Schafer sees cheaper inputs by spring

Cattle Market & Farm Reports, Editorials
Dec 2, 2008
Schafer sees cheaper inputs by spring

U.S. farmers have not seen their input costs decline significantly despite the recent drop in energy prices, Agriculture Secretary Ed Schafer said last Tuesday, but he remained confident conditions would improve before growers plant their 2009 crops.

Prices for corn, soybeans, wheat and other crops have dropped after setting record highs earlier this year. A similar decline has occurred in oil, which is down about 60 percent from its $147 per barrel record high posted on July 11. But at the same time, the cost of fuel, fertilizer and other inputs has failed to match the drop in commodity prices, leaving some farmers to spend more to produce a crop, such as corn, than they will get back in the marketplace.

“Right now, there are a lot of issues in corn and soybeans, especially where people would say ‘if I plant this I’m going to lose money?’” Schafer told Reuters in an interview.

“We’re hoping to see come planting time season next spring that the input would have come down commensurately with energy costs.

Things are starting to move in the right direction,” he added. U.S. farmers plant the lion’s share of their corn between mid-April and mid- May, followed by soybeans in mid-May through early June. Still, farmers generally determine how many acres they expect to plant several weeks prior so they can order seed for their crops.

Schafer also said the farm economy remains in good shape despite the turmoil sweeping financial markets around the world.

“Balance sheets are in good shape and we continue to think that the agriculture sector is going to ride through the financial storm as good as anybody,” he

said. Even with the recent declines, USDA has predicted that corn and wheat will post the highest farm-gate price on record at $4.40 and $6.85 a bushel, respectively.

Soybeans would fetch their second-highest average price at $9.85 a bushel, behind the 2007 crop. Farmers also are seeing healthy farm income and export figures in 2008. — DTN