Sunday, March 20, 2016
As income drops statewide, one Weld grower eyes hemp
By Wyatt Carlon
Artie Elmquist, a farmer in Weld County, will replace his 100 acres of corn with hemp this year to compensate for the plummeting value of the grain.
The price dropped 43 percent in 2015, hitting $3.50 per bushel, well below $6.15 a bushel it was selling for in 2011.
"The only thing that is going to truly cause any big changes on the pricing is weather," Elmquist said. "But to get us from $3.50 corn to $6 it's going to take a pretty significant weather disaster."
To hedge his bets, he's turning to hemp.
Elmquist is among hundreds of farmers who have seen a dramatic drop in crop prices and overall income in the past five years.
The rock-bottom commodity prices resulted in a staggering 56 percent decrease in overall Colorado farm and ranch income between 2011, when it hit a high of $1.86 billion, and 2015, when it dropped to $823.8 million, according to CU's Leeds School of Business 2016 Economic Outlook report.
This year it is predicted to drop again, reaching $718.5 million.
It all started in 2010, after a regional drought in Colorado decimated cattle herds. In order to rebuild, ranchers began buying vast amounts of corn to feed young cattle, driving corn prices to record highs in 2011. By 2014, however, herds had regained normal sizes, and the resulting glut in corn production drove the grain's price down.
The strong dollar abroad has also weakened demand for U.S. farm products, putting even more pressure on farm income, according to Dr. Norm Dalsted, a professor at Colorado State University's Department of Agriculture and Resource Economics.
In response, large-scale growers are pulling back on planting plans and new equipment purchases.
Few are following Elmquist's lead because a mass overhaul in operations - buying new kinds of equipment, fertilizers and seeds, is expensive.
Dan Anderson, a wheat and corn grower in Logan County, said the wisest approach is to hold on until prices rebound.
"The best thing for producers to do is to deal with the market," Anderson said.
Mark Sponsler, executive director of the trade group Colorado Corn, said the trend will reverse itself eventually.
"History shows that the market will come back," Sponsler said. "Farmers will have to cut costs wherever they can in the meantime."
Elmquist said that he understands the risk involved in switching from corn to hemp, but he believes hemp, because it has a wide variety of uses, will be able to maintain its value.