Business
4:28 pm
Mon July 28, 2014

Plummeting Corn Prices Cut Farmers' Profits

Credit wikipedia.org

Good weather and bumper corn crops for the last two years have generated a surplus of corn and, in turn, lower prices for area farmers. 

Susan Fox, Lyon County Agriculture Agent, says prices for corn in the area have declined nearly 50 percent from around $7.50 a bushel in 2012 to just under $4 this year. Fox said farmers were warned.

"Prices in agriculture tend to cycle," Fox said. "But when the price has been high people plant more acreage, and then if the yields are also high that drives down the price.”

Fox said the biggest impact the local economy could see would be from decreased land rental prices if grain prices stay low.

"The price they’re paying for rental is going to be pretty important this year. If they’ve gotten locked into high rental prices then it’s going to be harder to make a profit on that ground," Fox said. "You know, if they’ve been able to keep the price they pay per acre for rent to a more reasonable level, then they’re more likely to be making a profit.”

It has also been a tough year for wheat, according to Fox, but soy is doing okay because of China’s demand for soy oil. She says farmers will feel the hit this year, but it will take a few years of low prices to make an impact on the region’s economy as a whole.