and store the rest in on farm storage.
There are two factors that effect prices for the corn and soybeans I raise, the Chicago Mercantile Exchange Futures price (http://www.cmegroup.com/) and the basis (amount over or below CME local buyer is willing to go). For much of 2013 the basis bid has been much higher than I am used to seeing it. For much of my early years in farming we would get quoted crop prices below the CME price. This year they have been routinely over the CME bid.
Price prospects for the 2013 crop do not look as good as they did for the 2012 crop. A year ago the local corn bid was $7.87 for fall delivery, now it is $5.78, soybeans have dropped from $15.73 to $11.75. Drought talk can really push up prices. If the 2013 crop continues to look good, there is the prospect of even lower prices in the future.
So now the spring time use machines are in storage, and summer use ones will soon follow. It’s time to get things ready for fall work. It is also time for county fairs, Farm Fest (http://www.ideaggroup.com/farmfest) and the state fair (http://www.mnstatefair.org/). Maybe I’ll see you there.
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