- Agriculture.com Community
- Announcements & Forum Help
- Farm Business
- Young & Beginning Farmers
- Cattle Talk
- Crop Talk
- Hog Talk
- Ask the Agronomy Insider
- Machinery Talk
- Machinery Marketplace
- Shops, buildings and bins
- Ask the SF Engineman!
- Computers & more
- Precision Agriculture
- People & Rural Life
- Ag Forum
- Women In Ag
- Agriculture.com Blogs
- Your Farm in the Future
- Women in Ag: Lisa Foust Prater
- Women in Ag: Brenda Frketich
- Women in Ag: Anne Miller
- Women in Ag: Jennifer Dewey
- Women in Ag: Talkin' Turkey with Lara Durben
- Women in Ag: Heather Lifsey Barnes
01-25-2014 08:50 AM
Iowa State is projecting the above prices for corn after soybeans, corn after corn and soybeans after corn. The land cost assumption is $287, which may be a state rental average but will be high in a few areas and way low in many.
Are you ready to make money at those figures? What kind of marketing plan will you set up if you don't have one already? I bet a lot of people buy crop insurance and don't sell a thing until fall. Is that you and will it work? Is there any risk in it?
Paraphrasing what T. Boone Picket said in another post on this site, sometimes you just have to do the best you can.
Is this a year when you deliberately try to lose as little as possible rather than try to make as much as possible? (In other words, is the risk of a striking out while trying for a home run too dangerous to take a chance on so you deliberatly sell at a known loss ot prevent catastrohic drop?)
01-25-2014 11:30 AM
I think those levels or a little cheaper are survivable depending on how much "after tax commitments" that you have, such as how crazy you got with section 179 on your taxes and how much non-deductable $14,000/acre land that you`re going to be making payments for the next 20 years. In other words the sins we`ve committed with $7 corn will have to now be paid for with $4 corn and after tax dollars.
But is this a surprise? It was nice while it lasted and many of us tried to talk it up and make it last longer, but in our heart of hearts we knew that the laws of supply and demand were still alive and well....cattlemen take note.
Actually, high priced rental agreements aren`t the worst thing for some, because there`s a "expiration date" and the bleeding will clot at some point. Where as a 20 year payment land purchase could well bleed some out.
01-25-2014 12:07 PM
I tihnk you are right. Did you see in the U/Ill paper cited in Markting Talk that rents come down, but only about 20% or so? In other words, we'll get some rent relief but maybe not as much as we'd like or think we should get.
01-25-2014 12:17 PM
Rent relief/renegotiated amount should only come at the end of the previously agreed upon date.
After that the landowner can't get something that someone isn't willing or able to give.
Too early to see the whole picture at this time. Also too early to get your panties all wadded up.
01-25-2014 12:23 PM
01-25-2014 12:48 PM
OK I have a problem, I admit it.
Bought my first farm in 1972.
I have a problem with renters that in good times expand past their grasp then with the slightest downturn cry like a stuck pig under a gate. Ok why get under the gate in the first place?
You were expecting/guaranteed a bumper yield and price when you planted it? You're in next year country out there and you thought this year was "next year"?
Mother Nature is still firmly in control of our destiny as farmers.
Who can honestly say with a straight face they thought $7 corn and $15 beans and $8ish wheat was the new normal?
Through out history farming was a not get rich quick deal. The last 6 years have been outlander years. We now not only have mother nature to deal with, we now have govt and their class envoy-wealth redistribution crap to deal with too.
Better keep your day job...
The new numbers for income guarantees through crop insurance are not going to cut the mustard for many of the high fliers with pmts to the bank, on land, to one to three machinery finance co's + a living to be made that just got harder with the new money grab by the govt through mandontory "health insurance".
Oh yea propane for those that survive on that as a heat source for themselves and their livestock just wrote a new check out of their budget.
Welcome to my world before 2005.
Hand me a beer and pass the popcorn...this should be an interesting show that has just begun.
01-25-2014 01:08 PM
Here`s the thing, it`s only a 33% chance that corn will be $4 in the fall. If we fast forward to June and the crop went it good and +92 mil acres planted, there`s a 33% chance that corn will be $2 in the fall. If the summer turns off dry as talcum powder on a cracker, then there`s a 33% chance that corn will be $6 in the fall.
The 1% chance remaining? That`s if Yellowstone blows it`s top and corn goes to $50. I`m preparing that corn will be closer to $2 than $4 though
01-25-2014 01:08 PM - edited 01-25-2014 01:09 PM
Here's what I am thinking for breakevens next year in my area:
corn:2.82-3.33/bu.. assuming normal yields. cash price today for 2014 is 4.50 (I get to play). can easily hurt myself if drying gets stupid, or basis gets stupid, or I have to build a massive bin to store it for 6 months to pickup a bunch of carry, or yields suck.
soy: 5.80-7/bu.. assuming normal yields. cash price today is 12.20. some soy on soy.. cant do that forever now can I?
hrwheat: 4/bu.. assuming 75bpa base. more like 85 is likely, though 100 totally not out of question. if I dont harvest a single bushel, I will just breakeven.. so far, ive marketed about 75% w the lowest price being about 7/bu.. wheat doesnt fail in this area. Its money time!
30-35% corn that overruns my dryer will get me into trouble if I am overcommitted. it just doesnt dry this far north if it dont mature fast.
I have put all my money into tile/ machinery/ land and have gotten to a point where I dont need to keep putting a lot more into this venture. pretty lucky, ill say. just have to keep living like a peasent.