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Still on shaky ground: After tough year, Siouxland farmers harvest crop, trying to stay optimistic
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Still on shaky ground: After tough year, Siouxland farmers harvest crop, trying to stay optimistic

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SIOUX CITY -- As a delayed harvest season progresses slowly between rain showers, farmers dealing with half a decade of low grain prices continue to push forward, believing that the markets have to swing back in their favor at some point.

They've taken Mother Nature's best shot this year, yet the often-wet conditions weren't enough to dampen everyone's spirit. Farmers like Brent Svoboda know the fate of their corn and soybean crops could have been much worse.

Svoboda, a fourth-generation farmer who farms 1,300 acres of corn and soybeans near Pender, Nebraska, with his wife, Brenda, was able to plant his crops on time this spring. Other farmers nearby couldn't get into muddy fields until late in the planting season. Some fields never got planted.

Buoyed by his good fortune of on-time planting, Svoboda had already finished harvesting beans and was half done picking corn by Wednesday.

"We're right on schedule for when we usually get done," Svoboda said. "Yields surprisingly were better than we thought they would be, given the challenging spring we had."

Challenging only begins to describe the conditions farmers faced this year.

Cold, rainy weather throughout May prevented soil from heating up and drying, keeping many farmers out of soggy fields until well past the normal planting time. Planting for many farmers stretched into June, increasing the likelihood of reduced yields caused by a shorter growing season.

Even if crops were planted on time, frequent rains in October have delayed harvest because of muddy fields and crops too wet to pick.

Those challenges were a continuation of trying economic times many farmers have faced during the last half of this decade. Robust crop prices in 2012 and 2013 are roughly half of what they were during what one expert called the "golden years."

Soybean growers hoping to see markets rebound have faced uncertainty caused by a drop in soybean exports to China as a result of trade disputes. Corn growers have seen the ethanol industry, a major corn buyer, take a hit while federal regulators continually change the rules requiring oil refineries to blend ethanol into gasoline.

In the meantime, prices to buy or rent farmland remain high. So do most other expenses.

"Crop prices were good, so everyone wanted a piece of that. Land, fertilizer, seed and equipment all went up," Svoboda, District 1 Director of the Nebraska Soybean Association, said of the boom years. "Once (grain) prices dropped, those things didn't. We're doing better than we were, but it's still pretty hard to get some things to work your way."

Record yields in four of the past five years throughout much of the region have helped many farmers overcome low crop prices and stay afloat.

Yields this year will not be at record levels. Not even close in some areas.

Farmers who got their crops planted on time likely fared well, said Joel DeJong, an Iowa State University Extension field agronomist.

"Guys that got planted early, once that crop was up and growing, we really had good growing conditions this year," he said.

But because of late planting, many crops, especially in Iowa counties near the Minnesota border, had not reached maturity by the time frost hit on Oct. 11-12. Those producers will see a significant yield loss, DeJong said. Humid conditions late in the growing season led to white mold in many bean fields, severely cutting into yields.

DeJong said soybean yields are generally 10-15 percent lower than a year ago. The range of reported yields, anywhere from 70 bushels per acre to the low 30s, is probably the widest DeJong said he's ever seen.

"It all depends on where you live," DeJong said.

Chuck White, who farms 710 acres of corn and beans near Spencer, Iowa, with his brother, Kevin, was among those delayed by weather this spring. Soybeans weren't planted until the first week in June. Corn was in the ground by mid to late May, with some replanting in June.

Usually finished harvesting soybeans by now, White, who's the District 1 Director of the Iowa Soybean Association, said on Thursday he was about 30 percent finished. Yields are down in the area, he said. White expects a lower corn yield, also. To top it off, the late corn likely will have a higher moisture content, leading to increased expenses to dry it for storage.

It's one more cost for some producers already facing tight profit margins because of lower yields.

"This year, we're not going to have the bushels to make the dollars," said Gary Wright, an ISU Extension farm management specialists who covers 13 Northwest Iowa counties. "We are marginally close to most producers' break-evens."

