John King Sr., retired farmer and long-standing Rotary member, provided insight on this year's harvest at the club's weekly noon meeting.
“We had a good year farming this year with some money left over,” commented King.
According to King, local farming businesses are getting paid, debts are being paid, and harvesting has begun.
“This is happening because of the price of land and it is changing the way we are doing things,” he said.
King reported that a lot of out-of-town owner are selling, rent is rising, farmers are improving their land and there are now four grain buyers in Helena and rumors of another one coming.
“Farmers are expanding their facilities and now grain is coming to Helena from all over Arkansas and Mississippi,” exclaimed King.
King commented that the basis of farming is going down, according to the farmers' board in Chicago.
“That's the difference between what the board in Chicago will pay you for grain and what the locals will pay you,” explained King.
King added, that's where the community's grain goes, in barges, down the river, shipped to New Orleans and dispersed across the U.S.
“Right now, grain is 15 cents less in Marvell than it is in Helena, 30 cents for Holly Grove, and soybeans are being sold 30 cents over what their paying for,” explained King.
King stated that several farmers have asked if the peek of land has spiked or if it is a trend. He commented that it's a little of both.
“It is caused by low interest in which some land you can buy now at 114 percent and increasing grain prices and investors looking for rent, and out of country buyers, then again of some of this is due to the increase of inflation,” explained King.
King bought his first farm in 1958 when Coke's where just 10 cents a bottle. Since the land is going up in price, the farmers are doing what they normally don't do by cleaning up trash in the fields, and making the land more productive.
“Always remember this, farmers will always produce crops up to the cost of production,” stated King.
King says that increase in demand is needed or we could face a production disaster. Last year farmers had good things. China increased soybean purchasing, ethanol increased production, a drought in the Midwest caused corn to rise to $8 a bushel, and soybeans hit $17.50. A gross in corn is around $14,000 an acre. A gross on soybeans is $875 an acre.
“Now they're talking $4 for corn and $8 beans,” added King.
King says local farmers are behind on planting and running out of time to plant corn. King added that three years ago cotton was $2 a pound, which destroyed the market. Now it is 75 cents net to producers.
Page 2 of 2 - “The cotton markets are changing to corn or soybeans. When I had my gin, there was 26 gins in the county now there are four, with three running only part- time,” commented King.
King stated that this loss was tremendous to the community, gins, warehouses and all the things that go with cotton production. Phillips County maybe down to less than 10,000 acres of cotton and in the distant past, Phillips County once had 100,000 acres of cotton.
“Mississippi is going to have record planting that will reflect 270,000 acres of cotton which is normally a million two, a million short what they used to have,” explained King.
“We can't destroy our markets,” stressed King.
King said farmers could grow some good corn on some land although farmers are having trouble getting a good average. Iowa has the state average of 126 bushels. Phillips County, he said, can beat that.
“Last year we had corn at $7.50 a bushel and 180 bushels of corn per acre which produced a gross around $1,300. Corn will be just like cotton, which will in turn cause farmers to loose their market at that price,” King warned. “It's happening now.”
Soybeans are the main stay of Phillips County. China keeps buying and the price is still good. Brazil is going to be a big time competitor.
“Lines are backed up though and if they ever get that worked out, we're in big trouble,” King added.
“We need to be the low cost producer of rice,” King continued. “We have the water, we have the knowledge and we have the good rice buyers that we can deliver to the port and with the prices of other grains coming down, we can increase the acreage of rice. However this is not a given.”
The window of opportunity is small for wheat.
“You got to get the soybeans back in the ground, get water in them and produce a full harvest with attention going elsewhere as well. So, it's not going to give you much of a window of opportunity which could produce a possibility of 70 bushels of wheat, 50 bushels of soybeans,” commented King. “That's good money,” King added.
Loan officers reported that the farmers are better off than they have been in years past, paying off their loans early, most lowered their debt and most loan officers are now looking for farm loans.
“We are getting better, we're adding more acres with less workers, paying more in pay, housing, paying health and having vacations,” concluded King.