by Dave Bau, Extension Educator, Ag Business Management, U of M Extension Regional Office, Worthington
Table 1: Farmers Coop of Hanska historic cash corn prices
|
Corn Cash |
2011 |
2012/13 |
2013/14 |
2014 |
|
12-Mar |
$ 6.25 |
$ 5.11 |
$ 4.98 |
|
|
12-Apr |
$ 6.00 |
$ 5.02 |
$ 4.85 |
|
|
12-May |
$ 5.78 |
$ 4.80 |
$ 4.73 |
$ 4.50 |
|
12-Jun |
$ 6.56 |
$ 5.83 |
$ 5.14 |
$ 4.79 |
|
12-Jul |
$ 7.60 |
$ 7.33 |
$ 5.64 |
$ 4.95 |
|
12-Aug |
$ 7.68 |
$ 7.60 |
$ 5.95 |
$ 5.39 |
|
12-Oct |
$ 7.31 |
$ 7.34 |
$ 5.80 |
$ 5.41 |
|
12-Nov |
$ 7.44 |
$ 5.88 |
$ 5.42 |
|
|
12-Dec |
$ 6.88 |
$ 5.83 |
$ 5.32 |
|
|
13-Jan |
$ 7.17 |
$ 5.37 |
$ 5.13 |
|
|
13-Feb |
$ 6.96 |
$ 5.06 |
$ 4.86 |
|
|
13-Mar |
$ 7.33 |
$ 5.20 |
$ 5.00 |
|
|
13-Apr |
$ 6.31 |
$ 4.73 |
$ 4.73 |
|
|
13-May |
$ 6.97 |
$ 5.11 |
$ 5.03 |
|
|
13-Jun |
$ 6.80 |
$ 5.05 |
$ 4.97 |
|
|
13-Jul |
$ 5.86 |
$ 4.45 |
$ 4.39 |
|
|
13-Aug |
$ 6.27 |
$ 4.57 |
$ 4.56 |
|
|
13-Sep |
$ 4.39 |
$ 4.24 |
$ 4.27 |
|
|
Mar 12 – Oct 12 |
$6.74 |
$6.15 |
$5.30 |
|
|
May 12 – Sept 13 |
$6.70 |
$5.20 |
$4.95 |
The last two rows of Table 1 compare current crop year prices to future year forward contract prices. Note the comparison between the 2011 crop year corn average of $6.74 to the 2012 average of $6.15 and the 2013 average of $5.30. It would be hard for farmers to sell corn in future years for less than current year prices. As demonstrated, compare the 2012 average of $6.70 to the 2013 average of $5.20 and the 2014 average of $4.95.
The question arises: should a farmer sell future year prices below current year prices and what percentage of the crop should they sell? The answer varies by farmer’s opinions.
The last two rows of Table 2 compare the 2011 soybean average of $14.72 to the 2012 average of $13.98 and the 2013 average of $11.93. It would be hard for farmers to sell future year soybeans for less than current year prices. Note the comparison between the 2012 average of $14.42, the 2013 average of $12.17 and the 2014 average of $11.75. These future year lower prices were much higher than the expected cost of production.
