SIOUX FALLS, S.D. (AP) — South Dakota corn farmers grew a record crop last year, but lower prices and questions about how to expand markets will likely be on their minds during their annual convention in Sioux Falls.
Lisa Richardson, executive director of South Dakota Corn Growers Association and the South Dakota Corn Utilization Council, said high prices after the drought led to a huge decrease in exports, and ethanol companies aren't building new plants. The China market is ripe for expansion, but it hasn't opened up enough to have an effect, she said.
Farmers who must decide whether to plant corn or switch to soybeans, oats or small grains need answers to such questions as they make plans for their next crops.
"Is it going to come from exports? Are we going to grow our ethanol industry? Where are we going to get the next billion or 2 billion bushels worth of demand?" Richardson said. "That's really the unknown question out there right now."
Saturday's annual meeting at the Sioux Falls Convention Center will also include panels on nutrient management, conservation and sustainability.
Corn, which sold for about $8.20 per bushel in June 2012, was trading at about $4.28 per bushel Thursday on the Chicago Board of Trade. Last week, corn dropped to its lowest price in more than 3 years on the announcement of a large increase in ethanol supplies, but rose 5 percent the next day after the U.S. Department of Agriculture cut its estimate for last year's corn crop.
Whether South Dakota farmers can pull a profit from current prices depends on many factors. Yields in South Dakota vary widely from year to year, and fertilizer, feed and land costs continue to rise, Richardson said.
"Is $4 break even? Not always," she said. "It totally depends on what your land costs are and it also depends on what your yields are."
Troy Knecht, a Houghton farmer with about 4,700 acres in a corn-soybean rotation, said South Dakota corn growers typically earn about 40 cents to 50 cents per bushel less than the Chicago price.