New Year

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Partners,

The new year is moving so quickly! We are diligently finishing up last year’s records, getting W-2s and 1099s out, looking back at what we learned last year, and making plans about what to adjust for 2019. Our office seems to be a beehive of activity with some late nights involved. Schools are all back in session but there have been several late starts and snow/ice days this past week. The official snowfall this past weekend was around 14" and more is forecasted for tomorrow. Marcus attended the Top Producer meeting in Chicago this week and brought home some new management ideas. Steve was at the Precision Planting meeting in Tremont Thursday for catching up on the latest updates in planter technology.

The government shutdown has affected us a bit. The local FSA office is closed but will reopen for three days next week; but there is very little traffic through there this time of year anyway. The soybean market is very volatile according to who-says-what about trade negotiations with China. It seems that agriculture supports a border wall but also wants a rewrite of immigration policy to allow foreign workers access to our labor market legally. Now the leadership of the house wants to take a vacation! All of this political brinkmanship is quite the show to watch. 

All children and grandchildren back in school -  at home, elementary school, or college . All the snow days are enjoyed (except for the makeup work). Lots of sledding and snowman building. Phyllis and i hope to make it south for a bit in February. 

Current prices:

Corn 3.56

Soybeans 8.54

Fall Prices:

Corn 3.68

Soybeans 9.00

Be careful in the winter weather!

Steve

Summit

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Partners, 

Meeting season has begun, and Phyllis and I attended the DTN Summit this past week in Chicago. Here is a brief summary:

Global Outlook
Look for inflation and interest to gradually rise
Under Obama regulations were implemented at the rate of 1-2 per day--rate now is 0
Oil prices relatively flat

Landslide or Landrise?
Land values predicted to soften 2-4% in 2018
Farmers are struggling to pay for land (rent or principal payments) or capital investments (equipment)
Today's rent implies 4.23/bushel corn price

Your Farm, Their Food (General Mills, Kellogg's)
Food transparency is vital today--where did this food come from?
Safety and quality of products is a priority company decision
People are interested in progress toward the goal of food sustainability--not necessarily perfection

Do You Need a CFO?
How are growing operations keeping a grasp on financials during periods of expansion?
Outside eyes on business operations can be very objective and beneficial

Over The Wall: Think Like an Athlete by Andy Papathanassiou
Racers must be safe and conservative to stay in the race but also aggressive to win
We must look for new ways of thinking and solving problems
1. Iteration
2. Coaching
3. Overcoming distraction
4. Do the impossible

How Will Technology Producers Compete
There will be increased cooperation between ag tech suppliers to make farm data more accessible and useable
Data will become easier to collect and more useable
Sustainability is doing more with less, something farmers do all the time

Market Outlook
Huge stocks of corn, beans, wheat
Strong carry in market now--near 70% in corn
In pattern of lower highs and lower lows

Social Media Tips
Riverview Farms, Wild Farms--Education strategy; why are we doing what we're doing
Silent Schade Planting Co
Bryant Agricultural Enterprises, Ohio--community outreach, history and future
Tom Farms, Indiana--clear up misunderstandings, engage followers, not everything needs to be positive--post things happening right now

Weather
La Nina with ocean cooling now predicts some weather patterns in Midwest
Winter colder than normal with above average snowfall
Spring time above normal temps and rainfall
SA weather--rainfall returning to normal--predicted normal weather ahead

Fine Tune your Financials, Rabo and Farm Credit 
Recovery still 3 years out--production costs still average above farm gate prices
Planting discipline--reduce seeds per acre to lower costs
Cost of debt is increasing
Debt coverage ratios are expected to continue negatively
Cost of land has adjusted--needs to adjust lower over next two years
Diversify, Peer benchmarking, Data Management, Analysis, Cost levers

 

On the farm we are working on many projects--tiling, tree clearing, grain delivery, equipment cleanup and major year-end office tasks. The weather has been great--clear and dry--and the forecast is for no precipitation for the next two weeks (looks like no white Christmas).  We are in the process of breeding about 80 heifers this month which puts them calving next fall. 

Farmers are watching our president's handling of our various trade agreements with some major trading partners. We understand it is a global economy today and we cannot wall ourselves off from the rest of the world and have a very vigorous economy. The tax bill in Congress is not even a step toward simplification, as very few loopholes are being addressed. Our children and grandchildren will be dealing with these huge deficits and not eager to make sacrifices to live on a balanced budget.

