Janesville75.2°

Harvest could give Rock County a boost

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JAMES P. LEUTE
May 25, 2011
— As storms go, the one that hit area corn and soybean growers in 2010 was darned near perfect.

An early planting season and timely rains resulted in a big harvest at high prices.


While growers might not see a repeat of 2010's perfect growing conditions, this season's prices could be as good as last year's or better and provide Rock County an economic shot in the arm.


"The potential is certainly there," said UW Extension crops agent Jim Stute.


That's significant for an industry that accounts for about 8 percent of Rock County's jobs and generates an annual economic impact of nearly $1.5 billion, according to a recent UW Extension study.


While a wet spring delayed planting, most growers are catching up, Stute said.


"My guess is that we're pretty much done with corn, and soybeans are wrapping up," he said.


The optimum date to plant corn and soybeans was May 1. Corn must be in the ground by June 1 in southern Wisconsin. Soybeans must be planted by July 1.


Most growers have locked into production contracts at prices similar to or above those of last year.


A report co-authored by several state agencies and educational institutions suggests corn prices will stay at record levels, while soybean prices will remain high thanks to strong exports to China.


"The prices should be similar, if not higher," Stute said.


Last season's corn fetched $5 to $6 per bushel, and the bids Stute has seen for this season's crop are higher than that.


While corn prices fluctuate daily, they should even out in the long run, he said.


As an example of the volatility, Stute pointed to a recent report from the U.S. Department of Agriculture that increased the estimate of stockpiled corn in the country. That caused prices to drop.


But planting delays and flooding in parts of the country are balancing that drop by increasing prices.


the estimate of stockpiled corn in the country. That caused prices to drop.


But planting delays and flooding in parts of the country are balancing that drop by increasing prices.


The upshot, he said, should be higher prices at harvest.


That's good news for people such as Chris Frodel, owner of Mid-State Equipment, a farm implement dealer on Janesville's east side.


Frodel said her business has benefited from the high commodity prices earned by growers.


"They've been very positive for the last 12 months, and we've seen the effects," she said.


M&I Bank, which is a heavy agricultural lender in the area, shares that optimism.


"It is good news that these growers are poised for a pretty good year," said Matt Towns, assistant vice president of agricultural banking at M&I in Janesville.


Towns said cash grain operators are locking in profits that will be generated by harvest prices that are well above average while input costs—namely fuel and fertilizer—have increased only modestly.


"A significant portion of our population works in agriculture, and agriculture is having a good year," he said.


"When a significant portion of the population gets a pay increase, what do they do? They spend it."


It's a trickle down theory that benefits the entire economy from grain elevators and fertilizer sellers to car dealers and restaurants, he said.


Reedy agrees.


"If we continue to have good year, the people involved with agriculture will hire more people and spend more money with the businesses on the periphery," she said. "I guarantee that pickup sales will pick up."



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