When local grain farmers look into their crystal balls, they are seeing good times ahead.

The reason for the optimism is there is a growing demand for grains and a smaller or stagnant supply. In the business world, when demand outruns supply, prices rise.

“Good. Real good,” is how Don Kauffman of Spring Valley Farm near Middlebury described the 2010 harvest.

Kauffman was one of thousands of farmers who descended on the annual Fort Wayne Farm Show last week to attend seminars, look at new equipment and meet up with old friends. Kauffman was also there to donate $2,500 to the Fairfield FFA chapter that he had won through a Monsanto Foundation program.

“Last year things went great, real smooth,” he said. “The weather was on our side most of the year.”

With that success under his belt, Kauffman and others are looking toward this year’s planting and harvesting seasons.

“The world is in need of considerable corn and beans,” he said. “We (farmers) are a small majority feeding the world.”

And some of the people American farmers are feeding are the Chinese. The Wall Street Journal reported Friday that China vastly boosted its imports of corn in 2010. The WSJ report said China imported 1.57 million metric tons of corn in 2010, which was an 18-fold increase over 2009. The reason for the increase, according to the WSJ, is that China’s demand for corn is being fueled by an increase in large-scale hog farming.

“Back in 2008 prices rose because of ethanol,” Kauffman said. “This year the prices are rising because of the need for food.”

According to the United States Department of Agriculture, feed corn production is expected to fall in the United States this coming season.

“U.S. feed grain supplies for 2010/11 are projected down, reflecting lower corn production,” the USDA’s report for January states. “U.S. corn production is estimated 93 million bushels lower as a 1.5-bushel-per-acre reduction in the national average yield outweighs a 183,000-acre increase in harvested area.”

So, will Elkhart County farmers plant more corn this year in anticipation of a better market? It’s doubtful, according to Purdue Extension Field Educator Jeff Burbrink.

“Over the years people have learned to balance that (crop plantings) for several reasons,” he said. “It tends to even out your income. You also get some benefit from rotating your crop. You break the insect and disease cycle.”

“If you keep planting corn year after year in a field, the pathogens build up. By rotating your crop to beans or hay you can save yourself some money and increase your yield by rotating.”

Also, market forces come into play. The rising price for corn is no secret, Burbrink said.

“Everybody knows that too,” he said. “You just don’t go out and move over your crop to whatever the highest price is in January. If everyone did that then the price would fall. If you can outguess the market you are doing pretty good.”

How much corn?

Elkhart County farmers are pretty consistent in their planting, Burbrink said. There is generally around 60,000 acres of corn planted each year, 43,000 to 45,000 acres of soybeans, 2,000 acres of wheat, and 20,000 acres of hay planted. Burbrink said there is also a lot of corn planted for silage that is not tracked.

Much of the local grain never makes it to China or another country. Instead, it is used to feed dairy herds, hogs and chickens on local farms, according to Burbrink.

“That is what they call ‘value-added,’” he said. “You take that grain and feed it to an animal and it is converted into protein and that animal can be sold. It makes that grain more valuable.”

In the case of dairy herds and chicken operations, the final products are milk and eggs.

Input rising

Farmers are just part of the food supply chain. Several of them at the farm show expressed concern about the rising cost of supplies, including fertilizer, weed suppressants, fuel and feed.

“Your inputs have gone up,” Kauffman said. “Some are 87 percent higher and climbing.”

One cost area that farmers are always looking to improve is to use less chemicals, which tend to be expensive. He said farmers are always on the lookout for equipment that can deliver chemicals with more precision and economy.

Because of the high costs of chemicals, he said, “We have to be better stewards of those chemicals.”

The planting season is months away, but already local farmer are preparing and planning.

“A farmer is the biggest optimist there is,” Kauffman said with a smile. “It is always going to be a better year next year.”