Most estimates indicate that corn prices will need to be around $4.25-$4.50 per bushel for corn farmers to break even in 2015. Today, corn prices are hovering around the $3.70–$4 range.
As recently as 2008, the breakeven price for corn was about $3.50 per bushel. If breakeven estimates for 2015 hold true, that means the breakeven point for corn farmers has risen by almost 30 percent in just eight years.
New farm program sign-up
New farm programs passed as part of the 2014 farm bill give corn farmers another tool to help mitigate increasing risks in today’s market. Signing up for the new programs is a three-step process, and requires farmers to make a decision on Price Loss Coverage (PLC), Agricultural Risk Coverage — County (ARC–CO) or Agricultural Risk Coverage — Individual Coverage (ARC — IC).
The University of Minnesota Extension Service is partnering with the Farm Service Agency to offer educational sessions throughout the state to aid farmers in making important decisions about the new farm bill. The Minnesota Corn Growers Association is also sponsoring a series of webinars on the new farm programs.
Homegrown, renewable fuels like ethanol spent much of 2014 caught in a swirling wave of uncertainty. As 2015 approaches, things aren’t looking much clearer.
After the Environmental Protection Agency (EPA) proposed slashing the Renewable Fuel Standard (RFS) and cutting the amount of ethanol blended in our gasoline by about 16 percent, corn farmers and renewable fuels supporters pushed back. EPA and the Obama Administration heard all the negative feedback, but has yet to roll back its misguided proposal.
Instead, EPA never finalized ethanol blending targets for 2014 and hasn’t announced anything about 2015. Expect the uncertainty and confusion surrounding ethanol and the RFS to carry into 2015.
Consumer engagement and outreach
GMOs are harmful. Ethanol is dirty. Farmers don’t care about the environment. These are just a sampling of some of the wild claims corn farmers faced from well-funded anti-agriculture activists and other agenda-driven groups in 2014. Expect more of the same in 2015.
The best way to discredit this type of misinformation is for corn farmers to tell their own story, to be there with answers when consumers ask questions about farming and to continue investing in real-world science that seeks solutions instead of pre-determined talking points.
Combating myths and misinformation about corn farming can be a frustrating job, but it’s something corn farmers need to continue doing in 2015.
The November election may have mitigated the potential for increased ag regulations here in Minnesota (for now, at least), but regulations remain a hot-button issue nationally and will continue to loom locally for the foreseeable future.
The most prominent national ag regulation remains EPA’s Waters of the United States proposed rule. In Minnesota, look for the regulation discussion to continue on ag water quality issues.
Rental rates and land prices
Cropland rental rates rose by as much as 50 percent in some areas of Minnesota from 2010-2014. With about two-thirds of farmland in the upper Midwest under some type of cash rental agreement, rental rates play a major role in a corn farmer’s profitability.
Often, the cost of seed, fertilizer and other inputs will begin dropping as corn prices fall. However, it usually takes a while for cropland rental rates to follow suit and better align with the changing marketplace.
While rental rates may remain high despite the falling prices of corn, land values appear to be dropping. According to a recent land value survey from Iowa State University, the average land value in Iowa dropped by 8.9 percent, only the second time since 1999 that Iowa farmland values declined. In the norther one-third of Iowa, land values fell by 11-13 percent.