Soybean boom might help reduce monetary losses
Farmers are reeling from a nosedive in revenues from 2015. The one bright spot appears to be this year’s soybean harvest.
Kent Becker, senior vice president of Tampa State Bank, said the large crop and good price could help farmers.
“They’ve been blessed with a tremendous fall harvest of soybeans,” he said. “Soybeans are about the only commodities that are realizing a profit this year.”
Cooperative Grain and Supply listed a cash price of $7.89 a bushel a year ago. Monday the cash price was $8.71.
Marion elevator manager Mike Thomas attributed the better price to large exports to China for its hog industry.
Other grain prices continue to decline under the weight of large stocks. Wheat stood at $2.81 Monday, down from $4.28 a year ago. Milo is $2.49, down 50 cents, and corn is $2.73, down from $3.23.
“Farmers can still make some money with beans, but 70-bushel wheat doesn’t cover costs at this price,” Clay Simons of Lincolnville said.
He works out of Manhattan for Kansas Farm Management Association.
“Our farms recorded a substantial drop in accrual net farm income for 2015 with the average net income at $4,568, down more than 95 percent from the net income level of $128,731 in 2014,” he said.
He acknowledged that farmers are struggling, and there are some similarities to the early 1980s, but said many farmers have better balance sheets now and interest rates are lower.
Becker said his bank is not seeing farmers needing larger loans to cover business expenses.
“Operating loans are not a lot more than they used to be,” he said.
He credits that to farmers reserving funds from years when profits were higher. Going into next year, they may need to borrow more depending on their carry-over, he said.
Simons noted that some farmers are restructuring their debts.
Sara Morey, executive director for Marion County Farm Service Agency, said farm operators with both crops and cattle usually see good market prices for one sector balance out poor market prices for another, but this year both are depressed.
“I don’t foresee it getting any better any time soon,” she said.