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Senior Contributor

the new normal?

was reading an article from gil gullickson about how low prices are the new normal with sub$3.00 corn and $8.00 beans like it use to be. well it also use to be that urea was $160 a ton and chem were only $10 an acre too! combines and tractors were only half what they are today and diesel was $1.00 and a new pickup was $30,000 not 55-60,000!  how about him taking 30-50% less in salary just because "market forces" dictate that!

8 Replies
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Honored Advisor

Re: the new normal?

Well, farming is so much fun these days that too many are willing to play in the dirt for free.  They probably justify it by "well maybe my yields will be better than i expect...maybe my selling price will be better too...maybe I`ll win the lottery.  It always worked out for dad and grandpa, they paid too much for land and rent, but it always worked out"...and for many it has over the years, just buy and take the plunge and it works out

 

*past performance doesn`t guarantee future results.

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Senior Advisor

Re: the new normal?

Farming is a commodity business.  

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Veteran Advisor

Re: the new normal?

several years i remember going to some farm meetings/ marketing meetings......we were entering a new paradigm.........how prices would not go lower

than $5 for corn, etc...etc...........had charts and graphs.....how there will be so many more people to feed.......how the economy was better in

china and pakistan..india...how they were going to eat more.......how due to increased input costs, prices would also rise..........it was never going to

go lower, just higher......

 

now this was done by several national known market people............

 

what happened ?

 

today....the chemical and seed business doesn't know how to act or what to do.......neither does the ag equipment companies not even the grain elevators.

 

today there is no link between the farmers and the business they give money to.....the chem and seed......more and more rare that you do your seed business with

a fellow farmer.....either a "seed salesman" from an input supplier...other the like......they are no longer linked to the farm...same with chemical....the small

operations are gone....

ag equipment......listen to what the company says, and company is not run by aggies, but business majors......and they have not a clue......look at JD.

and the chemical companies......most are becomming foregin owned.........

and the grain business.......talk about a bunch of pirates.....the small elevators are gone....just supper coops or big grain companies......and these groups are

also displaced from the farm/agriculture.

 

will it work.......well it you push it to total corp agriculture, yes...........but i don't think that will be good for me or the country.

 

i am hearing more and more saying......that is the way it is, you have to take what they give and buy what they have to sell......

 

i to tell them, but there are options, but the ones saying this are the ones on the the coop boards, farm bureau, and the "big shots".

 

when the bus driver doesn't know where they are going, i'm afraid we are all going to be lost.

 

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Senior Contributor

Re: the new normal?

very well put!   

the same goes for the grain analyst/advisors on tv and radio. all they do is play on fears that the market could go lower but we can offer you protection with options!  sad when growing a great crop isnt enough!

the past decade of great prices lasted too long in my opinion. if they only had been for 2 or 3 seasons enough to heal from the past decades perhaps all the rest of our inputs wouldnt have increased as much either? but they have and once there its hard to go back.  like you mentioned grain companies that have expanded capacities have to pay for them but at our expense with lager basis,cutting worforce or merging.

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Honored Advisor

Re: the new normal?

There is NO normal.

 

Other maybe a five year average, but beyond that the only normal is change.

 

I started out life in sw Nebraska, I remember the drilling g of our first irrigation well in 1956.

 

The tractors of the day around our area were 8n Ford's, M Internationals, WD Allis' s, and a few of the single lettered JD' s.

 

Horses were down to only saddle horses for cattle work. The "horse barn" still had the west wall lined with all 

the work horse harnesses from before my time. There had been changes.

 

Within five years after that tractors like the 4010, and 806 started to change the landscape. Then center pivot irrigation showed up.

More change.

By the seventies many more herbicides besides 24D showed up, o yea tractors got bigger too, more change.

 

Markets started to be a global thing and price swings started to happen more often, more change.

 

My problem must be my memory is too long, I remember too many changes. Like now every frontal weather system all winter long now has a name, most should just be called "fizzle". But what the hay, it's for our own good, right? Who would want boring no change, no name weather?

 

Very little complaining about the changes in ag from 2004 through 2013 from those on the front lines durnng.large upswings. They are great for creating a new sense of "normal" . 9 years almost a double 5 year average. 

 

We are only about halfway through the five year "normal" change. Hope it isn't a double dipper too.

 

We are in the new normal, it is just a continuation of the old normal that has been happening since John Deere made the first steel  plow, and Cyrus McCormick made the fist mechanical reaper.

 

 

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Honored Advisor

Re: the new normal?

Yes, we are in a constant hamster wheel of change.  I remember thumbing through a commodity trading book about 10 yrs ago that had outdated advice like "farmers farrow sows in the spring and fall so the glut of pork comes in the spring and fall wink wink there`s your hot tip for trading hogs and pst ....it gets cold in the winter so demand for heating fuel is higher then keep these hot tips under your hat

 

But RR crops were a game changer, for a few years everybody became a master farmer with clean fields and the bottleneck to bigness of cultivating was eliminated.  Then the Ez-Steer where everyone "plants straight" and reduce fatigue allowing more acres per man to be covered.

 

All these changes made farming funner and upped the ante to buy in the game.  Less slots available to be in the parade, but plenty of room to sit on the sidewalk and applaude.

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Honored Advisor

Re: the new normal?

The only thing that is normal is the fact that things change.

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Frequent Contributor

Re: the new normal?

I think my marketing strategy has to "change". I need to learn how to become a PANIC MARKETER.

 

If you don't sell the first day of the crash, sell the second day. If you don't sell the the second day

 

sell the third day. Chances are it probably going to loose a third of it's value by the time it's done.

 

I have made it this far in farming by not panicing about things but I guess I need to CHANGE.