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Friday, November 13, 2009 11:00 AM

File photo/The Ottawa Herald


A farmer cuts corn earlier this year near the intersection of K-68 and Indiana Road west of Ottawa. Despite a poor economy, many area farmers aren’t experiencing as many hardships as other industries hit during the recession because of high yields and steady market prices.

Farmers’ livelihoods depend on many ‘ifs’

By SHARON STAUFFER, Herald Staff

There are a lot of ifs, Ralph Ferguson says.

If it doesn’t rain again this week, if the ground dries up, if farmers can get the rest of the crops out in the next few weeks and if prices don’t drop and yields hold out — it might end up being a good year for some farmers despite the poor economy.

Ferguson, manager of Beachner Grain in Richmond, said trucks have been rolling in with “phenomenal” yields. Thirty-five to 40 bushels per acre for soybeans is good, he said, but he’s been seeing many making 50 to 60 bushels, and even some corn is yielding well.

“We don’t have it all yet, but if they get it, it could be the best volume, yield year they’ve ever had,” he said.

Some areas received from 1 to 2 inches of rain earlier this week, which set back an already delayed fall harvest because of an excessively wet summer.

“The crops are good if we can just get them,” Ferguson said.

The biggest concern on farmers’ minds right now is getting back in the field to finish harvest, especially with the window for planting winter wheat closing as Thanksgiving approaches.

Grain market



Matthew Vajnar, grain merchandiser at Ottawa Co-op, said the agriculture industry is a little better off this year than it was a few years ago when grain prices skyrocketed to historic highs — even though prices are down 10 to 60 cents in some cases from last year’s prices at the co-op.

“The problem was farmers’ input costs also skyrocketed,” he said. “Fertilizer went crazy, chemical prices went up, too.”

Vajnar said fertilizer costs went down this year and grain prices aren’t fluctuating at extremes even though yields have been good or above average, which helps. But the down economy has weakened the U.S. dollar, which in turn affects export prices and makes them more competitive to foreign buyers, he said.

“It makes our goods relatively cheaper than they would be if the dollar was strong,” he said.

Vajnar said investors buying commodities like gold and oil have spilled over into buying ag commodities like soybeans, wheat and corn, which drives the prices up.

“I think they are putting prices higher than they would be historically,” he said. “So for agriculture for this year, it’s actually not as bad as the general economy as a whole.”

Tale of two industries



Doug Hoffbauer, president and chief executive officer of Frontier Farm Credit, which covers 41 eastern counties in Kansas, including Franklin County, said the livestock industry isn’t doing as well as the grain industry.

For instance, excess in supplies, especially in pork production because of fears the term “swine flu” drew to the product and higher grain prices cause higher input costs, he said.

“It costs them more to produce the product than what they’re able to secure in the market place,” Hoffbauer said, which livestock and dairy producers have been well aware of for the past year.

He said even though the U.S. dollar is weak because of the economy, it may drive up consumer demand going into 2010 because it makes livestock competitive in foreign markets.

Hoffbauer said he’s been impressed with customers who have been willing to work with Farm Credit, which has about 6,000 customers and finances about 40 percent of the farm real estate and about 20 percent of the farm properties in its territory.

Hoffbauer said he has worked with some farmers and ranchers to restructure their operating procedures, but the company still has a high credit quality rating.

“The only question is where the general economy is going,” he said. “Certainly we have concerns because we do have a number of customers also with off-farm employment that helps support their operations.”

Livestock market



Rob Gloss, owner of the Overbrook Livestock Commission, said cattle that brought $1 per pound two years ago still are bringing 85 or 90 cents per pound, and he still has about the same number of buyers and sellers bringing in the same number of cattle.

“Prices are cheaper, but there’s all kinds of reasons why they’re cheaper,” he said. “Like everything else, it cycles.”

He said people might not be spending as much on beef right now, which has a negative effect on producers, but said that’s just part of the process.

“Just like everybody else, they want more for their product,” Gloss said.

Karl Eisele, who farms between Ottawa and Wellsville, said he hasn’t been as affected by the economy as those in the livestock industry. However, he said there’s only room for a small margin of error, which is why the rain needs to hold off and the ground needs to dry or some farmers, like himself with crops still in the ground, will be hurting.

“We’re getting by, but the margin for error is pretty slim,” he said.

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