What are the markets telling us?

[Red Steele]

Are we supposed to be adjusting our numbers to make $3.70 corn and $9.00 soybeans work? It doesn't matter a whole lot what one southern Mn farmer does or doesn't do, but it seems to me that it is going to take a pretty big adjustment industry wide to accomplish this and the support progrrams in place are not going to cushion the hard landings that will have to happen. I saw what happened to the farmers of the 1970's that had ramped up production, with the promise of $3.02 corn for every bushel they could grow, fencerow to fencerow as Earl Butz proclaimed and then had the rug pulled out from under them. Going from $3 to $2 is not as big a hit as what we are experiencing right now.

I knew when I purchased fertilizer and seed that I was paying too much if prices for the grains didn't rally, and it looks like they are not going to make much of  a spring rally. I would guess that we will see some relfection in lower yields as farmers scramble to adjust their costs or go broke and go a little dutch on inputs. Chasing that last ten or twenty bushels does not seem like that great of a deal right now. Hunkering down and surviving seems like a much better plan.

With the uncertainly of planting and production ahead of us, if this is the best the markets are offering, it does not bode well.

[westernia80]

All I have heard from "anyists" on the radio is that farmer must overcome low prices by raising production per acre.  Meaning don't go short on imputs.  But for me why would I use a root growth promoter that costs $15 an acre but might only get $9 back?  Same with some fungicides, seed treatments and traits.  I think that most of us are better at simple economics then we are given credit for.  If something makes prices go up later on those with more costs might look the smart ones.  Right now that is not a bet I'm willing to risk.

[nwobcw]

that would be like automakers producing more cars when sales are down

[timetippingpt]

Seems to me like they are saying that wheat is cheap enough, if you are counting on the wheat PLC for income, might want to consider hedging it in. This can be done by merely lifting the new crop hedges and holding the cash wheat unprotected until you get a normal recovery rally and then resell the 60 cent carry. $7 is still possible, just have to earn it.

Also saying that switching acres to beans is a pretty bad idea, especially with the crop ins program that we all have in place courtesy of the US taxpayers.

[Red Steele]

My plan is to grow less corn than I have historically. My county ARC is going to pay me the same whether I plant corn or beans as it goes by my base acres and not what I actually plant. The new crop corn/bean price is pretty neutral as a ratio on the mix and getting back closer to a corn/bean rotation makes a lot of agronomic sense as it reduces my overall nitrogen inputs and I can coast on residual fertilizer. Lower costs = lower stress = happier, healthier campers.

Growing corn on corn takes more inputs, usually takes a yield hit, takes more field preparation, etc. If the market is going to reward that effort, go for it. Otherwise, coast.

[Hobbyfarmer]

It tells me there are changes coming at a rapid rate.

Bought my seed corn this morning, was kind of amazing, picked the hybrids I wanted and he hit my price point.

$53 / ac seed cost on RR corn.  Conventional...$40 ac

Just found out a farm right here in South Podunk Country was just subleased for less than the first lessor is paying (cause he can't) 

The first dude is getting the afterfeed and making up the difference. 

Just the tip of the oncoming iceberg.

[OKdon]

How big a reduction in fertilizer to sacrifice that last 10 or 20 bushels? I suppose it depends on whether you fertilize to produce great yields this year or whether you see fertilization as building soil structure for the next year and the years following. The way I see it that fertilizer that doesn't produce a great crop this next year is not money wasted because the fertility is still there for future years.

But then I don't swing for the fence every year either. I want there to be nutrients to produce 200 bushels + but I'm not fertilizing for 250 bushels either. I'm not sure that fertility is the limiting factor as far as yields go. Water is a factor and seed population along with soil type and seed variety.

If yield and bushels don't pay the cost of production this year, there is always next year and the year after. Some years we simply have to work for less but should yields and prices surprise us, then I'll have the ingrediants there to benefit from it.

[wrightcattle]

this year anyway ( especially the NW cornbelt ) so it ain't gonna matter.

6 is a tick, 7 is the real deal on cash corn this year.

[elcheapo]

Quit