Graph by Brett Holton
Surging grain prices hurt area farmers
High grain prices across the nation are driving up expenses for area livestock farmers.
Increasingly, they are feeling the pinch.
"We have some people around here who aren’t going to survive if they don’t change their management approach,” said Rockbridge County Cooperative Extension Agent Jon Repair.
Rockbridge County has almost 800 farms, most of which raise beef cattle. The area also has significant poultry and dairy operations. All of those animals rely heavily on grain products.
Prices for corn, wheat and soybeans are hitting record highs on agricultural markets. Corn this week was trading for $5.09 a bushel, soybeans for $13.47 a bushel, and wheat for $9.09 a bushel on the Chicago Board of Trade. In January 2004, corn hovered around $2.80 a bushel, wheat was about $4 a bushel and soybeans about $8.30 a bushel.
Dan Vance at Edward Jones Investments said he expects a continuing trend of high grain prices because of increased demand for ethanol and a weak dollar. The weaker dollar makes it easier for foreign markets, including China, to feed their growing demand for food by buying from the U.S. Ethanol, a form of alcohol that can replace gasoline, is usually made from corn, decreasing the supply of corn for food.
Prices for farming essentials such as seed, land and fertilizer have all risen with the demand for grain. Margaret Ann Smith, Valley District young farmer chairman with the Virginia Farm Bureau, said fertilizer costs 80 cents a pound now, compared to 17 cents five years ago.
Smith and her father, county Supervisor Mack Smith, sell grain to local co-ops rather than feeding it to their cattle. Much of their grain ends up feeding poultry in the region.
Mack Smith, who has one of the area’s largest cattle and grain operations, feeds his cows pelleted distiller’s grain, a byproduct of ethanol manufacturing. Because distiller’s grain is not in high demand for other uses, the price has not shot up quite as high as those for other products. Still, distiller’s grain is running about $200 a ton this year, compared to about $130 last year.
Repair, the county extension agent, says livestock farmers have been looking for alternative feed sources. Byproducts from factories that produce snack cakes, chocolate and pasta have all found their way into feed bins.
In addition to high grain prices, area agriculture was hit hard by a drought last year, which took a toll on hay for livestock. Large numbers of cattle were slaughtered to avoid the high cost of feeding them.
Mack Smith said last year truckloads of cattle were forced to wait for days at slaughterhouses in North Carolina. His own grain crop, however, withstood last year’s drought because of good yields from his land in river bottoms.
If grain prices stay high, Repair said, the area’s part-time and marginal farmers will be the hardest hit.
Produced by
Washington and Lee
journalism students.
Lead Supervisor:
Prof. Brian
Richardson
Prof. Phylissa
Mitchell
Reporting supervisors:
Prof. Doug
Cumming
Prof. Pamela Luecke
Technical supervisor: Michael Todd