Ag Economist: Seed Prices Going Up, But So Will Revenues

Farmers will pay significantly more for the seed they’ll plant in 2013 but make up for it with higher returns on their investment, predicts a Purdue University agricultural economist.

Prices for corn seed are expected to rise 5%-7%, 7%-10% for soybean seed and more than 10% for wheat seed, said Alan Miller, a farm business management specialist.

That would mean a bag of corn seed would sell for between just under $200 to more than $300, depending on whether it is a conventional or biotech variety. Soybean seed would go for about $50 a bag, with wheat seed priced in the low $20s per bag.

“Seed supplies could be tight,” Miller said. “This is especially a concern with soybeans, because farmers might surprise the seed industry by deciding to switch to planting more beans next spring.”

He urged farmers to place their orders with seed dealers in the next few weeks.

The summer drought is contributing to the projected price increases but is not the only factor, Miller said.

“We would have expected prices to go up even if we hadn’t had a drought,” he said. “We’ve seen seed prices go up year after year for many years. There was a period of time in the early 2000s when producers were transitioning from non-genetically modified-type seed products to GMO types of seed products, which generally are more expensive.

“Then we had the rise in commodity prices. And, recently, we’ve had two extremely difficult seed corn producing years in a row in the Corn Belt.”

Seed companies increased their planted acreage this year, hoping to make up for poorer production in 2011, Miller said. The drought ruined those plans and had an adverse effect on the crop that survived.

“No one could have planned for a drought of that magnitude,” Miller said. “Seed quality could be a concern next year.”

Fortunately for farmers, they should earn enough from their 2013 crops to more than make up for the costlier seed.

“We’ve done some preliminary estimates and we’re looking at some very high levels of return, with the potential to cover all costs next year, even on our low-yield estimates,” Miller said. “It’s pretty unusual to cover all costs across all three yield levels – low, average and high – in our estimates.”

Miller projects that a farmer growing rotation corn on average-yield soil would generate $560 in crop returns above variable costs per acre in 2013. Rotation soybeans would bring in an estimated $466 an acre on average-yield soil, with wheat generating $372 per acre on that same type soil. If realized, those margins would represent an increase in revenue from this year of 24% for rotation corn, 17% for rotation soybeans and 51% for wheat.

“The economics at current prices for next fall are very good, even with the higher cost of seed and some of the other inputs,” Miller said. “I’m expecting a good opportunity for profits, if we can avoid another drought.”

