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Farmers; 'Good outlook for 2021 season'

Farmers are keeping high commodity prices in mind while preparing for the Spring 2021 Planting Season.

Posted: Jan 26, 2021 11:05 AM
Updated: Jan 26, 2021 11:15 AM

HOWARD COUNTY, Ind. (WLFI) — The Spring 2021 planting season is right around the corner. With high commodity prices in mind, farmers are in a 'good position.'

Assistant Professor in the Department of Agricultural Economics at Purdue, Brady Brewer, says there are multiple things to keep in mind that could affect how the 2021 crop season plays out.

"At the end of 2020 the USDA increased their farm income projections," said Brewer. "So we're actually above the 10 year average in terms of USDA, the farm income for the national forecast."

Brewer says this is a positive sign.

"We're really entering the 2021 crop year, I don't want to say on a high note, that's probably a little optimistic," said Brewer. "But definitely in a good position."

Howard County Farmer and Pioneer Sales Support Supervisor, Roy Cooper, owns and operates his family farm.

"It got started just by wanting to continue the legacy of what my grandpa and great-grandpa started you know 100 years ago," said Cooper. "The house we live in is where my grandparents lived and my mom grew up."

Right now, he's happy with the high commodity prices we're seeing.

"Being around farming for the past 10 to 15 years, I've really only ever seen commodity prices this good once in that time," said Cooper. "Being able to predict what is going to happen is very challenging."

Cooper and Brewer both talked about the trade war with China. Brewer said China is helping drive these high commodity prices we’re seeing.

"China is buying more products here lately because there is not enough product on the international market," said Brewer.

When reviewing the report from the USDA from 2020 data, Brewer noticed something he’s going to keep his eye on.

"Upwards of 40% of net cash farm income for farmers in 2020 was from government program payments," said Brewer. "That's concerning."

Brewer believes this is concerning as we have a transition of government and the lingering effects of the trade war and the COVID-19 pandemic.

"If those payments were to stop, there could be some cash flow issues in the farm economy," said Brewer.

For now, Brewer says the commodity prices for corn and soybeans are showing positive signs.

“The prices for corn and soybeans, specifically in Indiana, are at pretty high levels," said Brewer. "That's providing some really positive signs as we move forward here into the 2021 crop season."

"A lot of people think those prices might go higher," said Brewer. "I'm probably a little more cautiously optimistic about what they will do."

Cooper says it can be a tricky supply and demand situation.

"The agriculture economy is very global based," said Cooper. "It's a tricky supply and demand situation."

"Where commodity prices are now is very exciting," said Cooper. "If we end up having average yields across the country, I hope the commodity prices stay where they are."

"Now, if we have an inadequate planting season like we did in 2019 when we didn't start planting until June, that can have an impact on the commodity prices too," said Cooper.

When thinking ahead to the spring, Cooper gave some advice to local farmers.

"Being around this area, I would start with getting a game plan," said Cooper. "What were you successfully able to accomplish on your farm and were your yields good in certain situations and not as good in others."

Cooper recommends picking a commodity to raise throughout the season that was overly successful.

"If you sold your entire crop right now, with the prices we're seeing, you should be making a profit," said Cooper. "It's one of those things where you don't want to be too greedy and hold out on higher prices."

With that in mind, Cooper says farmers could go ahead and lock-in a portion of their farm right now.

"I would say to lock in a portion of your farm right now that you're willing to put a little bit of risk with," said Cooper. "If you're feeling like you can't afford that risk, maybe back it up with some crop insurance or things like that."

While Cooper prepares for the 2021 crop season with the high commodity prices, there's one goal he continues to work towards.

"I want to be able to continue the growth on our farm," said Cooper. "I want to be able to pass what my wife and I are building now to my son and future children."

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