News

Current grain prices could make for a difficult ag season

By Scott Wagar

01/20/2015

With declining grain prices at the present moment throughout the nation, local ag producers could see a difficult time this grain season, unless they are willing to diversify outside of producing grain.

“The reason we are seeing such poor grain prices is because we are looking at a record year across the board in terms of production for both corn and soybeans,” said Jared Nelson, county extension agent for Bottineau County. “With the supply so large, it has created less of a demand for these crops. 

“Also, with the wheat, with Russia’s poor ruble, many countries have been buying wheat from them that would typically buy from the United States,” Nelson added. “This in turn also hurts the United States because of its strong dollar currently causing many countries to look elsewhere to buy some of these grains where it will cost them less money.  For many of the other crops grown in North Dakota, the yields also continue to grow creating a larger supply then what is needed.”

Nelson said that in the past few years, grain prices have been productive for agricultural producers, but the nation hasn’t seen prices this low since 2009.

“In 2009 almost every crop across the board shares a similar price as it does to today’s crops,” Nelson said. “And, once again in 2009 many of the countries had an ideal growing season creating a large supply and less of a demand.”

With grain prices at an all time low, Nelson stated that farmers will have to take a different look on how they will produce their crops this year. 

“With current grain prices the way they are many growers are going to have to look more closely at the prices of different products needed for their operation,” he said. “I would strongly encourage those that do not already have to utilize the NDSU Crop Budget found online to help develop a plan to help avoid losing too much of a profit. Also, many producers will have to look at maximizing their profit, instead of maximizing their yield.”

Although farmers who strictly stay to grain, those ag producers who grow grain and maintain livestock should see a more profitable year in 2015 than those who just grow grain. 

“What is happening with those that diversify between crops in livestock is no different then what many crop growers in the area do. Like crop growers trying to spread out the risk by utilizing different crops, crop producers with livestock take it one step further,” Nelson said. “With the record high livestock prices we had this year; many of those that raised livestock can utilize these prices from selling their cattle to subside the not so great grain prices we are experiencing.”