lower than the Southern Minnesota grain bids, depending on the “basis” level in a given area. The “basis” level is the difference between the local bid prices and the December corn futures price and November soybean futures price on the Chicago Board of Trade (CBOT). Basis levels for both the corn and soybean local cash prices and new crop bids have been highly variable in recent months across the Midwest, depending on local grain demand and 2021 U.S. crop production estimates. Local cash bids in Southern Minnesota for corn store on the farm have ranged from $6.50 to over $7.00 per bushel since mid-April, with local soybean price bids over $15.00 per bushel. As prices rose above breakeven levels last Fall, most farmers began selling their 2020 crop. A large majority of the corn was sold from $3.50 to $5.00 per bushel and most soybeans from $8.50 to $10.50 per bushel, well below current levels. A very small percentage of the 2020 crop has been sold at the current high price levels since April of this year, as a majority of farmers had already sold their grain. 8 farmers have been struggling with Many making grain marketing decisions for the 2021 crop. 6On one hand, the current new crop price bids are above breakeven levels for both corn and 4 soybeans; however, farmers do not want to miss a potential run-up in prices, such as occurred with the 2020 crop. A lot of farmers are taking a mixed 2 approach to marketing the 2021 crop, locking in a portion 0 of the crop as a risk management tool, but M A Mopportunities J J A open S O onNtheD keeping Jthe Fmarketing remaining bushels. Looking ahead to the 2022 crop year, one of the big concerns is the likelihood of higher crop input expenses and land costs for next year. The price 8 of most forms of nitrogen fertilizer have risen by 50 to125 70 6 percent since the beginning of 2021. The cost105 of most forms of phosphorus and potassium have risen by 25 to 35 percent since the beginning 4 of the85year. The cost of fertilizer inputs for corn production in 2022 are likely to be 50 percent or more652higher than 2021 fertilizer costs. Crop input costs are also expected to be higher 45 0 chemicals, fuel and repairs in 2022, as for seed, J F M A M J J A S O N D compared to expense levels in 2021. Land rental 25 M also A likely M J to Jincrease A S O N D rates for J2022F are substantially in many areas, as most land rental rates in a given year are based on farm profit levels from the preceding year. Most 2021 land rental 125rates were set in the Fall of 2020, prior to the current rise in commodity prices. 105 Approximately two-thirds of the crop land in many areas of the Corn Belt is under some type of cash 85 rental agreement. Land values have also increased substantially in recent months in many areas, 65 which tends to raise property taxes on owned land. 45 It is quite likely that breakeven costs on cash 25 J for F the M 2022 A Mcrop J year J will A Sbe near O N D rented land $5.00 per bushel for corn and near $11.00 per bushel for soybeans. Based on the latest USDA price projections, the national average prices for
Agriculture/ Agribusiness Corn prices — southern Minnesota
(dollars per bushel)
— 2020 — 2021
20
8
16
6
$6.84
12
4
8
2 0
4
$2.87
J
F
M
A
M
J
J
A
S
O
N
D
0
J
Source: USDA
Soybean prices — southern Minnesota — 2020 — 2021 8 20 125 16 6 105 12 4 85
(dollars per bushel)
$15.39
8 65 2 $7.99 4 45 0 0 J F M A M J J A S O N D 25 J F M A M J J A S O N D J F M A M J J A S O N D Source: USDA
Iowa-Minnesota hog prices
185 pound carcass, negotiated price, weighted average
— 2020 — 2021
20 125 25 16 105 $114.80 22 12 85 19 8 $51.71 65 16 4 45 13 0 J F M A M J J A S O N D 25 10 J F M A M J J A S O N D J F M A M J J A S O N D Source: USDA
Milk prices
Minimum prices, class 1 milk Dollars per hundredweight
— 2020 — 2021 25 22
$16.21
19 16 13 10
$13.87 J
F
M
A
M
20 25 16 22 12 19 8 16 4 13 0 J 10
J
J
A
S
O
N
D
Source: USDA. Based on federal milk orders. Corn and soybean prices are for rail delivery points in Southern Minnesota. Milk prices are for Upper Midwest points.
C. Sankey
MN Valley Business • JULY 2021 • 21
25 22 19 16 13 10
J
J