Any farmer who owns his land can still turn a profit, White said, but younger farmers or those who rent land or are paying off loans from land purchases are going to face a more difficult time.

"It's tough to break even when you're paying rent," White said.

It wasn't that long ago when it was much easier.

RECORD PROFITS

It was just 10 years ago when farmers were seeing some of the highest commodity prices many had ever seen.

Net income and profitability hit record highs in 2009, said Chad Hart, an Iowa State University associate economics professor, crops markets specialist and Extension economist. From 2009-13, demand for corn and beans exceeded supply. The ethanol industry was growing. International demand for U.S. ag products was climbing. During that time, corn was selling for $5-$7 per bushel, soybeans at $13-$17 a bushel. Cattle and hog prices soared.

Drought struck in late 2012, Hart said, leading many producers to sell off livestock they couldn't afford to feed. Some of the largest corn and bean harvests in history were busting bins. Supply began to exceed demand.

"When supplies exceed demand, you see prices decline dramatically, and that's what we've seen," Hart said. "We hit a peak and immediately hit a valley, and we've stayed in that valley."

Crop prices began dropping in 2014 and continued to go lower. Corn sunk to nearly $3 a bushel. Beans have hovered at or below $8 a bushel.

Corn prices have rebounded to $4, in some instances even higher, and beans have rebounded slightly, but the uncertainty surrounding foreign trade and ethanol have kept prices from making a huge comeback.

Still, it could be worse, Hart said.

"Despite the downturn, we still have a lot of farmers doing well," he said.

FARM DIVERSITY HELPS

Craig Moss feeds cattle and hogs and raises corn and soybeans near Hull, Iowa, with his wife, Hayley, and parents, Arlan and Ruth Moss. The product diversity in their farming operation has helped them weather the ups and downs of livestock and grain markets.

"Usually not everything's in the crapper at the same time, and usually cattle and hogs aren't terrible at the same time," said Moss, a fifth-generation farmer who worked for Land O'Lakes after receiving animal science and ag business degrees from South Dakota State in 2006. He began farming part time with his father in 2008 and went full time in 2012.

He planted crops on time this spring, though not in ideal conditions. Soybean yields were off about 15-20 bushels per acre, he said, but the corn yields were higher than expected. The diversity of his operation helps him survive a farm economy he described as "not rosy."

"For us, the combination of grain and livestock is what's keeping us going," he said.

All the corn he grows is fed to his livestock and is chopped for silage or stored at higher moisture, saving him the drying costs. All those cattle and hogs produce a lot of manure, which Moss applies to his fields, cutting fertilizer expenses.

With the challenging economic times, Moss said he and other farmers must spend more time focusing on the business and marketing side of their operations, trying to find ways to make an extra dollar or two on each acre or animal.

"There's opportunity out there, it just might look different," Moss said. "People need to be willing to do things a little differently than they have in the past. There's been some good opportunities. I wish we would have taken advantage of more of them."

Wright, of the ISU Extension, said farmers might consider raising different crops that could be more profitable. Others may simply cut costs by farming fewer acres next year, either leasing less ground or renting their land out to other farmers. Some may decide it's time to get out of farming.

"The number I've heard is 10-25 percent of farmers will have to make a decision on whether to farm next year," Wright said. "There might be different people farming that land."

Don't count Moss, White and Svoboda being among them.

All are optimistic that economic conditions will improve. Market prices will increase. Trade deals will get worked out. Everyone still has to eat, White said, so there will always be demand for the products farmers grow.

"We'll get this year wrapped up, and like every year, you make plans for the next year," White said. "You always look to the next year and say it's got to be better than this year."

Svoboda said he, like other farmers he knows, has tightened his belt, cutting expenses where he can and changing his marketing strategies to maximize profits.

"I'm going to be pretty optimistic about things," he said. "We're going to do everything we have to to make it work. That's all you can do. You just try to cover all your bases and hope for the best and hopefully be surprised in a good way."

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