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Honored Advisor
Posts: 2,922
Registered: ‎04-29-2011

Re: how does this work

[ Edited ]

Over the years, farmer's marketing plans have been interrupted time and time again by mother nature or by a USDA report.  The frequency of these interruptions are increasing.  When the marketing year highs happen in February, and May signals the end of crop worries by the USDA, marketing plans go out the window.  

Mother nature is always a wild card.  The USDA reports are never wrong, as the numbers can and will be changed every month. Sometimes even changing numbers from last year's crops to fit whatever they need.

USDA reports have and never will help the farmers.   If their production numbers are higher, the market races lower immediately.  If their numbers are lower, it simply means that their previous predicted numbers have been much too high and farmers have lost money in the months leading up to the printing of that lower number.

Plentiful and inexpensive food is the goal that will never change.

 

We will always have those on this site that belittle any marketing decision that is made and will also always have those that defend the USDA numbers...even though they can never explain them.  I say to them. "Just try to walk a mile in almost any farmer's shoes and let's see what happens."

Honored Advisor
Posts: 18,031
Registered: ‎05-13-2010
0

Re: how does this work

Hindsight is usually 20/30, so coulda, shoulda but didn`t becomes clearer later in the growing season.  Yes, those that planted in the dust April 25th with 250 and 70 bushel crops coming, they have fewer excuses.  But the fat lady hasn`t sung yet, one morning in September we may yet wake up to the news "trade war ended!" and beans rally $3 and corn $1.

 

Veteran Advisor
Posts: 4,844
Registered: ‎05-13-2010
0

Re: how does this work

RAY  -  HOW  MANY  bushels  of  YOUR  RAISED  crop  did  you  pre-market  ?     Just   say'n   Remember  2006  -  some  in  these  parts  DO  ? 

Veteran Contributor
Posts: 140
Registered: ‎07-04-2011
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Re: how does this work

Ray,
The plan when Dec futures were 4.25 was to start making new crop sales and that plan was put into action. Weather here was not looking favorable and 15% of expected (30% of insurance guarantees) was sold. The plan was to continue to sell additional increments on rallies.
Was it a realistic plan? Not in hindsight but I am tired of squeeking by every year and not being rewarded for the work and risks involved in agriculture. Maybe that means I am too high on my production and land costs or expect to be able to make a reasonable living from my work and investment. I know that I need to assess my situation and either be willing to lower my expectations or move on to another line of work.
It seems like every rally gets clubbed in the head before it gets to the point of reaching a level that is attractive to make new crop sales.
Based on news reports the other grain producing regions of thd world are in trouble. Is the only way we can get better prices for our crops to be a part of overall commodity inflation ? As a result of wall street chasing the hot market and ending in a tax payer bailout for the banks and big market players when things go sideways?
Senior Contributor
Posts: 468
Registered: ‎08-02-2012

Re: how does this work

When dec. corn was priced 4.25$ my local coop basis was -45. So after delivering 3.75$, now you know the reason nobody was jumping on it. Still below breaking even.
Veteran Advisor
Posts: 918
Registered: ‎05-13-2010
0

Re: how does this work

what is the bid for the same time slot today??

Honored Advisor
Posts: 2,922
Registered: ‎04-29-2011
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Re: how does this work

"We will always have those on this site that belittle any marketing decision that is made..."

 

Thanks for proving my point.  Smiley Wink

Frequent Contributor
Posts: 54
Registered: ‎06-04-2016
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Re: how does this work

I generally sell most of my corn a year ahead. I usually sell last yeas' beans in the spring for summer delivery. For my 2017 corn I averaged $3.74/bushel on a little above APH yields.  For me that is a good year for corn.  I have already sold over 50% of this years' corn, and even about 15% of the 2019 crop when I could lock in profitable prices. We are in a commodity business, not a value business (unless you raise a specialty crop). There's very little we can do about prices. I see a lot of complaints that $4 corn is below production costs.  Well, you better do something about your production costs!  I separately track land, equipment, inputs, and living expenses per acre.  I do not have a lot of acres, so I focus on soil quality and I get by with old equipment to keep those costs low. I aim to make $50K from my row crop operations, which means my profit target is $140/acre from my owned ground and $70/acre from my rented ground.   If I can do that in South Dakota with our fickle weather, one should be able to do that in most places.  (I am still paying on my "new" JD9500 and my grain truck and one tractor, but I've been farming for almost 20 years so my shop and bins are paid for).

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Advisor
Posts: 13,047
Registered: ‎02-06-2014
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Re: how does this work

Thanks Obama!