Taking advantage of dry days between rain systems, farmers made good progress last week on their soybean harvest. Forty percent of the Minnesota soybean crop is now in, compared to a 26 percent average for this time of year.
Tom Mesner is one farmer who's recently spent a lot of time in his fields near Chandler in southwest Minnesota. Taking a break in his tractor cab while his father operates the combine, Mesner says the bean harvest is looking good.
"We've got a nice 15-20 mile an hour wind out of the west, no humidity and it dries these soybeans down. It's excellent," says Mesner.
The yields on his farm are a little better than expected. It was a dry growing season. Mesner worried too much heat had done major damage to his fields. Late summer rains though helped out. About a month ago he and his crop insurance agent inspected a soybean field and estimated a likely yield.
"On our homeplace which is on the Nobles/Murray County line was 37 bushels to the acre. We've done about 50 acres of that field and it's for sure doing that and probably 10 bushels more," says Mesner.
Even more surprising are market prices. Most farm commodities have risen sharply this year, including soybeans. Wheat prices are at record levels mainly because of poor crops in the world's major production areas. Traders believe wheat prices will drop significantly next year if the harvest is better. Soybean prices are more complicated.
“It's a battle royal for acres next year.”Ed Usset
"That is very hard to figure out," says Mesner. "You almost think, where's it going to stop?"
The price of a bushel of soybeans has moved up steadily, more than 60 percent in the last year. For University of Minnesota grain marketing specialist Ed Usset, there's a clearly defined starting point for the soybean price jump. It's the sharp increase in ethanol fuel production.
"Ethanol has really kind of disrupted the markets by demanding, if you will, a lot of acres in corn," says Usset.
Corn is ethanol's main ingredient. Soybean production is down about 18 percent from last year mainly because farmers switched acres to corn. The lower production leads to higher soybean prices as bidders compete for shrinking stockpiles.
Other factors contributing to higher soybean prices include weather concerns in South America and a weak U.S. dollar. Next year could be even more interesting. The ethanol industry will need more corn yet. But if soybean prices stay high, Usset says farmers could be tempted to switch some corn acres back to beans.
"Frankly it's a battle royal for acres next year," says Usset. "The corn market can't afford to give back the acres it found this year. And yet we've got a soybean market saying you know we kind of need a few more acres back here. And we've got a wheat market screaming I need a few more acres."
All of this affects consumers. Rising corn prices have increased meat and dairy costs. Wheat increases will show up in bread and other products. Soybeans are widely used in vegetable oil.
In a southwest Minnesota farm field Tom Mesner has time to consider all these implications while he waits for his father to fill the two wagons parked behind his red tractor. He's got a few more days of work before all the soybeans are harvested.
"We probably take anywhere from five to eight days of beans," says Mesner.
The combine swings by close as it tops off the wagons with soybeans. It's time to move the valuable commodity from farm to storage. Mesner starts his tractor and drives quickly from the soybean field to a gravel road. He raises a cloud of dust as he delivers another load of soybeans to an increasingly hungry market.