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.
Nearly 6,800 ag professionals, from farmers to scientists, were surveyed about their beliefs regarding climate change, as well as whether it's caused by human activity or nature itself, or a combination of both. Survey results showed that most scientists believed climate change was happening, while about two-thirds of farmers believed it was....More
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
Forecasting higher-than-normal rainfall several months in advance is still folly. But from a climatological standpoint, odds are that wet springs and summers are more likely in the years ahead than they have been in the not-so-distant past....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.
Lower corn and soybean prices are causing some concern among farm operators, as they negotiate land rental rates for the 2015 crop year. Some 2015 land rental rates may be set at levels that do not offer much opportunity for profit potential from crop production in 2015, or could even result in a significant net loss to the farm operator....More
The great commodity super cycle has burned out. It lasted for a decade, two and one-half times longer than any previous super cycle boom time over the past century. The easy money has been made in the grain industry; however, top-flight managers can still earn a profit when they focus on production and operations, marketing, risk management, and, of course, carefully monitoring finances....More
Farmers undertake various tasks to meet the challenge of flowing their crop efficiently from field to market. Though on a very different scale, railroads are confronted with a similar logistical challenge. In 2013, U.S. Class 1 railroads hauled 124.5 million tons of grain....More
Too often young people attend a university for the degree rather than the education, which can be a waste of money and time. As a professor, I am not disputing the value of an education; however, some of the most motivated lifelong learners are outside a degree program and they often make very successful entrepreneurs....More
Many farmers with final 2014 corn and soybean yields below actual production history (APH) crop yields who had a revenue protection (RP) crop insurance policy in place in 2014, will likely be able to collect a crop insurance indemnity payment on the crop losses incurred this year....More
Five agriculture stories to read this week offer considerations for potassium application, as well as yield losses due to harvest delays. Read prospects for cash rent and owned farmland returns, and get insight into using data, not averages, to help your farm operation. For a fun read, check out an old, but great, article about genetically modified farmers from The Onion.
Even with projected record U.S. production of both corn and soybeans in 2014, the market prices of both crops have risen during the month of October. While the recent improvement in grain prices is generally good news to crop producers, it could be costly to farm operators that will likely qualify for 2014 crop insurance indemnity payments....More
Recently, a farmer asked a panel I was a member of, “How often should farmers and lenders communicate during the year, particularly during the planning season?” The panel recommended having a meeting during planning season followed by a quarterly or semi-annual assessment, along with a year-end evaluation, which is imperative to determine financial success....More
It is time to work with the USDA and other key stakeholders on how we can align COOL to WTO standards, while keeping the integrity of the law and its purpose in place. It only makes economic sense to favor our own domestic products that are of a higher standard and support American farmers and ranchers....More
Included in "5 Ag stories to read" this week is advice for soybean cyst nematode sampling, and well as tips for applying anhydrous ammonia this fall. Access regional climate data from the USDA, and learn about grain storage and marketing plans from Midwest farmers. For a good laugh, check out a story about harvest-resistant corn. Yes, you read that right…HARVEST resistance.
How often have you wondered whether a new practice or piece of equipment will pay? Kenton, Ohio, farmer Brian Watkins built a computer farming simulation model to calculate the cost of such options. “It tells me how much time a piece of equipment will take to operate and repair, how much fuel will cost and how it will affect other things we do,” he says....More
In many of my speeches I emphasize that better is better before bigger is better; that is, get efficient before you embark on growth. What is a good financial measure of efficiency for farm businesses? One of my favorites is the operating expense to revenue ratio....More
One of the key financial ratios that agricultural lenders use to determine repayment ability is the term debt and lease coverage ratio. It measures the amount of debt obligations (debt service which includes principal and interest), compared to the debt servicing capacity (net income plus interest and depreciation)....More
A few simple precautions and a little bit of common sense can go a long way toward helping prevent farm-related accidents and injuries, especially at harvest time, two Purdue University agricultural educators say....More
Brian Haugen is preparing his farm for lean times. Leveraging his management experience, discipline, standard operating procedures (SOPs), a diversified revenue base, shared human resources for productivity and collaboration with more than 35 landlords, his corn and soybean operation will do its best to weather the storm over the next few years....More
After stellar financial performance from a net farm income standpoint from 2009 to 2012, median net incomes are moving back to levels observed in the period between 2003 and 2008. In that era, median net farm income for the average group was typically in the $40,000 to $60,000 range....More