With higher demand for corn and soybeans, prices are on the rise.

“Right now, corn and soybean are up 25 to 30 percent from what they were last year,” said Lyle Paul, agronomist at the Northern Illinois Agronomy Research Center.

Farmers face several factors that can lead to price increases.

Because the United States is a major exporter, what happens halfway across the world can have a large effect on harvests.

Paul Rasmussen, a farmer and president of the DeKalb County Farm Bureau, said prices depend on the weather in the Northern Hemisphere and harvesting done in the Southern Hemisphere.

High demand for food can lead to several changes, said Mike Hardt, assistant manager at the DeKalb County Farm Bureau.

Farmers are making contracts with buyers to predict how much they will produce and sell. Some have already reported that prediction to the U.S. Department of Agriculture, Paul said.

Nationally, about 86 million acres of crops will be planted this year, according to the USDA. Last year, there were 93 million acres of crops planted.

Economically, farmers should be planting more corn, Rasmussen said.

The basic principles of supply and demand suggest that prices may be going up since the supply is already on the decline.

As corn prices continue to go up, farmers are losing options to market grain.

When farmers make forward contracts with buyers in advance, prices can go up. In the meantime, someone has to make up the margin money, said Paul Taylor, a farmer in DeKalb County.

Taylor said there has already been about $20 million in margin calls that need to go back to the market.

“This year is not a good time [for farmers],” Taylor said. “We’ll need to get the market straightened out.”

The wet weather this spring has already delayed farmers from getting into the field. Farmers still have some time to plant soybeans, but corn, which is typically planted first, may have to be planted later on.

A drought this summer would cause prices to skyrocket and it could kill the market that farmers have been working on for decades, Taylor said.

The ethanol market also affects the price of corn, Paul said. If there is a decrease in the price of gas, there will be a decrease in the price of corn.

Other countries, such as China, Brazil and India, can also affect production costs. Because each country is now using more modern farming techniques, the demand for nitrogen and fertilizers has increased, said Rasmussen.

“[Production costs] have gone up tremendously,” Rasmussen said. “Prices for certain products have gone up 300 percent in the last three years.”

Farmers are seeing an increase in the cost of diesel, nitrogen, fertilizer, crop protection and landlords, Paul said.

Farmers do not set prices for the crops they produce. So a high production cost will not necessarily affect price of corn or soy beans Paul said.

“Farmers are price pickers, not price makers,” he said.

With the market already fragile for farmers, Taylor said it is important to raise enough corn.

“If not, the market could become explosive on the upside,” Taylor said.