Commodity prices have been dropping, which may leave farmers with a few decisions to make over the coming years.
Agricultural Educator Phil Woolery is with Purdue Extension. He says increased ethanol use pushed corn prices higher in recent years, but incentives to increase production for ethanol have caused a bit of an imbalance. It’s compounded by the value of the dollar – making American commodities more expensive to purchase on the market.
Woolery says profitability is anticipated to decrease for a while.
“So they need to be looking at ways to cut costs to make sure they stay profitable, but they need to be careful about what they cut because certain things you can cut can reduce your yields and then you’ll have a worse position,” says Woolery.
Fertilizers, seeds, and perhaps even fungicides are considered important by Woolery for review.
Price drops in corn and soybeans may lead to an increase in the production of potatoes, tomatoes, and cucumbers over the long term. Purdue Extension is anticipating price moderation at some point in the next few years.
In addition to lower commodity prices, cash rent prices are expected to drop along with them. Woolery says rents have been decreasing in the past year in Indiana.
“Other options that are considered besides a straight cash rent, there’s where you have a base rent, then if conditions are right, let’s say commodity prices go up, then the landowner gets a bigger payout, but then the farmer doesn’t have as much risk in low price years,” says Woolery.
Going along with its educational efforts, Purdue Extension has a weed management seminar in the Knox High School cafeteria on December 14th at 6:00 p.m.
Woolery says private applicator recertification credits can be received during that time. Weed management lessons will also be covered during the seminar.