Cash grain prices in Lake Crystal, MN, on October 3 were $3.99 for corn and $9.04 for soybeans, which are very good harvesttime grain prices compared to recent years. However, theses prices are well below cash grain prices a few weeks ago. These were the lowest cash grain prices during the 2008, and lowest since postharvest 2007. Cash grain prices a year ago at this time were about $3.25-3.50 for corn and $8.50-9 for soybeans. By comparison, the cash grain prices at this time in 2006 were near $2 for corn and $5 for soybeans. Many growers took advantage of the favorable grain prices earlier this summer to price a significant amount of their anticipated 2008 corn and soybean production. Other producers will likely store a significant amount of their 2008 production, hoping for improved grain prices in the coming months.

A bigger concern with the recent dramatic drop in grain prices may be for profitability and cash flow projections for the 2009 crop year. The cash price for harvest delivery in 2009 at Lake Crystal, MN, on October 3 was $4.42 for corn, and $8.75 for soybeans. Crop input costs for 2009 are likely to be dramatically higher than 2008 costs, especially fertilizer, seed and fuel costs. Land rental rates are also expected to increase significantly in 2009 in most areas. Some analysts expect breakeven crop prices at trend-line yields for 2009 to be $4.50-$5/bu. for corn and near $9/bu. for soybeans. If that is true, the recent sharp drop in grain prices may have pushed 2009 harvest corn and soybean prices to breakeven levels – or lower. This could be an issue in the coming months, if grain prices do not rebound after harvest.

Editor’s note: Kent Thiesse is a former University of Minnesota Extension educator and now is Vice President of MinnStar Bank, Lake Crystal, MN. You can contact him at 507-726-2137 or via e-mail at kent.thiesse@minnstarbank.com.