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Veteran Advisor

Experience the Blue Sky In Agriculture

Yes, there is Blue Sky in Agriculture. I helped write this piece just for you. Hopefully, you can find some optimism in this to keep you going this winter.

 

Full story:  Blue Sky In Agriculture

 

What say you?

 

Mike

 

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9 Replies
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Veteran Advisor

Re: Experience the Blue Sky In Agriculture

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Honored Advisor

Re: Experience the Blue Sky In Agriculture

Nice article Mike.... that swks guy should have been more helpful...

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Honored Advisor

Re: Experience the Blue Sky In Agriculture

I`m a glass half full guy, but "good deals on S680 combines"?  Smiley Very Happy   No, there`s a 8820 for sale along highway 18 east of Britt that`s more in my budget. 

 

 There is good news out there like ethanol, I hear we`ve been crushing more than the RFS for the last 3 years, this RFS we`re ocassionally freaked out about is becoming more irrelevant every day because demand is greater.  China is importing "industrial alcohol" because they have found that product is the most cost effective way to deal with their smog problem.

 

I don`t see land rents going down as a positive barometer, when farmers have it good, they pay up for rent.  If rent goes down that says obviously budgets are so tight that they must bite the bullet and risk losing a farm by asking for lower rents, not to mention their banker tightening the screws on them.

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Honored Advisor

Re: Experience the Blue Sky In Agriculture

That was the swks problem......... I appreciate Mike's direction but now it is very hard to find things to be positive about...... even a cut in fertilizer from the 50 cent/lb N to the 40 cent range is not a positive when the corn price is in the 20 cent N cash flow range.  

 

Two things right now are telling to ag.   and they might be positives in the long run.   

1.  there is no rush to even find a sec. of ag....... meaning there is no agriculture "agenda" in DC.  

2.  The acreage drop in wheat is the first strong indicator that producers are finally responding to the markets.  Corn is positioned to follow.  When the price is in a level that says we do not value it enough to encourage production producers need to respond by cutting production.   Especially now when we are using 14 billion bushels of corn and ethanol can make money at higher corn proces(and oil prices)

A 15% drop in acres puts us in a much tighter position...at 12.5 B.    We have got to manage our business better.  If we don't someone else will.

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Honored Advisor

Re: Experience the Blue Sky In Agriculture

Sorry but I've had plenty of blue skies the last few years.

 

Can't afford much more of it.

 

Price of seed had and still has blue sky priced in.

 

Machinery repairs have a hemisphere' s worth of blue sky mixed in the bill.

 

Fert and herb prices have been priced with a mind set of they want a piece of my sky.

 

I see clouds on the horizon, might be time for a come down to the ground meeting.

 

Half ton pickups, $50,000 and UP. How much blue sky do we need in the grain markets to just keep even with that?

 

Bunge west added a few cents to their basis the last few days but are trying to sucker  punch producers with "free" dp, and the local elevator subtracted a few from their corn bid.

 

Hope some of you are right and many are low or out of soybeans to sell. I would like to add some blue sky to the few I have.

 

Btw, isn't something going to be planted on most all the acres?  Either an oilseed or feed grain?

 

Beautiful blue sky here, cool, no wind, clouds at the horizon...

 

 

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Veteran Advisor

Re: Experience the Blue Sky In Agriculture

The sec ag discussion might involve Trump getting some strong feedback or pushback on anti-RFS types, plus it could be a number of other political things.  I dont' get the feeling that agriculture is ignored or neglecated, maybe it's important enough to take a second and longer look.

 

Are wheat farmers finally figuring out it is a world market?  I'm not so sure that corn is bound to follow wheat, as there are not so many other places planting corn to the extent that they can move the market.  Wheat is sometimes food sometimes feed.  Corn is sometimes feed and sometimes fuel.  Plentiful wheat will no doubt dragt down corn, but industrial and energy uses will hold it up.

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Senior Advisor

Re: Experience the Blue Sky In Agriculture

Gee Wizz Hobby - After reading the article I was getting the feel goods ! THEN some ole stick in the mud from Ioway post's up doom and gloom and reality - well damit -  Guess I'll have to head to frig and grab a Miller now !  Smiley Happy

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Honored Advisor

Re: Experience the Blue Sky In Agriculture

Couple of issues with wheat acres......... They are mostly dry land acres in areas that are not going to get high production corn.... 40 bushel milo or 30 bu corn/ which can go in fairly cheap...... While corn acres irrigated (200 bushel) are being replaced by beans(60-70 bu/a)  In this side of the fringe I do not see corn production holding up as those 200 bu acres continue to decline.  We get about $150/acre in water pumping costs when we have the water to pump..... COP corn is still well above $4.50...   

 

Your right if it wasn't planted to wheat if probably will be to something else that feeds the ethanol industry.  but whatever it is it will only bring corn yields/acre down.  even though acres went up a little.

 

It still takes 8 acres of dryland corn to make up for 1 acre of irrigated corn that went to beans.  If rain is good.  It is the fringe.

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Veteran Advisor

Re: Experience the Blue Sky In Agriculture

Thanks for the discussion, folks, and your good feedback. I appreciate it. 

 

 

Mike

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