Rising grain prices offer new dynamic, reason for optimism among local farmers

Craig Recker

As area farmers near the end of an encouraging planting season, the market for corn and soybeans is showing signs of strength.

The price for a bushel of corn has doubled in the past year, according to Dubuque County Farm Bureau President Craig Recker.

At this time last year, a bushel of corn was selling for a little over $3.25. The price per bushel is currently fluctuating between $6.50 and $7 per bushel, Recker said. In the last six weeks alone, that price has risen by roughly $1.50 per bushel.

“It has been a pretty substantial increase,” Recker said. “There have been a bunch of factors coming together to make it happen.”

He noted that soybean prices are also seeing steady increases.

Grain prices, like any other commodity, are largely influenced by the dynamics of supply and demand.

Recker said the Iowa derecho took a high volume of corn out of the market. Weather conditions in the late summer and early fall further affected last year’s harvest and further reduced the supply of corn, he said.

Global factors, including a disappointing harvest season in Brazil, have further dampened supply.

Exports markets have also improved, giving crop producers more avenues to sell their product.

Jeff Pape, who grows corn and soybeans near Dyersville, said the rising prices are good news on the heels of multiple difficult years.

“There should be a profit in grain this year — and that is not something we have seen in a while,” he said. “For many of us, it is time to pay some bills.”

The current rise in grain prices does not automatically guarantee that all farmers will benefit. Instead, Pape explained, it will come down to how producers market their crop and when they sell it.

He noted that many local farmers already have sold all of their grain from the previous year, meaning they don’t have any to sell at the current market rates.

He said the sharp rise in price is not something anyone had banked on.

“It did catch a fair amount of people off guard,” he said. “To see prices move so quick and so hard, people didn’t expect that.”

Farmers who don’t have grain to sell at the moment can establish contracts for what they will produce this fall, Recker noted.

This will net them some, but not all, of the price increases in the market. Recker said those who are currently locking in deals for the fall corn harvest are selling it for $5 to $5.50 per bushel.

“It is not a bad idea to lock some of that in for the fall,” he said. “If we have a good crop, that is very profitable.”

A successful planting season has added to optimism.

As April came to a close, Pape said most farmers have either completely finished planting their crop or are close to doing so.

“For our part of the region, things have been fantastic,” Pape said. “The ground is in the best shape it has been in years. We are getting stuff done and not dealing with rain delays.”

Meanwhile, weather concerns elsewhere in the U.S. have many believing that recent trends — dwindling supply and rising grain prices — will continue for a while. In the Dakotas, for instance, extremely dry weather is poised to cut production dramatically in 2021.

Rising grain prices don’t spell good news for all area farmers, however.

Recker said cattle producers use grain for the feed that is given to their animals. High corn prices have substantially increased costs for these farmers, making it harder to turn a profit.

Recker said beef and pork prices are trending in a positive direction, but any gains are poised to be wiped out by the escalating feed costs.

“Those commodities have not increased enough to cover the growing cost of food,” he said. “We are behind overall.”