Energy costs may not be your largest expense on the farm, but it's one that you can jump in on and make a fairly large impact without changing productivity, says Mark Hanna, Extension ag engineer at Iowa State University. He offers ideas for conserving fuel, including reduced tillage passes, shifting up, front-wheel assist and hybrid choice and drying....More
Short-dated new crop options (SDNC), available since mid-2012 from the CME Group, Chicago, Ill., provide a short-term alternative for trading new-crop corn and soybeans as well as hard red winter wheat and soft red winter wheat. CME reports that more than 2.5 million SDNC contracts have been used....More
The reality is setting in that some producers, particularly those in the grain sector, will experience negative margins in 2015, which is something not experienced in many years. How can a producer troubleshoot their business and work with their lender when margins are tight, or even negative?...More
In 2015, crop revenues are likely to be significantly reduced compared to revenue levels in recent years. 2015 crop input costs for seed, fertilizer, and chemicals are likely to be similar to 2014 levels, and land rental rates will likely remain fairly high, which adds more risk to 2015 crop production....More
Everyone has had their fill of football bowl games, and now we are into the college and professional football playoffs, which usually provide some surprises and upsets. This is much like thinking ahead about what to expect in 2015. The following are a few of the thoughts and perspectives that you may want to consider in your planning or conversations with your business partners....More
The five agriculture stories to read this week include farm revenue outlook for 2015, as well as long-term agricultural projections. Read about a farmer who is building soil organic carbon to grow better crops, and a company that's got a robot to do your nitrogen sidedressing. Finally, for some entertainment, take a fresh breath of farm air with the Peterson Farm Bros.
Corn and soybean prices are higher today than they were in early October. However, despite an impressive “dead cat” bounce, prices remain below production costs. Marketing plans are difficult to write when prices are below costs, but write one we must. Here are my pre-harvest marketing plans for 2015....More
The year 2014 has truly been a time of transition for the agricultural industry and rural areas. While challenging, there will be more opportunities to succeed in agriculture in the next decade than the last 30 years, but there will also be more opportunities to fail. A game plan including resiliency and agility will be the themes for 2015 and beyond for those moving to a higher level of management in the industry of agriculture....More
U.S. corn exports rebounded dramatically in 2012/13 from the previous market year, when sales hit levels not seen since 1970. The first six weeks of the current marketing year suggest further improvement....More
The reality has set in that grain prices, cash flow and profit margins will be modest at best. Whether this part of the cycle correction will be one, two, or even five years or more in duration, farmers and their lenders will have to manage through these economic white waters....More
Santa has been very generous over the past few years. Last year I looked under the tree and found $13 soybeans and $4 corn; not quite as big as the gifts in 2012 (or 2011, or 2010), but they fit well and I was grateful. Rumor has it that Santa will not be as generous this year. Here is my corn and soybean marketing wish list for 2015....More
If your working capital burn rate is less than one year, it would be considered high risk. Above 3.5 years is indicative of a strong second line of defense and of course, between one and 3.5 years would be considered acceptable, but not stellar. To say the least, this winter and next year will be a balancing act as farmers juggle quickly converting liquid assets to cash to keep their businesses in operation....More
The combination of lower projected corn prices and soybean prices in 2015, together with nearly steady input costs for seed, fertilizer, and chemicals, will limit estimated potential returns over direct expenses and land costs, at average crop yields. Another major variable in breakeven levels in crop production are loan payments on capital investments such as farm machinery, facilities and land purchases....More
Good foreign demand for U.S. soybeans is helping bean markets stay above $10 per bushel, with the January 2015 contract closing up about 25¢ at $10.36 Friday. March ended the week at $10.42, up 24¢. And anticipation of possible reduction in soybean ending stocks could add further support to bean prices, says Bryce Knorr, senior editor at Farm Futures....More
An analysis of some of the more common custom rates in the 2014 Iowa Custom Rate Survey showed that the listed “average” custom rates for some farming practices may be a bit low, given the higher ownership costs of larger farm machinery, higher fuel expenses that have existed in 2014, and the difficult field conditions that existed in some areas....More
Five agriculture stories to read this week include advice for renegotiating farmland leases (if you haven't done so already), as well as an FAQ on Title I programs in the 2014 Farm Bill. Read a perspective from Bayer CropScience CEO about the benefits of modern agriculture, and how that impacts our food safety. And while the Thanksgiving holiday has passed, it's not too late to be #thankful4ag, and to take a look at what U.S. farmers provide to make those amazing Thanksgiving meals.
Jon Everett didn’t dodge opportunities to get about 70% of his 2014 crops marketed last winter and spring, when corn prices were still pushing $5 per bushel or better and soybean prices were near $11.80 per bushel. And he and his farming partners wasted no time in making sales on about 40% of their expected 2015 corn and soybean production....More
Lessons from the past find that the stress point in business financials is repayment capacity given debt service commitments. Repayment capacity and the management factors that influence it should be front and center in many farmers’ game plans....More
On his central Iowa corn, soybean and seed farm, Tim Couser tests agronomic practices with on-farm strip trials and new concepts. Beyond the weather, he leaves nothing to chance. “That’s what makes farming so much fun,” says Tim Couser, a Nevada, Iowa, farmer. “It’s half science and half art. Being a low cost producer takes a lot of work; the next yield breakthrough will definitely be harder to achieve.”...More
This month in particular, let's all be #thankful4ag. In doing so, go to thankful4ag.com, a cool website set up by Bayer CropScience. There, you can create a virtual holiday meal, learn some neat agriculture facts, and, the best part, help donate meals to those in need....More
The grain industry is taking a body blow punch as prices have moderated over the year. If the lower prices continue into 2015 and beyond, there will be a “punch in the mouth” which will disrupt many producers’ strategic planning in the middle and later parts of the decade. A certain set of producers will still be profitable in the economic moderation. Let’s examine some of their characteristics....More
Five agriculture stories to read this week offer advice for watching your bottom line during this time of lower commodity prices. There are tips for winterizing your sprayer, as well as tips for successful weed control. Also read about the impact of low gas prices on the ethanol market. Finally, for some fun, enjoy the latest Peterson Farm Bros. parody, I'm so Farmer. Those fellas are so clever.
Yield improvements will be the key to Chinese efforts to continue boosting corn production, according to Dr. Fred Gale, USDA Economic Research senior economist, but yield improvements will not be adequate to meet growing corn demand....More
Economic trends from the past five years have had an outsized positive influence on row-crop productivity, says Wells Fargo Ag Economist and Senior VP Michael Swanson. As they fade, “recognize that your economic future is in the hands of the new trends replacing them,” Swanson says.