As corn prices fall, Minnesota farms worry

By Mark Steil
Minnesota Public Radio
Corn is Minnesota’s biggest cash crop, and in recent years it has delivered big returns to the state’s farmers.
But this year, most corn farmers are expected to lose money. That’s causing a lot of concern among farmers as they negotiate spring planting loans with lenders.
“It’s a bad situation here this year,” said Duane Ommodt, who farms in Watonwan County southwest of Mankato. “Virtually everybody is going to lose money. It’s a bad deal.”
Ommodt said some farmers could lose as much as $300 on each acre of corn they plant. If that happens, even medium-sized Minnesota farms could see the revenue they earn from selling the crop fall more than $100,000 short of what it cost to plant the corn.
The problem is unprofitable crop prices. Several years ago, corn prices were as high as $8 a bushel, and soybeans nearly $18 a bushel.
But today, a bushel of corn sells for less than $4 and soybeans less than $10, said David Bau with the University of Minnesota extension.
“Both prices are losing propositions today on the farming outlook,” Bau said.
As spring planting looms, the gloomy picture is a problem for farmers and lenders alike.
John Bhend, an agriculture business banker for Bremer Bank in Austin, Minn., said farmers are closely examining their seed, fertilizer and other spring planting costs.
“[They want] to make sure it’s a necessity and not a convenience,” Bhend said. “To try and keep their cost of production as reasonable as possible, without reducing yields.”
Bhend said many farmers hope to cut expenses by negotiating lower land rents. Some have been successful, but the reductions have been fairly small, mostly under 10 percent, he said.