The Free Press, Mankato, MN

State, national news

February 22, 2013

Government predicts crop prices will drop 30 percent

(Continued)

"It seems to be a better fit for us, and the soil looks good," said Oberholtzer, 29.

Corn prices paid to farmers this year are projected to average $4.80 a bushel, down from $7.20; soybeans will average $10.50, down from $14.30, while wheat will fall to $7 a bushel from $7.90, the USDA said Thursday. Cotton prices are projected to rise to 73 cents a pound from 71 cents.

The lower prices will be a boon to the livestock industry, where the cattle herd has dropped to the smallest since 1952 after ranchers sold animals for slaughter to avoid high feed costs last year, Bob Young, chief economist of the American Farm Bureau Federation, the largest U.S. farmer group, said in a recent interview. Consumers may also be helped later in the year, as replenished inventories will ease pressure on food costs, USDA food economist Richard Volpe said yesterday.

All projections of lower prices and higher supplies are based on assumptions of normal weather, Glauber and Volpe said. For many farmers, last year's drought damage isn't affecting this year's hopes. Jack McCormick's parched Illinois soil last year yielded about a quarter of the corn it normally does. This year, he's making no changes to his planting.

"If I knew we'd have a drought this year I'd plant less corn, and if I knew it would be wet I'd plant more, but I don't know that," said McCormick, who will split almost 1,200 acres near Ellis Grove equally among corn, wheat and soybeans, just as he did last year, before similar forecasts of a record harvest were dashed by dryness.

"We have a good rotation," he said. "We are not going to change our cropping patterns just because of one year of drought."

— With assistance from Jeff Wilson in Chicago.

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