KOKOMO – Area farmers are wrapping up the planting season in the midst of soaring corn and soybean prices that are on track to become an all-time record.
The spike marks a historic rally from the dismal prices last June when corn sat at around $3.50 a bushel and beans were selling at $8.50.
Today, those prices have nearly doubled.
Mathias Ingle, Howard County Purdue Extension educator, said the spike is giving area farmers a solid chance to make up for decreasing revenue after facing years of slumping prices.
“I can’t say it will be a normal year, because no year is normal in farming,” he said. “But if they had some losses in the past few years, they’re able to make that up right now if they contract correctionally.”
Daryl Maple, who grows corn and soybeans in eastern Howard County, said the soaring prices can mostly be traced to a huge increase in demand from China, combined with an unexpected drop in the supply of corn and beans.
He said farmers last year anticipated a huge stockpile as prices stayed in the tank throughout the summer, causing many growers to consider holding on to their product rather than take a loss.
But that didn’t end up being the case after a derecho destroyed crops throughout the U.S. and prices shot up in August as worldwide demand for the commodities recovered, especially in China.
“They’ve had a kind of insatiable appetite,” Maple said. “That gave us a lower supply than what we anticipated.”
The skyrocketing prices come as a solid planting season has laid the groundwork for what could be above-average yields during harvest.
According to the crop report released Tuesday by the U.S. Department of Agriculture, 94% of corn has been planted in Indiana, and 74% of what has emerged is considered to be in good to excellent condition.
Maple said that although the planting season was slightly behind schedule due to periods of rain, and May presented cooler temperatures than normal, his crops look promising.
“Everything is setting up pretty good,” he said. “We’ll see if we can get some moisture and some heat to get it tall and get it going.”
But although high prices combined with good yield could mean a bumper year for farmers, Maple said he has concerns about what those prices could mean for the future.
“Things look really good right now, but what I’m concerned about is the revenue potential for 2022,” he said.
That’s because the cost of equipment, parts, gas and other farm essentials is increasing right along with the crop prices. Maple said those higher costs will cut into his overall revenue.
“Just because the prices have gone up doesn’t mean the expenses are going to stay the same,” he said. “They’re going to follow suit.”
Maple said he’s also concerned the U.S. could be entering another “supercycle” in which prices spike, but then slump and stay flat for years. That’s what happened in 2012 when corn prices reached a record high of $8.10 and then dropped for the next seven years.
“They always say high prices cure high prices, so we’ll see what happens,” he said.
But Ingle said that if farmers invest right, a solid year in revenue could give them a chance to make much-needed investments in their operations, such as buying new equipment or updating facilities, that they haven’t had in years.
And compared to last year’s humdrum revenue, that’s an exciting prospect for local growers who could see one of the best financial years since 2012.
“It’s going to be a better year for farmers,” he said.
This article was made available through Hoosier State Press Association.