Nebraska Grain Farmers Hit An Economic Boom With Corn Crop Thanks To Technology Rising grain prices may spell bad news for consumers. But for corn growers, there's hardly been a better time for business. Global market conditions and new farming technology have boosted the state's farmers toward the top of the struggling U.S. economy.

What Recession? It's Boom Time For Nebraska Farms

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From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.


And I'm Michele Norris.

In America's corn belt, farmers once considered $3 a bushel an excellent price. In more recent years, $3 corn is seen as the bottom price. In fact, it now costs more than $3 just to produce a bushel of corn. Over time, farmers have seen the price rise to five, then $6 with similar leaps for soybeans and wheat. Those rising prices may put the fear of inflation into many consumers. But in places where wheat and corn are grown, high prices have been a godsend.

SIEGEL: I went to one of those places last week - Nebraska. Economist Ernie Goss, of Creighton University in Omaha, sums things up this way.

Professor ERNIE GOSS (Economics, Creighton University): And if states were stocks I'd be selling California and buying Nebraska, Iowa, South Dakota, North Dakota and Kansas.

SIEGEL: Now, of course, states aren't stocks and you can't buy shares of, say, the fertile plains of central Nebraska. But you can buy farmland or, as they say in Nebraska, you can buy ground.

(Soundbite of an auctioneer)

Unidentified Man: There I got five. Can I get 25? Anybody? Twenty-five, 25, 25 going, 25.

SIEGEL: These days, with corn selling for over $6 a bushel, farmland in central Nebraska is also selling for whopping prices. Kelly Holthus is president of Cornerstone Bank in York, Nebraska.

Mr. KELLY HOLTHUS (President, Cornerstone Bank): Well, you're here on a good day. We had an auction and this particular piece of land which is very good, one of our best farms, 160 acres, sold for $8,050 an acre. And this was 2,025 acre land, not too many years ago.

SIEGEL: You know, people have pointed out that the run of economic disasters -of course the Great Depression was terrible for agriculture, for farmers; and the 1980s recession was terrible for farmers - where we've just come out of the Great Recession, farmers seem to be have been among the winners here. They seem to have come away unscathed.

Mr. HOLTHUS: What recession?

(Soundbite of laughter)

SIEGEL: Banker Kelly Holthus is being facetious when he goes that far but there is no denying that high grain prices have kept the farmers flush, and there are several reasons for that. First, the ethanol policy. The U.S. government mandates that gasoline contain ethanol and that guarantees huge domestic demand for corn. More than a third, perhaps 40 percent, of our corn goes into the gas tank.

Second, the big emerging economies of Asia are buying more and different kinds of food. Third, extreme weather. Drought in Ukraine, for example, has destroyed crops overseas and that has made U.S. grain that much more valuable. And fourth, some economists like Ernie Goss point to Federal Reserve policies that have weakened the dollar.

Prof. GOSS: And that has tended to push up agricultural commodity prices.

SIEGEL: So the economic stars are perfectly aligned for Nebraska corn growers. But that alone doesn't explain their good fortune. Growing corn in Aurora, Nebraska is the very model of an adaptive, competitive American industry. It is high-tech and highly productive.

(Soundbite of banging)

Mr. BRANDON HUNNICUTT (President, Nebraska Corn Growers): I don't know if you guys have ever seen inside a grain bin, but we have an empty grain bin and it has a nice little echo sound to it.

SIEGEL: Brandon Hunnicutt showed me one of the 10 shiny, corrugated steel grain storage bins that he bought two years ago. He used his earnings to increase his leverage in the market.

Mr. HUNNICUTT: In real terms, this is about half a million bushels of capacity that we can put into that facility at any one time.

SIEGEL: What does that permit you to do as a farmer?

Mr. HUNNICUTT: A couple of things. It allows us to not sell grain until later on in the year.

SIEGEL: You're in control of when corn goes to market.

Mr. HUNNICUTT: And you can determine where you want to go to, you know, because your local elevator may not be the best location to go to 'cause of price. Or you might have a specialty crop you're growing and you need to ship out somewhere else.

SIEGEL: Hunnicutt raises corn, soybeans, and some popcorn - that's a specialty crop, it's a different plant. He is 37. He has five young children. He and his father, brother and cousin farm 3,600 acres. Think genetically-engineered seed, tractors guided by computer, irrigation that taps into the vast Oglala Aquifer that sits under most of Nebraska, and think of Twitter as a farm tool.

Brandon Hunnicutt is the picture of a 21st century corn grower. Shaved head, designer prescription sunglasses, Bluetooth earpiece, he has a master's degree, is politically active and media savvy. He says these are amazing times.

Mr. HUNNICUTT: There's been a change in the seed technology over the years. We've had newer fungicides and different things coming out that helps us protect the crop more. But I think we're learning how to become better farmers and some it is just flat out because of technology we have.

SIEGEL: How does Twitter play in the life of the modern farmer?

