As farmers approach fall harvest, profits remain elusive even as fields are brimming with corn and soybeans.
A new report from Purdue University and the CME Group showed that falling crop prices are weighing on the minds of farmers.
Earlier this year, farmer sentiment was buoyed by a rally in key commodity prices. But excellent growing conditions led to improved crop-yield prospects — a point of pride for farmers that also has dragged prices lower.
Since June, the price that farmers can expect for corn delivered in December has fallen more than 25% to about $3.25 per bushel — hovering near the break-even point for some growers.
Soybean prices have plummeted by a similar percentage to below $9 per bushel.
Farmers who sell their corn and soybeans on the commodity markets could lose money on their crops, said David Widmar, a Purdue University farm economist.
"I think that's a very real likelihood for a lot of producers," Widmar said.
What farmers are paid for their milk, grain or livestock isn't always enough to cover their costs. Often, they borrow money and tap savings to remain in business.
"As long as you have more equity than liabilities, you keep going... until prices turn around and you're back in the black," said Craig Myhre, a farmer from Osseo, south of Eau Claire.
"I am sure there are some guys burning through their equity now," Myhre said.
Nationwide, the U.S. Department of Agriculture has said, this fall's corn and soybean harvests will be among the largest ever as the crops benefited from favorable weather.
In August, the agency predicted a corn crop of more than 15 billion bushels and a soybean harvest of 4 billion bushels, both exceeding market analysts' estimates.
The massive amount of corn and soybeans would follow other large harvests in recent years, adding to a surplus of crops in storage.
Still, some remain a bit skeptical of the USDA forecasts.
Until the harvest gets underway, farmers and analysts won't know exactly what to expect, said Tom Thieding, spokesman for the Wisconsin Corn Growers Association.
Corn fields that look great from the road could have areas in them that aren't so productive, Thieding said.
Some farmers regret not locking in higher contract prices for their crops when they could have earlier this summer. They were betting the price rally would continue for a while, so they held out for an even better deal.
"It's a little like gambling. You hold on to that winning hand of cards for as long as you can... but pretty soon the game ends," Thieding said.
Corn and soybean prices could remain low as the marketplace absorbs crop surpluses from last year.
There probably won't be another price rally until 2017, said Chris Gorman, manager of The DeLong Co. grain elevator in Union Grove.
Meanwhile, 87% of Wisconsin's corn was reported in good-to-excellent condition, according to the weekly crops report released Tuesday by the National Agricultural Statistics Service office in Madison.
The soybean crop was rated 85% in good-to-excellent shape.
And, "The corn silage harvest (for livestock feed) is in full swing with very good yields and quality," a crops observer from Green County said.
Concerns about summer heat and dry weather are largely in the rearview mirror as farmers are now more worried about too much rain triggering plant mold and hampering the harvest.
"The biggest concern right now is the forecast for more significant rainfall, which we don't need," a crops observer said in the report. Flooding due to heavy rain was being reported Wednesday in southwest and south central Wisconsin, according to the National Weather Service.
More heavy rain hit Wednesday night in parts of eastern and southern Wisconsin.
"It looks like the harvest should be earlier this year, unless we are fighting wet weather," said Myhre from Osseo.
Much of Wisconsin's corn is grown for use as cattle feed in the dairy industry. For the farmers growing it for their own livestock, a low crop price wouldn't matter much.
Farmers who are selling their crops, however, can only hang on for a better day.
"Producer sentiment took a U-turn in August, declining sharply after improving in three out of the four previous months. The spring rally in crop prices fueled some long-run optimism on the part of producers ... but the sharp decline in crop prices over the last two months, with many producers facing cash corn prices below $3 per bushel this fall, eroded remaining optimism," the Purdue University/CME Group report said.
Farmers who are highly leveraged and face continued high expenses are in the most trouble if prices don't improve soon.
The downturn will harm the rural economy, too, as each dollar of net farm income results in an additional 60 cents of economic activity, according to University of Wisconsin research.
This could be a stressful period for rural communities that depend on agribusinesses, according to Widmar from Purdue University.
When farmers have less money to spend, it trickles down through the local economy, he said.