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Farmers enjoy profitable year, but concerns loomHUTCHINSON, Kan. (AP)--Reno County farmer Richard Seck sat perched atop his combine, pushing deep into what he calls one of the best years, profit-wise, in his more than 40 years of farming. But as the corn crop he's harvesting sifted up into the header in front of him, he admitted the future is scary. Years like this one come around once in 20 years, he said. Commodity prices of wheat and corn hit historic highs. Now commodity prices are falling to levels not seen in more than a year. The financial crisis, it seems, is hitting the Farm Belt, which, for a while, has been one of the few bright spots amid a teetering U.S. economy. "It's a real concern," Seck said of what next year will bring. "Right now, the mood in farming is that we are cautiously optimistic. We don't expect a year like this to go on forever, but the real concern is what happens next year." Wheat prices peaked at $12 and $13 in March at one Hutchinson elevator. Corn soared above $7 a bushel in June. Yet as Kansas farmers continue to harvest their fall crops, the year of high prices is coming to an end. Corn, wheat and milo prices have declined by more than 30 percent since Labor Day. Corn in late October closed at $3.47, wheat at $5.30 and milo at $2.95. These drops, however, are even more threatening because high costs of inputs like fertilizer, seed and fuel have pushed break-even costs to more than $4 a bushel for corn and $6 a bushel for wheat, said Mike Woolverton, a Kansas State University grain marketing economist. The current financial crunch is part of the issue, he said. So are a bigger crop worldwide and stagnant sales overseas. He expects many farmers will put grain into storage and wait, rather than sell across the elevator scales--hoping prices will rise. The drop in prices also could hurt machinery dealers and equipment manufacturers, Woolverton said. "Farmers were buying a lot of equipment," he said, noting that manufacturers "couldn't keep up with the orders. They still have a lot of orders on the books, but they are fearful farmers will cancel out of contracts." Woolverton said he thought overseas buyers would again start buying and that prices could come up after the harvest is completed. This year, however, should still be profitable for most, if they took advantage of a good situation. Sterling farmer Lindy Howard said he contracted enough this year to make it profitable, adding that he plans to hold onto what he hasn't contracted and see what happens. Seck said he forward contracted much of his corn crop, reaping profits thanks to decent crops. His irrigated corn is making between 155 and 200 bushels per acre. Irrigated soybeans have the potential to make above 70 bushels an acre. He said he'll come off his best year since he started farming out of college in the mid-1960s, recalling 1988 as the last better-than-normal year, when he sold corn for $3.20 a bushel. Still, he said, people's perception was the biggest reason for the drop. There is still demand, he said. He compared it to a classroom of schoolchildren. "No one wants to raise their hand because no one knows if they're right," he said. "All that has changed is people's perception of the situation." Meanwhile, Woolverton said, "corn is too low right now to get enough corn planted this spring." Most farmers, including Seck, will be making planting decisions this winter based on the prices. For Seck, it might mean planting more soybeans, which takes fewer inputs like fertilizer. Arlington's Cairo Co-op branch manager, Dave Smith, said he could see a change in the farm landscape if the prices continue to fall. "When it comes to putting acres in this spring, that will tell the story of how the market makes their decisions," he said. 11/17/08 Date: 11/11/08 Advertisement
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