February 2008

Current high commodity prices make now a good time to market a little grain, said a University of Nebraska-Lincoln specialist.

Paul Burgener, ag economist for the Panhandle Research and Extension Center in Scottsbluff, recommends that producers take advantage of a short-term opportunity to sell 10-20% of their corn, wheat or soybeans.

Demand for grain is high right now, so prices are high, but volatile, Burgener said. High grain prices have increased demand for grain production inputs as well, he said. U.S. producers are competing globally for materials like fertilizer and fuel, which are produced overseas at a time when the dollar is weak compared to foreign currencies.

What's true of ag chemicals and fuels is also true of capital equipment. High grain prices have encouraged producers worldwide to upgrade equipment, Burgener said. That demand has driven prices of both new and used equipment higher.

Similarly, crop insurance has increased in proportion with crop prices. In such a volatile market, Burgener advises producers to be diligent in saving every dollar possible on input costs in order to maximize profits at the end of the season.

The current market situation presents both opportunities and challenges for the producer who takes control of costs, he said.

Faith Colburn
Communications Specialist
UNL West Central REC