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Lower crop prices mean less margin for error next year

This year, seed is more available than last, but there might be less margin for failure

November 28, 2013
By Steve Browne , Marshall Independent

MARSHALL - Last year, there was less seed available for a second planting if needed than this year, but lower crop prices leave less margin for poor yields or crop failures in 2014.

"Lots of guys are wary of the price of corn versus the price of a bag of seed," said Jeremy Jensen, agronomist with Hefty Seed Co. "Corn is going for $230 to $330 per bag, soy for $45 to $50 a bag."

According to Jensen, a bag of corn will plant 2.3 to 2.4 acres, a bag of soy about an acre or less.

At this time, about 50 to 75 percent of seed has been sold, according to Jensen. Farmers generally prefer Roundup ready seed and for corn root worm resistant varieties.

"The good news this year is the supply seems to be in better shape," said Bryan Smith, manager at Centrol Crop Consulting. "Last year we had supply issues. But with more corn on corn planting (in subsequent years) root worm pressure has increased. Drought conditions enhance yield loss, putting stress on top of stress."

According to the United States Drought Monitor, though conditions have improved from last summer, all of southwest Minnesota is still classified as abnormally dry or moderate drought.

"Currently the markets are concerning for profit margins next year," Smith said. "Expenses have stayed the same or gone up, but crop prices have gone down in the last year. It's definitely going to be different this year. There'll be little room for error as far as producing a good crop goes."

Furthermore, crop insurance will be of less help than in the past few years in the event of crop losses.

"Crop insurance is not going to provide the revenue coverage they have had in the past," said Terry Christiansen, owner of Christiansen Crop Insurance.

According to Christiansen, revenue protection will be based on the market price of corn and soy as of February 2014.

"It depends on what happens in the next two months," Christiansen said. "If prices plummet, revenue protection goes down. If the price picks up, protection increases."

 
 

 

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