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Senior Contributor

ProFarmer Marketing Advice-Update

So everyone doesn't feel so bad about the 70 cent drop in corn prices, for cash-only marketing guys, ProFarmer still is holding on to 25% of there old-crop corn. Yes, that is hard to believe since they tend to sell early. Something new is that they have priced 10% of there new-crop corn, this is true for both new-crop beans and corn, and for both cash-only and hedgers included. This 10% new-crop both corn and beans priced at this time period has me worried since I have 0% of 2013 both corn and beans currently priced. New crop corn is currently under $5 in my part of Northern Iowa for all the local elevators, feed mills, and the big hog guys. The ethanol plants are at a little over $5, but by only 5 to 8 cents. Guess we all better run our farm operation's cash flow numbers for $5 new crop corn to be ready just in case. $5 corn is around $2.75 a bushel lower price than the $7.75 per bushel overall average I have for old crop corn. Yes, a big and painful drop, the only thing I have going for me is that my COP (Cost of Production) for 2013 corn, including my $160/acre Custom Farming Fee is only $2.70 a bushel assuming a normal/trendline yield. As usual, the guys with the lowest production costs per bushel will weather $5 corn ok, however the guys paying $500/acre cash-rent for that good 80+CSR High-Quality Iowa farmland will have a much harder time. In fact, there total costs per bushel including the $500/acre cash-rent payment could be $5.03 per corn bushel. They could be farming for FREE on there 2013 corn acres. A very, very, painful jump back to reality from the excellent per acre profits they had in 2012, assuming they didn't price to much of there 2012 corn crop in early Spring of 2012 when prices were much, much, below the high of $8.10+ we had for the overall high cash price we had in Northern Iowa back in Sept/2012 I believe.

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19 Replies
Senior Advisor

Re: ProFarmer Marketing Advice-Update

On PF, for cash marketing only, what is their average 2012 crop cash price for the 75% they have sold?

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Veteran Contributor

Re: ProFarmer Marketing Advice-Update

I tried to warn this site over a month ago that S.A. had a 25% larger soy crop and possibly even bigger than that corn crop coming with their wall to wall corn being planted after soybeans. The waiting ships would not bring enough business to the U.S. when the crop was that big.

All through history farmers have short memories when prices are very good and get too greedy. What land prices have done in my neighbourhood and what crop prices can be this fall (we had so much warning for big acres in 13') will be worse than the 80's for sure. Advisory services always, always come up short. I learned that lesson in the 80's to!

Here is a pic of corn going in the ground after soybeans in Brazil.

 

Brazil soy harvest and corn planting.jpg

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Veteran Contributor

Re: ProFarmer Marketing Advice-Update

Oh and to coin a phrase from Cal Whewell from FC Stone in Ohio. "There is no cure for high prices like high prices"  The market's job is to bring more production to market. The world has responded. Oh yeah, remember India exported corn to China for the first time this last few weeks?

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Veteran Advisor

Re: ProFarmer Marketing Advice-Update

viper, great picture.  Do you have one of how the BTO's farm in Brazil?   Really, though, seems kinda of stupid to push 31 combines that close together...what happens when one blows a belt and stops dead in it tracks?

With double cropping each year, how much P&K are they putting down a year?

 

 

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Veteran Contributor

Re: ProFarmer Marketing Advice-Update

Hey jec22....I will work on getting that pic for you. If you can see by the pic those machines are green in colour, so no break downs LOL. I have no idea how much P&K goes down but I do know that the corn acreage exploded in 12' & 13' enough to screw prices for everyone in N.A.

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Veteran Contributor

Re: ProFarmer Marketing Advice-Update

The yellow combines to the left are together so if one of them breaks it only holds up the one side Smiley Very Happy

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Veteran Advisor

Re: ProFarmer Marketing Advice-Update

viper, was this an area that had poor bean yields, I mean, where are the grain carts and trucks?

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Veteran Contributor

Re: ProFarmer Marketing Advice-Update

Good point jec22. I will see if I can get an answer. I suppose it is possible they are at the end they are heading to? I think they have to unload at the end for sure.

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Honored Advisor

Re: ProFarmer Marketing Advice-Update

Three places in the field where the lead green one stopped and the green one on the leftt side  of the pict had a total hickup

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