After several successful years, the prices for all of Minnesota’s main crops have seen a drastic drop—as much as half for one crop in particular.
After high commodity prices dominated the early ‘10s, the price of every main Minnesota crop is now in a drastic decline. And the new price pinch on corn, soybeans, sugar beets and wheat is putting a strain on the state’s rural economy.
MinnPost explains that though the larger economy suffered during the late ‘00s and early ‘10s, agriculture did exceptionally well. That was partially because of the expansion in export markets, as the government began streamlining trade between the U.S. and international markets.
Farmers took in an average of $5.01 per bushel of corn in 2010, $6.09 in 2011, and $7.00 in 2012. But the price of corn is now as low as $3.37 in the Minneapolis area, and $3.15 in the Rochester area.
Soybeans and wheat both met a similar fate. After taking in an average of $10.90 a bushel in 2010, $12.40 in 2011, and $14.20 in 2012, soybeans are now earning less than $10 a bushel. Wheat, which garnered $6.10 a bushel in 2010, $8.06 in 2011, and $8.65 in 2012, is now going for an average of $5.39.
With corn accounting for 45 percent of Minnesota’s crop production and soybeans for 33 percent, a price of even $2.60 cheaper per bushel eats away at a substantial portion of the agricultural community’s profits. The MinnPost article explains that for a farmer with 500 acres, that translates into a loss of $195,000 of revenue.
Those lower profits create a ripple effect throughout the community: farmers can’t pay back their loans as quickly, don’t buy as much equipment and more.
The low commodity prices are proving especially frustrating this year since it’s been such an outstanding year for Minnesota’s crops. The Star Tribune reports that as of mid-June, 80 percent of corn crops had been rated as good or excellent, as had 76 percent of soybean crops, 81 percent of sugar beet crops and 76 percent of spring wheat crops.
Minnesota livestock farmers, on the other hand, are doing very well, as the prices of beef cattle, steers and heifers, cows and calves have all increased considerably over the past five years.