The family is doing well and looking forward to Christmas break with some down time from school and studies. Looks like we will be spending a quiet day on the 25th and will get everyone together after the holiday week.

Current prices:

Corn 3.29

Soybeans 9.49

Keep in touch and any questions welcome!

Steve

Beetles & Celebration

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Partners,

Fireworks with Friends

We just finished celebrating the birthday of our country last week. What a time to pause and reflect and give thanks to the many who have sacrificed in order for us to enjoy the freedoms we now enjoy. It was good to spend time with family and friends and count the blessings.

Japanese Beetles

Delivering Grain

On the farm we are busy battling weeds and bugs. The dry weather has limited the effectiveness of some of the herbicides used and now we are under pressure from a rather large infestation of Japanese Beetles. There are some trees and shrubs they think are absolutely delicious. They have been in the area for about two weeks and are now moving into the crop fields. We are concerned, now that the corn is tasseling and shooting silks, that they will dine on the sweet tender ear silks. They are also stripping leaves on the outside of the soybean fields and without significant rain we are wondering what the effect on yields will be. We are also delivering grain, sweeping out bins, and still working on drainage projects that can be addressed without harming the growing crop. So for the month of June we recorded .7 inch of rain at Marcus's place, and 1.47 where Phyllis & I live. Forecast for next two weeks looks dry.

State of Illinois budget is making progress, although it is disappointing to see the governor was steamrolled and none of his proposals were included in the package. Democrats say not to worry, we will take them up later--right! American beef is now being sold in China after a 13 year hiatus. 

Ali on left

Softball Moms

Family is doing well. Alison had her last club softball weekend--sad to leave that stage of life. The crew (we managers included) are trying to get some time off in the summer for some fun relaxation. Next week is the 4-H show so time for bucket calves to make their debut.

Fall prices:

Corn 3.65

Soybeans 9.71

Keep in touch and stay cool! Comment & Like below.

Steve

Management Time

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Partners,

Into the new year! The last few weeks, work-wise, have not been too intense due to holidays and personal time. We have most of our crop inputs ordered for the 2017 crop year: seed, fertilizer, and herbicide. For the most part seed prices and herbicide are steady from last year and fertilizer is down 20-25%. We tried some different herbicide products in 2016 to reduce costs and are looking at more generic products this year. We're also considering ordering some products direct from distributors to cut out middlemen. We have evaluated our equipment situation and are planning very little tweaking to our current lineup. We are replacing a few worn out items—auger and backhoe—but will inspect and repair all other items and put a few more dollars in the repair and maintenance budget. We have come up with a list of some surplus items, mostly livestock stuff, that we are marketing on several sites. We are also planning on raising our bean acreage; due to the increasing prices in the bean market, soy is getting more competitive with corn, especially if we can keep increasing yields. Our labor force is remaining stable although we feel for Marcus being the only employee under 60 on the full-time payroll. 

As for the ag economy, it is interesting that the president elect is waiting to choose a candidate for Secretary of Agriculture till the end of his nomination process. With a new farm bill on the list of legislation in the next two years, the background of the pick will probably play huge into the favored crop legislation process. But with the tighter budget constraints expected, the hope for larger ag subsidies are bleak. We keep in mind that over 60% of the agriculture budget is for the SNAP food assistance program.

On the home front we celebrated a great holiday season. Our whole family was together the day after Christmas. I had a new right knee put in on December 13—recovery going as expected. Marcus and Shanna celebrated a 10 year anniversary with a trip to a warmer climate for a week. The Lord has truly blessed us! 

Hope everyone is having a great 2017—we hope this year is your best ever! 

Steve   

Giving Thanks

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Partners,

We are taking some time this week to pause and give thanks for all the Lord has blessed us with. As we reflect on the past year we truly feel like a blessed people with our family, our community, our business, this nation, and this wonderful creation we are so privileged to live in. We hope you are able to spend time with loved ones and special friends and strengthen and enrich relationships with the people close to you this season. We plan to have all our children and grandchildren in one place on Thanksgiving Day - something we truly cherish - maybe because as we get closer to the finish line we can appreciate the things that will outlive us.

Even now in the midst of tough economic times and the everyday challenges we deal with (like leaking water lines and leaking fuel pumps and adverse weather conditions), I feel so blessed that the second farmers in this country (Native Americans were the first) chose to leave a place of safety and strike out for a place where they could be free to worship the God of their choosing and engage in pursuits that were of their choosing. May we have the courage today to stand up for what we believe and take action to preserve our God-given rights.

Steve