Leave a Reply

Seed/Biotech Stories

dicamba, Roundup Ready 2 Xtend
Crop InputsASA: No Dicamba On Roundup Ready 2 Xtend In 2016
May 16, 2016
While Roundup Ready 2 Xtend (RR2X) are tolerant to dicamba and glyphosate herbicides, no dicamba herbicides will be approved for Read More
Crop InputsGMO Pipeline Features Consumer Targeted Modifications
April 15, 2016
The newly approved GMO Simplot Innate potato, developed to produce lower amounts of the harmful-yet-natural chemical acrylamide, resist bruising, and Read More
Crop InputsReuters: Chinese GMO Seed Espionage Making Iowa Farmers Uneasy
April 12, 2016
Tim Burrack, a northern Iowa farmer in his 44th growing season, has taken to keeping a wary eye out for Read More
Peanut field
FungicidesArysta LifeScience Receives EPA Approval Of Fungicide Seed Treatment
April 5, 2016
Arysta LifeScience North America recently announced it received approval from the EPA of RANCONA V PD, a broad-spectrum fungicide dust Read More
Trending Articles
Food IT
Industry NewsCalifornia Event Will Mix Ag And Tech Professionals To Explore IT Solutions
June 20, 2016
Silicon Valley is hot on agriculture, and an upcoming event in California will bring together the food and tech industries Read More
Monsanto Luling Plant
Eric SfiligojWhat’s Next For Monsanto?
May 31, 2016
For the folks at Monsanto’s headquarters in St. Louis, MO, it has been an eventful few weeks. Back on May Read More
Soybean Plant closeup
Industry NewsMonsanto Rejects Bayer Bid; Open To More Talks
May 25, 2016
Monsanto Co, the world’s largest seed company, turned down Bayer AG’s $62 billion acquisition bid as “incomplete and financially inadequate” Read More
Eric SfiligojPity The Monsanto Haters
May 23, 2016
An old saying goes thus: “Be careful what you wish for. You just might get it.” Given current events, there Read More
Monsanto Luling Plant
Crop InputsReport: Bayer Eyeing Monsanto For Possible Mega-Merger
May 16, 2016
Bayer AG is exploring a potential bid for U.S. competitor Monsanto Co. in a deal that would create the world’s Read More
Aerial Drone
Precision AgA Deeper Dive Into The Future Of Precision Ag
May 9, 2016
For about two decades now, through the good and the bad times, the ups and the downs inherent in agriculture, Read More
Latest News
Allen Summers Asmark Institute PSM Training
EmployeesAsmark Institute Sponsors 25 ResponsibleAg Auditor Trai…
June 21, 2016
The Asmark Institute has announced plans to provide 25 scholarships through their affiliated State fertilizer and agrichemical associations to help encourage Read More
Kennebec Elevator
CropLife 100Wheat Growers Celebrates Kennebec Elevator Grand Openin…
June 21, 2016
Over 250 patrons and guests were on hand to celebrate Wheat Growers’ Kennebec Elevator grand opening. South Dakota Secretary of Read More
Land O Lakes
Industry NewsLand O’Lakes To Acquire Ceres
June 20, 2016
Land O’ Lakes, Inc. and Ceres, Inc. have announced that they have signed a definitive merger agreement under which Land O’Lakes Read More
Food IT
Industry NewsCalifornia Event Will Mix Ag And Tech Professionals To …
June 20, 2016
Silicon Valley is hot on agriculture, and an upcoming event in California will bring together the food and tech industries Read More
LegislationVilsack Christens WinField Crop Adventure, Talks Monsan…
June 17, 2016
The WinField Crop Adventure grand opening ceremonies at Fair Oaks Farms (near Winemac, IN) welcomed USDA Secretary of Agriculture Tom Read More
Crop InputsFields of the Future: WinField Doubles Down with Agri-E…
June 16, 2016
Land O’Lakes, Inc., joined by Agriculture Secretary Tom Vilsack, today will host Fields of the Future, a live broadcast about Read More
Bayer sign
Crop InputsMonsanto Turns Back Bayer Again
June 14, 2016
Bayer AG’s bid to buy Monsanto Co. for more than $60 billion has hit an impasse that could pose a Read More
Young Corn Field
Crop NutritionNext Generation Of Nitrogen Efficiency Technology Conve…
June 13, 2016
Commodity price projections indicate farmers will continue to face tight margins again this year. Delivering higher yields and more bushels Read More
Industry NewsLa Crosse Seed Acquires Cover Crop Solutions Brand
June 10, 2016
La Crosse Seed announces that it is the new and exclusive owner of the entire family of brands of Cover Read More
ManagementTravel Plans and EU Rejection of Glyphosate, Biotech Cr…
June 9, 2016
Editors Paul Schrimpf and Eric Sfiligoj talk about upcoming trips and the latest in the European Union’s moves against glyphosate Read More
Aspire with Boron
Crop InputsStudy: Aspire with Boron Ups Alfalfa Yields
June 8, 2016
Alfalfa growers are successfully improving yields through the cutting season by applying an important micronutrient. In a recent study, The Read More
Industry NewsAGCO Announces Tragic Death of Longtime Employee
June 8, 2016
It is with deepest regret that we announce the passing of our dear friend, colleague and customer advocate-in-chief Kevin W. Read More
Wheat Field North Dakota
Industry NewsBASF Inks Northern Seed for Clearfield Wheat R&D Li…
June 6, 2016
BASF has licensed Northern Seed LLC to perform research and development of BASF’s proprietary and patented Clearfield technology in wheat. Read More
ManagementBayer/Monsanto, EU/Glyphosate, Corn/Soybeans
June 2, 2016
Editors Paul Schrimpf and Eric Sfiligoj discuss the latest regarding industry mergers, the glyphosate debate in Europe, and an update Read More
Growers looking at soybeans
Industry NewsKoch Licenses 2 Marrone Products For North American Dis…
June 2, 2016
Koch Agronomic Services (Koch), with support from its affiliate, Koch Biological Solutions, has secured exclusive rights to sell REGALIA Rx Read More
Gypsum
Industry NewsBeneficial Reuse Management Launches GYPSOIL BLENDABLE
June 2, 2016
Beneficial Reuse Management (BRM) has introduced GYPSOIL BLENDABLE, a new high-quality pelleted gypsum fertilizer that supplies 17% sulfate sulfur and Read More
StewardshipAgrible Joins Field To Market To Pursue Sustainable Sou…
June 1, 2016
Agrible, Inc. has joined Field to Market: The Alliance for Sustainable Agriculture as an associate member. As a leading multi-stakeholder Read More