SUNBURY -- A growing worldwide demand for American foods and grains have many Valley farmers enjoying the biggest profits they've seen in years.

For about the past year, almost every single important agricultural commodity produced in the four-county area has seen the percentage of price increases hit double digits. Corn prices have doubled in the past year.

Soybeans are up more than 50 percent.

Wheat is trading at three times what it was two years ago.

Even the price of dairy products is bouncing back from significant lows.

And now, speculators at the Chicago Mercantile Exchange are driving prices even higher.

It's all about supply and demand.

Heat and drought in the wheat-producing areas of their countries forced Russia, Ukraine, Kazakhstan and China to buy tons of American corn and soybeans, according to The Wall Street Journal.

Commodity traders believe the demand will remain great in 2011, and the supply of next year's crop, tight.

For that reason, in mid-October, corn futures for December delivery rose 23.25 cents, or 4.2 percent, to close at $5.79 a bushel -- the highest level since August 2008.

Soybean futures for November delivery rose 26 cents, to close at $11.79 a bushel in Chicago, bringing the gain over four sessions to 11 percent, including a 16-month high of $11.89.

Analysts now predict the 8 million acres or so of soybeans taken out of production last year nationwide will be put back in next summer.

That's huge, said Robert Pardoe, who owns a farm east of Montandon, where he grows corn, soybeans and grains.

"The price per bushel of corn and soybeans is approaching a two-year high," he said. "And that's very good news for farmers like me. How long it will last, you never know. There are so many variables from year to year."

Pardoe should know about the variables. He's been farming for more than 35 years.

But he's also firmly planted in technology. Pardoe said he tries to keep up with the prices bid at the Chicago Mercantile Exchange, and he finds it fascinating.

"The traders are now bidding on what we call far-out production," he said. "When you talk about bushel deliveries of corn or soybeans in August 2011, that's considered far out. Anything can happen, excessive rain, drought, insect infestation. It's pure speculation. But it sure is driving the engine."

Pardoe declined to say how many bushels he produces a year, but he did say that although prices are high, because of the drought this year, the amount of corn and soybeans he sold "was down somewhat."

Good news, bad news

"High commodity prices are certainly good news for farmers in the Valley -- particularly those who sell everything they grow," said Mark O'Neill, a spokesman for the Pennsylvania Farm Bureau, Camp Hill. "And, it's also good news for those who have livestock and are able to produce their own feed. But if they can't, if they have to buy all of the feed they use for their herd, costs are high and that is a significant hit to a bottom line.

"This the downside to the price spike. Not everyone is prospering."

As a result of the increased prices, some farmers of beef, pork, poultry and dairy are incurring record-high feed costs, he said.

About 40 percent of the cost of producing pork, for example, comes from feeding livestock.

Gary Truckenmiller, of Dry Run Dairy, Watsontown, is one of the fortunate ones. He is a farmer able to grow his own feed. He has a herd of about 85 cows.

"I'd say that I use about two-thirds of what I grow, the rest I can sell," he said. "And I still manage to make a nice profit."

In western Snyder County, William Hostetler and his sons grow grains, vegetables and fruit.

"We're a small farm, about 50 acres total," he said. "I sell fruit at local markets and those prices don't move much. But I do sell feed and corn to other farmers and I'm doing OK this year. It's a welcome relief from the past few years and we're very grateful."

There are almost 700 cows at Leroy Troester's dairy farm in Mifflinburg, and he said he wasn't making enough money from the sale of their milk to cover the cost of their care.

What he finds most frustrating are the feed companies, veterinarians and cooperative extensions that are "preaching management" to the dairy farmers.

"There are only so many ways you can cut costs," he said. "I don't think they want to face reality."

Feed costs increased about six or eight months ago, then backed off a little. But with commodity prices going through the roof, feed costs are likely to spike again.

Fortunately, the price of milk is up this year.

The news is not all good at Boyd Patrick's western Snyder County dairy farm, where he has a herd of 64 dairy cows.

Patrick said he had to borrow more than $100,000 to get by a few years ago.

"The price of grain and other things went through the roof," he said. "And milk prices were way down. Right now milk prices are up a little bit and that's my saving grace."

Patrick isn't sure how he'll be able to deal with the feed increase, though.

"I'm borrowing more money," Patrick said. "I know I'm not giving up my farm."

One of Patrick's neighbors is Carl Bailey, a young, second-generation dairy farmer who was wise enough to sign a contract with a grain farmer for future deliveries.

Bailey said he "isn't the talkative type, but I am glad I locked in a price with my supplier. Still, I'm starting to see trouble facing my farm. I don't grow my own feed. I wish I did. I'm getting slammed. It would save me serious money if I could grow my own."

Wheat theft

With a tractor-trailer load of wheat fetching as much as $5,000, wheat thefts are occurring around the country -- although not yet in Pennsylvania.

"It's scary," Patrick said. "I heard of this. It's something I'd never in a million years consider doing, no matter how desperate I got.

Just last year wheat was selling at $3 a bushel, but now it's selling at $10 a bushel and is harder to come by.

"This is one of the things you now have to worry about when you're a farmer, and you grow your own grains," Patrick shrugged.

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