Grain futures aren't only thing on the rise
Tuesday, November 13, 2007HARVEY, N.D. (AP) - Record crop prices combined with average or better yields have produced one of the best years for North Dakota farmers in decades. But commodity prices are not the only thing on the rise.
"People see the higher grain prices, but they aren't seeing the higher prices we pay for our inputs," said Harvey farmer Robert Volk.
"Inputs" is a catchall word farmers use to describe production costs such as fuel and fertilizer. Fuel prices have soared this year, and officials say fertilizer such as nitrogen is poised for a substantial price hike by next spring.
Kent McKay, an agronomist at the North Central Research Extension Center, said he still does not anticipate a big shift away from cereal grains such as wheat, North Dakota's main crop, though some oilseeds might be replaced by crops such as peas and lentils that put nitrogen back in the soil.
"We will have an interesting winter ahead, and acre intentions will shift a number of times these next few months," McKay said.
In the meantime, farmers are enjoying a profitable year. For example, an average acre of North Dakota wheat this year grossed about $240, twice that of 2006, based on average September prices for the two years.
"It's a once-in-a-lifetime occurrence," Robert Carlson, president of the North Dakota Farmers Union, said of the combination of good prices and yields.
The surging farm profits also will help local merchants. "We'll definitely see guys updating their machinery," said Greg Wiest, a manager at Gooseneck Implement in Harvey.