Minnesota farmers are expected to harvest slightly smaller corn and soybean crops this fall than last year, in part because fields in some parts of the state have been hurt by too much spring rain, followed, by streak of cool temperatures.
Still, the 1.4 billion bushels of corn that the U.S. Department of Agriculture estimates Minnesota farmers should harvest would be the second largest crop in the state's history. Soybeans should yield about 272 million bushels, about an average crop.
But many parts of the state have potential bumper crops developing, a trend that is reflected nationwide. One that will is the southwest Minnesota farm of Alan Roelofs.
"The majority of the field looks really good," said Roelofs, who farms near Tyler, Minn.
Last week, at the edge of one his corn fields, he snapped off an ear and peeled its husk to quickly calculate its number of kernels.
"Looks like it's probably pollinated about right to the end," Roelofs said as he counted 18 rows. "Lot of kernels on that one."
If the area continues to see sunny weather, moderate rainfall and no early frost, he said, the field could yield more than 200 bushels an acre -- well over the predicted statewide average of 166 bushels per acre.
Nationwide, the corn crop harvest will be the largest ever at 13.8 billion bushels, according to the estimate by the U.S. Department of Agriculture.
Roelofs' nice-looking fields are similar to those in much of the United States.
Nationwide, corn crop will be the largest ever at 13.8 billion bushels, according to the USDA estimate. The U.S. soybean harvest should be the third largest in history at about 3.3 billion bushels.
As a result, there should be plenty of grain supplies this fall, which would send the prices farmers receive for their crops lower.
Although prices rose slightly today because the USDA crop estimates were slightly lower than grain traders expected, the price trend is down.
"Definitely on the new crop we're going to see prices move much lower than we saw in the past year with the drought," said David Bullock, senior economist at St. Paul-based AgriBank.
Bullock said corn prices could slip to as low as $4 a bushel in the next few months -- or half of last year's peak. But he said as the market fluctuates up and down over the next year, the average corn price should be closer to $4.75.
If that happens, he said, most farmers should still be able to make a small profit off their crop.
"I don't see a huge potential for financial stress among crop producers," Bullock said. "If it does get below $4, then definitely is going to be a pretty serious situation probably. But I think if we're looking at around $4.50 to $5, as we are right now with most of the USDA and trade ranges, we're probably not going to look at a lot of financial stress."
Bullock said most farmers are in a better cash position to weather a grain price downturn because the last few years have been very profitable.
Minnesota's corn harvest last year was worth $9.6 billion, up nearly a third from the year before. The soybean crop was up one quarter to $3.4 billion.
However, falling prices are not all bad news for agriculture.
Bullock said the drop in grain prices will benefit several sectors of the farm economy, particularly livestock farmers and ethanol producers who have been battered by recent high corn and soybean prices. They may see better profits now as falling grain prices reduce what they have to pay for supplies.
But some farmers are worried about the declining prices.
Jim Theisen, who farms near Canby in southwest Minnesota, said lower grain prices will hurt the more junior farmers most.
"The younger you are the more vulnerable you are," Theisen said. "You are forced to pay a certain amount of input cost; you're forced to pay a certain amount of cash rent if you want to farm. So I think you're caught in the squeeze."
Grain farmers haven't seen such a financial squeeze for a few years. But some are starting to experience it now.