Table 2: Farmers Coop of Hanska historic cash soybean prices
|
Soybeans |
2011 |
2012/13 |
2013/14 |
2014 |
|
12-Mar |
$ 12.95 |
$ 12.37 |
$ 11.60 |
|
|
12-Apr |
$ 14.10 |
$ 12.92 |
$ 12.17 |
|
|
12-May |
$ 13.50 |
$ 12.38 |
$ 11.05 |
$ 10.93 |
|
12-Jun |
$ 14.19 |
$ 13.53 |
$ 11.74 |
$ 11.64 |
|
12-Jul |
$ 16.13 |
$ 15.06 |
$ 11.69 |
$ 11.54 |
|
12-Aug |
$ 17.22 |
$ 16.62 |
$ 12.63 |
$ 12.25 |
|
12-Oct |
$ 14.98 |
$ 14.98 |
$ 12.65 |
$ 12.27 |
|
12-Nov |
$ 14.12 |
$ 12.36 |
$ 12.10 |
|
|
12-Dec |
$ 14.15 |
$ 12.35 |
$ 12.10 |
|
|
13-Jan |
$ 14.30 |
$ 12.43 |
$ 12.18 |
|
|
13-Feb |
$ 14.14 |
$ 11.89 |
$ 11.57 |
|
|
13-Mar |
$ 14.47 |
$ 12.05 |
$ 11.84 |
|
|
13-Apr |
$ 14.07 |
$ 11.26 |
$ 11.37 |
|
|
13-May |
$ 14.94 |
$ 12.18 |
$ 11.97 |
|
|
13-Jun |
$ 15.29 |
$ 12.14 |
$ 11.79 |
|
|
13-Jul |
$ 13.03 |
$ 11.38 |
$ 11.03 |
|
|
13-Aug |
$ 14.51 |
$ 13.16 |
$ 11.43 |
|
|
13-Sep |
$ 13.13 |
$ 12.63 |
$ 11.11 |
|
|
Mar 12 – Oct 12 |
$14.72 |
$13.98 |
$11.93 |
|
|
May 12 – Sept 13 |
$14.42 |
$12.17 |
$11.75 |
Marketing grain involves many components. I would encourage farmers to develop a marketing plan, determine their breakeven prices and what level of grain they are comfortable pre-harvest marketing. After examining your marketing plan’s breakeven price worksheet, current prices for 2021 and 2022 are above expected input costs. Input costs are going up significantly for 2021, so be sure to add sufficient cushion to 2022 input cost estimates. Now compare those breakeven prices to current bids.
Table 3: Current grain bids, Worthington, MN, April 28, 2021
|
Soybeans |
|
|
|
|
|
Corn |
|
|
|
|
|
|||||||
|
Delivery |
Cash Price |
Futures Changes |
Basis |
Futures Month |
|
Delivery |
Cash Price |
Futures Change |
Basis |
Futures Month |
|
|||||||
|
Apr-21 |
15.4375 |
7'2 |
0.1700 |
S1N |
|
Apr-21 |
6.6425 |
-1'2 |
0.1100 |
C1N |
||||||||
|
Jul-21 |
15.3875 |
7'2 |
0.1200 |
S1N |
|
Jul-21 |
6.6425 |
-1'2 |
0.1100 |
C1N |
||||||||
|
Oct-21 |
12.7275 |
-1'6 |
-0.6800 |
S1X |
|
Oct-21 |
5.1875 |
-7'4 |
-0.3600 |
C1Z |
||||||||
|
Nov-21 |
12.7275 |
-1'6 |
-0.6800 |
S1X |
|
Nov-21 |
5.1875 |
-7'4 |
-0.3600 |
C1Z |
||||||||
|
Oct-22 |
11.3550 |
2'4 |
-0.8300 |
S2X |
|
Oct-22 |
4.4525 |
-3'4 |
-0.4500 |
C2Z |
||||||||
These are great prices compared to historic levels and yet it is hard for farmers to sell next year’s crop at so much lower prices. Currently, 2021 prices are lower than cash prices by $1.45½ for corn and $4.08¼ for soybeans. Table 4 lists the average cash corn and soybean prices in Worthington, MN for the last 10 years. For the last seven years, the average corn price has been $3.43 and soybean $9.31 and the high price averaged $4.05 and $10.94. Current cash prices for 2021 corn are at $5.1875 and 2022 corn are at $4.4525 and soybeans are at $12.7275 for 2021 and $11.3550 for 2022.
Table 4: Yearly average Worthington, MN corn and soybean prices
|
Calendar Year Averages |
Corn |
Soybeans |
|
2020 |
$3.37 |
$8.94 |
|
2019 |
$3.73 |
$8.14 |
|
2018 |
$3.29 |
$8.56 |
|
2017 |
$3.13 |
$9.02 |
|
2016 |
$3.17 |
$9.19 |
|
2015 |
$3.48 |
$9.06 |
|
2014 |
$3.85 |
$12.25 |
|
2013 |
$6.04 |
$13.99 |
|
2012 |
$6.82 |
$12.64 |
|
2011 |
$6.53 |
$12.62 |
Farmers should examine their cost of production estimates for 2021 and 2022 and determine if current prices will cover those costs. If these prices are higher than your cost of production, there is no reason not to consider selling grain at these profitable levels. Other tools can be used to give farmers more comfort with preharvest pricing grain, including carrying higher levels of revenue insurance coverage and re-owning the sold bushels with call options. Looking at the last seven years' average high prices, current 2021 and 2022 corn and soybean prices are well above both.
