More New Life

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Partners & Friends,

Our daughter Lindsay birthed her fourth child on January 17th--Marguerite Esther. Margo will join her three brothers in a very busy household. We were at the hospital in the waiting room at delivery time. With every new birth I am so amazed at the wonder and perfection of these precious babies. And I stand in awe of a God who designed and fit this creation together so well!

There has been some great moonlight to work by these last few weeks. Before the storm came last week we were putting tile in the ground. We are working on wet areas that had to be replanted this past spring. We also got a call from one seed company to ship one of the varieties of seed beans. So we were loading trucks in the early morning moonlight. Elsewhere we are finishing up year-end activities in the office, getting financial information together for lenders and tax preparers, ordering seed and chemicals for 2020, and attending meetings to help us better manage the business. This is our chance during the year to catch up, clean out, and get reorganized and ready to work with Mother Nature for the next year.

Great news of the trade agreement signing last week. The market reaction was another, “Buy the rumor; sell the fact.” Some expect the Chinese to announce they are in the market so the price will be more expensive. Those people are not going to show their hand to make their food more expensive! Word of a new virus in China is kind of scary, too. With the globalization of the world it will be very hard to contain things like this. The president spoke at the AFBF annual meeting for the third year in a row. Farmer support seems to be at an all time high. The cold weather doesn't seem like it will last too long to really hamper grain movement this month. We are preparing for a summer shutdown of the Illinois river for some overdue maintenance of seven locks and dams. That means getting the grain we’ve sold to the river terminals delivered sooner rather than later. 

Family is well. This is the season when it seems schoolwork will never end. A bit of winter time off planned and some fun short trips to break up the monotony. 

Fall 2020 prices:

Corn 3.72

Soybeans 9.13

Steve

Snowed Out

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Partners,

Got in a few days of field work last week. By Saturday night all bean ground was sprayed and most NH3 applied. Soil conditions aren’t bad, and a year like this is when our tiling efforts are paying off. We worked till the rain/snow started Sunday morning, and above are some pics of what it looked like at noon. Looks like we might have one day this week to spray. 

Tariffs are still in place and stress is showing in farm country. The pork market is very strong since China has lost 19% of their hog herd to Asian Swine Flu and is actively buying up world pork supplies to field their population. Markets are nervous about the weather but most longer-term forecasts have some windows of dryer, warmer weather in them.

Alison played her first Rugby tournament last weekend! We are eagerly anticipating the celebration this weekend of our risen Savior.

Have a great weekend and keep in touch!

Steve 

Equipment

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Partners,

We are keeping busy with lots of winter work, diligently trying to keep our equipment costs low to stay competitive. Hence we operate a lineup of modern used equipment. Our sprayer has been through the shop and now the combine is in process. All of our major pieces of equipment are professionally inspected each year and a list of worn or questionable parts is developed. We then use our labor force to upgrade the projects on the list we are capable of completing. The bigger, more involved tasks are performed at the dealership. When each tractor, combine, sprayer, planter, and head is put into storage it is ready to go to the field when planting/spraying/harvest season comes.

The lure of new paint is one we try to avoid. Just like the depreciation hit new vehicles take the first two years, we try to be wise about the true cost of our equipment lineup over time. We believe our equipment capacity is adequate for the number of acres we farm and labor available, but there is not much margin for breakdowns or time lost to equipment malfunctions. We did some major upgrading 6 years ago when we moved up to 24-row planting equipment. Of all our major pieces of equipment, the planter is the only thing we purchased new.

Commodity prices have been trading a very narrow range for several weeks now. Corn and beans are poised to break out either higher or lower soon. I will discuss weather soon in another post. The tariffs/trade war situation with China is ongoing but showing some positive movement toward resolution. The first big step will be getting the Chinese to admit they have been bending the rules in the first place. We hope Congress approves the new USMCA agreement; seems to be lots of positive things in it for Ag. The new Farm Bill is being implemented and apparently there is a lot more to it than just a renewal of the 2012 act—a lot of pages with new details. The weather pattern is causing some disruptions in the Midwest for river traffic and grain deliveries. We are thankful we had very little grain to deliver in January-February.

Family doing well. Lots of missed school days with all the weather issues. (That is one thing the homeschooled kids miss out on is snow days and make-up days.) We do still have 14 head of heifers to care for so there has been some struggle with frozen waterers this past month.

Fall prices

Corn--3.73

Soybeans--8.96

Keep in touch,

Steve

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

Notes from the 2018 DTN Summit

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Ag Secretary Sonny Perdue

  • Trusting but verifying China trade reform

  • China rising storm

  • China growth rate lowest in over a decade

  • Huge food deficits

  • Rural to city population move continuing along with higher food standards

  • Asian swine flu causing major disruption of meat consumption & prices

Grain Marketing

  • # of farms in US has declined 23% in 30 years

  • # of acres farmed has declined 3%

  • Bunge-1818

  • Louis Dreyfus-1851

  • Cargill-1865

  • Average managed futures fund- 4.5 years lifespan

Jim Carroll, Futurist

  • 7 out of 10 children will work in jobs not existing today

  • Multiple trends merge, speed accelerates

  • Massive transformation, crazy ideas, bold thinking

  • Every industry becomes a software industry

  • Moore's law defines innovation velocity

  • Science exponentiates

  • Strategies scrambled

  • Reinvention dominates

  • Time collapses with advanced methodologies

  • Global trends globalize

  • Science, health and tech get married

  • Packaging changes, packaging connects

  • Gamers game, virtualization emerges

  • FarmVille

  • Generations change

  • Think big, start small, scale fast

Blockchain

  • Bitcoin or some digital currency will become common

  • Connected computers reaching agreement over shared data

  • Public Key Encryption

  • Any supplier of leafy greens to Walmart must use blockchain

  • Product traceability in 2.2 seconds

  • Market transparency

  • Security Efficiency

Improving Your Family's Business Together

  • Ownership vs Management

  • The change from business to legacy

  • Healthy communication

  • Articulated expectations

  • Agreement on goals

  • Accept & respect

  • Professional development & emotional intelligence

  • Understanding business performance

2019 Weather-Rolling Sevens, Bryce Anderson

  • Weather looking like 7th growing season with no big problems

  • There is enough corn acreage planted that we are affecting summer weather patterns

  • Slowest harvest since 2009

  • 70% chance of weak El Niño into summer of 2019

  • Colder than normal winter - winter lasting into March

  • Cold & reduced snow

  • Global warming continues - not so much in Midwest US

  • More weather volatility coming-heavier spring rains, drier warmer summers

Market Outlook, Todd Hultman

  • In 2015 extreme poverty fell to 10% of world population (>$1.90/day)

  • World demand for soybeans up 260% in 30 years

  • Cash corn price range estimate 2.40-3.80

  • Cash wheat price range estimate 3.80-5.50

  • Cash soybean price range estimate 6.50-9.50