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Higher prices improve outlook for wheat farmersRAPID CITY, S.D. (AP)--Higher production costs and the threat of drought are tempering the outlook for West River wheat farmers who watched the price of their grain double since last year's harvest. Increased worldwide demand for wheat should keep market prices higher than they have been in the past, according to Marty Beutler, economist at South Dakota State University's West River Ag Center in Rapid City. "Even with high input prices, if they get a decent crop, people growing small grains should make a decent income this year," Beutler said. Wheat prices reached $13 per bushel over winter. Many producers sold their crop after last summer's harvest at prices ranging from $5 to $7 a bushel--still considered a very good price. Fertilizer costs have gone up by at least four or five times last year's levels, said Wall area farmer Dale Patterson. A year ago, it would have cost $12,000 to $13,000 to put a minimal amount of fertilizer on 1,000 acres of wheat, Patterson said. This year, that minimal amount will cost at least $25,000. The cost of weed killer and diesel fuel is higher, and rent for cropland is running at roughly $25 an acre in western South Dakota. Last year, farmers were happy to get $5 a bushel. If they get that this year, they'll go broke because of higher input costs, some experts say. Grossenburg Implement stores in Winner, Philip and Fort Pierre have sold out of new John Deere combines, tractors, sprayers and air seeders, owner Barry Grossenburg said. "Both new and used equipment is selling as quickly as we can get it in," Grossenburg said. "We've sold 18 new combines and can't get any more for 2008." He said new tractors won't be available until late summer or early fall. Used equipment is selling fast, too, driving his used equipment inventories down by 50 percent, Grossenburg said. He said the high prices for wheat and other grains are helping all businesses that depend on agriculture. "Everybody in the ag sector is making more money," Grossenburg said. Despite the record prices, South Dakota farmers planted 10 percent fewer winter wheat acres for harvest this year, according to the Agricultural Statistics Service. One reason might be that prices hadn't hit record levels when farmers planted the crop last fall, said Al May, Extension grain marketing specialist at South Dakota State University in Brookings. Another reason is that farmers are reluctant to plant seed in dry ground, which was the case in much of western South Dakota last fall, said John Rickertsen, research agronomist at the West River Ag Center.
Date: 5/15/08 Advertisement
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