FRANKFORT, Ky. — With fall in full swing, signs of the changing season can be found across the region including farmers harvesting their crops.

Whether it is an acre of pumpkins to sell at a roadside market or thousands of acres of corn to feed the country and the world, this is one of the busiest times of the year for producers.

With that comes concerns about crop and market conditions. While nature plays a big role in taking care of the crops, even as unpredictable as it can be, the market situation for those crops has proven to be just as erratic, creating issues all their own, especially for tobacco producers.

The condition of the state’s tobacco crop has been consistently good all season as many producers felt like an increase in production for 2014 was needed as prices hit a post-quota buyout high last year.

But the markets told a different story with some producers receiving cuts in this year’s contracts and others worrying if all they have grown will find a home. Production is estimated to be up 9 percent over last year, and yield is projected to increase by 200 pounds per acre if the latest data from the USDA holds true.

Rod Kuegal, president of the Council for Burley Tobacco board of directors, said an over supplied market could become a problem for producers.

“I’m concerned with what’s happening in flue-cured. We knew it wouldn’t take long to get back to an over-supplied market and we’ve done that,” he said. “Usually when that happens, the farmer is the one that suffers, especially one without a contract. And I hope they will be able to find a home for their product, but in a market like this, it’s important to have a contract.”

Kuegal, who is a producer in Owensboro, Ky., said there are some burley growers that don’t have contracts this year, but for the most part especially in the western part of the state, most producers do. “We don’t have an auction market near us, so we don’t take that risk,” he said.

Most burley warehouse auctions faded out of existence when federal quota buyouts came about. But there are still a few in the central and southern parts of the state.

“We’ve got a good crop and a nearly perfect curing season so far, and this should be a high quality crop that gets to market. But what happens in flue-cured happens in burley. It’s not even always the same supply scenario, but it’s generally the same purchase scenario.”

The labor market has been another big challenge for tobacco producers as reliable work crews have been harder and harder to come by.

Kuegal said in his part of the state most growers have stable crews, including H2A workers, but that isn’t always the case in other places.

“I’m H2A and had the same crew for 22 years,” he said. “But I know there are a lot of growers near Lexington (central Kentucky) that depend on the same person that came last year to be there again. Sometimes that happens and sometimes it doesn’t. Certainly with immigration as tight as it is, there are fewer of those types of workers, and they’re tougher to get.”

There is immigration legislation waiting for passage in Washington that contains provisions for agricultural workers. Kuegal said he hopes by next year, legislators can get together and get some kind of immigration reform bill passed.

Corn growers and falling prices  

The general consensus among corn growers has been that if prices fall below $4 a bushel, they would start losing money with input costs being what they are. That could be the case this year as a national monster crop is being harvested.

Current corn prices are in the $3.25 range. Russell Schwenke, president of the Kentucky Corn Growers, addressed members via the organization’s website recently. 

He noted that an AgriVisor analyst pointed out that the price of corn has dropped so much that an ounce of gold can now buy more than 370 bushels of corn, the most since 1975. 

Part of that decrease in price may have to do with increased stocks. According to the Grain Stocks report released last week by the USDA’s National Agricultural Statistics Service (NASS), “there were 1.24 billion bushels of old crop corn in all positions as of Sept. 1, up 50 percent from the same time last year. Of the total stocks, 462 million bushels of corn were stored on farms and 774 million bushels were stored off the farm, up 68 and 42 percent from the prior year, respectively.” 

Schwenke painted a bit of an optimistic picture of the situation by saying, “While many of us in grain production obviously see below breakeven prices as a detriment to our farm enterprises, this may provide us an opportunity to build our customer base.”

That would include, wrote Schwenke, the idea that now would be a perfect time to strengthen alternative, renewable fuels. Cheaper corn means cheaper ethanol, which translates to cheaper prices at the pump for ethanol blended fuels.

Schwenke also mentioned the revival of livestock production as being another exciting opportunity. 

“Cattle prices are high right now, and livestock producers are able to make some money. As a beef producer myself, I know that growing beef cattle numbers will help increase demand for grain,” he said.

Schwenke finished his message to producers by stating, “The greater supply this year will help us weather any future storm that may come up and proves that long-term infrastructure is crucial to our success.”