Mr. HUNNICUTT: The Twitter aspect has allowed us to make sure that we're telling our story. Part of it is sharing information amongst farmers. And some of it is as simple information as, okay, I've just found these plants dying in my field. I've never seen this before in Nebraska, but it sure looks like X. In this case, sudden death syndrome in soybeans. So you can put that picture out there and somebody can respond and say, yeah, that is what you're seeing. Okay, I've never seen that before.

SIEGEL: So the information is easily available to everybody.

Mr. HUNNICUTT: Yeah, easily available and instantaneous. Gone are the days of, okay, I got to wait till I get home at night to run through my email.

SIEGEL: You're saying email is the old days.

Mr. HUNNICUTT: Email is the old days, you know, yeah.

SIEGEL: In the 1980s, when Nebraska farms were failing and Willie Nelson was first doing Farm Aid concerts, Brandon Hunnicutt was in grade school. In recent years, Nebraska corn yields have gone up by, on average, a bushel and a half per acre per year.

(Soundbite of machinery)

SIEGEL: Corn is transported by truck and dumped at the co-op facility west of Aurora. From there it gets shipped out all over the country and all over the world. Some it goes to an ethanol plant right there, a plant that has slowed production.

There's a new plant that's been in and out of bankruptcy and isn't running yet. The high grain prices that benefit growers hurt the ethanol companies. They also hurt livestock farmers whose feed bills have gone up.

For the older farmers in this part of Nebraska, tales of boom and bust are fresh in their memory. Clint Jensen and Phil Troester are on the local advisory committee to the USDA Farm Services Agency. Clint Jensen is cautious.

Mr. CLINT JENSEN (Advisory Committee Member, Farms Services Agency, USDA): Farming is a cyclical business and the law of supply and demand will only allow it to go down from here. Our ethanol industry and our feeding industry can't sustain themselves with these kind of prices.

SIEGEL: But we're going to keep sticking ethanol in gasoline, and more and more Chinese are moving to the cities and improving their diets. Maybe you're lucky enough to be farming at a historic turning point.

Mr. PHIL TROESTER (Advisory Committee Member, Farms Services Agency, USDA): But we're also at a time more where our yields are going up. I mean, when I started farming, 150 bushels an acre was a good corn crop. Now we're way over the 200s, you know. That's quite an increase. And they're saying this technology will keep continuing. Some day we'll raise 300-bushel corn - and so we can feed the world.

SIEGEL: That's Phil Troester.

Jerry Preisler, who's also on the advisory committee, says today's farmers are fewer in number than they used to be, and they're farming much more land.

Mr. JERRY PREISLER (Advisory Committee Member, Farms Services Agency, USDA): Probably in the early '70s, probably the average farm was three to 400 acres, where today it's about 1,500.

SIEGEL: What's the smallest do you think somebody can really make a go up here with a farm, growing corn?

Mr. PREISLER: I would imagine you're going to have to have upwards of 800 to a thousand acres to make it work.

SIEGEL: So it would have been an unusually large farm back in 1970s.

Mr. PREISLER: Exactly.

SIEGEL: Today, it's what you got to have just to be in business at all.

Mr. PREISLER: Exactly, yeah.

SIEGEL: In these very prosperous times, many Nebraska corn growers are spending, and banker Kelly Holthus says they're not borrowing a lot.

Mr. HOLTHUS: They're using a lot of their own money. These good, successful farmers are the ones we'd like to loan money to, 'cause we know we're going to get it back.

SIEGEL: So you're saying, instead of taking out loans from the bank, they're withdrawing deposits from the bank - deposits against which you could otherwise be making loans.

Mr. HOLTHUS: Right. Right.

(Soundbite of machinery)

SIEGEL: There's a ripple effect from all this. At the local Case IH farm equipment dealership, manager Alan Anderson says the farmers are replacing equipment that's getting old - combines and tractors, like the one he showed off to me.

Mr. ALAN ANDERSON (Manager, Case IH Dealership): This particular tractor has the deluxe cab, seats swivel, they're heated. The tractor has a computer on it that can tell you when to lift your hitch, drop your markers, what gear you want to run in, you can set the engine speed or you can set how hard you want it to pull. It's all computerized.

SIEGEL: That sounds great, Alan. And all this for what kind of money are we talking?

Mr. ANDERSON: Oh, this one's probably 170,000.

SIEGEL: That's with cup holders included.

Some people say this is just another economic bubble and it'll burst in time. I asked farmer Clint Jensen, who talked about how the farm economy is cyclical, if I wasn't coming up against the natural pessimism of farmers. And Mr. Jensen set me straight. Farmers, he said, are optimists.

Mr. JENSEN: How can you not be optimistic by putting a seed in the ground, knowing that the good Lord is going to either provide the rain or you'll have that water underneath the ground, and that's how you make your livelihood? You have to be optimistic, not pessimistic.

SIEGEL: And with corn prices up - according to the World Bank, by more than 70 percent since last June - optimism comes that much more easily.

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