This winter, South Dakota received 168% of its average snowpack. For farmers in the region, the moisture was welcome after years of below-average snowfall and drought conditions.

For Keith Alverson, a corn and soybean farmer from Chester, South Dakota, the extra moisture brings optimism for stronger yields in the fall after a lackluster 2022 harvest.

“Marketplace” host Kai Ryssdal recently spoke with Alverson about last winter in the Corn Belt and how inflation is impacting expectations for the upcoming season. The following is an edited transcript of their conversation.

Kai Ryssdal: It has been, well, I don’t know exactly how long, but it’s been a while. How are things in the corn business in South Dakota?

Keith Alverson: Things have been going pretty well. Prices have stayed strong. Out here in South Dakota, we had a lot of snow, which was kind of a hassle, but we needed the moisture. And so we’ve got a nice spring day going on and rain in the forecast, so we’re planting away.

Ryssdal: Are you out in the field already planting?

Alverson: I am. I’m sitting, idling in the tractor on the end rows as we speak.

Ryssdal: Sorry to bug you on the job. So, what kind of yield are you looking at this year, more or less than last year? And how’s that going to affect what you take home at the end of the season?

Alverson: Last year, we had a slightly below average crop, and so we’re hoping for average or a little bit above average yield. So that puts us right around about 200 bushels an acre of corn. And so if we achieve that with the corn prices where they’re at, that has some really nice profit potential for us. And so we’re pretty optimistic going into the year.

Ryssdal: I was doing an interview, maybe a year ago or a number of months ago anyway, and this person I was talking to said, “You know, farmers are price takers, they’re not price makers.” You are kind of at the mercy of whatever the market’s telling you it’s going to give you for your corn, right?

Alverson: We sure are. I mean, the supply-demand picture, and I think even in the last couple of weeks, we’ve seen about 10% reduction in the corn price for the crop that we’re about to plant. And so we’ve got potential to lock some of that in using the Chicago Board of Trade. And so we try and manage those margins the best we can, but there’s always some unknowns.

Ryssdal: Do you, the guy sitting idling in the tractor at the end of the cornrows, do you actively work and track the Chicago Board of Trade and those prices? Or are you just out there trying to get the crop out of the ground?

Alverson: You’ll find a wide degree of variation among farmers. Some guys track it, some guys don’t. I myself track that. And I do the trading electronically myself.

Ryssdal: Do you really?

Alverson: Yeah. I’ve been doing that for probably about four or five years that way.

Ryssdal: And does that cut out the middleman and sort of increase your margins? Or what’s the deal?

Alverson: Yeah, it gives me a little bit more flexibility in some of the timing, and so it’s gotten to be something where I’m comfortable enough with the system that I manage it myself.

Ryssdal: Yeah, that’s totally fascinating. All right, so let’s talk about a couple other sort of big-picture things. I want to talk inputs now. The fertilizer and all the stuff you have to have ready and at hand to get the crop out of the ground. I mean, inflation has got to be hitting you too.

Alverson: Yeah, it sure is. A lot of the fertilizers like to track with the grain prices. And so if values are up there, then fertilizer prices are high. And it’s come down over the last several months, you know, a couple months since last harvest, but obviously we’d like to get it as cost-effective as we can.

Ryssdal: What else is on your mind as you get the crop in the ground, and you’re going to just watch it grow for the next three, four or five months? What else is keeping you up?

Alverson: Yeah, you know, the weather is always a big thing for us farmers, and so we keep an eye on that. We’ve come out of a couple years of drought, but the inflation that we’ve seen in some of the machinery and infrastructure things that we look out for on the farm and just some of the maintenance and building infrastructure things that that we look to do around the farm has been a big issue. It’s just a big backlog.

Ryssdal: Are tractor and combine prices up too?

Alverson: Oh yeah. I don’t know if they’re double what they were here a couple years ago. I mean, so it’s raised significantly. So we’re kind of putting off some of the investments or updates that we were looking to do on machinery since what we have is in good working order.