August 20, 2014

20/08/2014: Young farmers in Montana stressed by low wheat prices

by TOM LUTEY, Billings Gazette

August cash prices for winter wheat are nearing an eight-year low in Eastern Montana, which could make the 2014 crop unprofitable for some, observers say in the Missoulian.
Young wheat farmers under stress

Grain elevators in the northeast and southeast part of the state were offering an average price of $4.74 a bushel on Tuesday, according the the U.S. Department of Agriculture’s Agriculture Marketing Service. One has to go back to 2006 to find a lower August average.
Global wheat production is at a record high, according to the USDA, and the glut is driving down foreign demand for U.S. grain.

That’s bad news for the young Montana farmers who often lease their land and equipment. Profit margins are often much narrower for young farmers, which makes weathering low prices difficult. Six-figure operating loans for a single a year aren’t unheard of for a farm couple with a few years experience under their belt.

“You’re more susceptible to risk when you’re at the beginning stages of your farming career, or midway through your career, because that’s when you’re servicing a large amount of debt because of land payments,” said Bin Von Bergen, Moccasin farmer and immediate past president of the National Association of Wheat Growers.

Read more HERE.

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