Just Kidding

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Partners and Friends,

It has been some exciting and rewarding times around here. The goat project is exploding in size. Last summer's vigorous AI breeding schedule has resulted in some great birthing experiences. We had 2 sets in October and 2 sets the week of Thanksgiving. All are healthy and doing terrific! 2 more sets are due the week of Christmas. What fun it is to watch the exuberance of youth and wonder of creation. The pens are getting full and decisions now need to be made who gets to stay around for show season.

We were occupied last week installing 80 acres of tile before the weather turned wet. The team and I hope to do another 160 acres this winter, weather permitting. If our land base stayed stable, we probably wouldn’t run out of tiling projects for the next 7 years. We have a list of priority fields and hope to eliminate replanting wet spots soon. The price of material has softened a bit, but is still 50% higher than a few years ago. The tile supply situation is a perfect example of supply logistics recalibrating. We have also completed all NH3 applications. The plan for 2023 is for more corn acres than beans, due to economics and some strategic field reorganization. Time spent in the office has been at a premium over the last several weeks while figuring and analyzing past years’ outcomes and changing some practices for the future—more on that soon. 

The world is still full of black swans. The Ukraine situation remains in a state of turmoil and probably will for a long time. Note this chart; the world energy situation has some resetting to undergo that will not be comfortable for some. We in the United States are truly blessed with natural resources. 

The family is staying quite busy during this holiday season. The Trinity "White Christmas" program is this weekend. The 2022 Hess Family Farm Team Christmas party is also now in the books! Pop question: what year was our farm founded? We are truly celebrating the reason for the season and reflecting on our abundant blessings.

Here is an update on the Ukraine situation from MCAgronomics:

“The situation in Ukraine is continuing in much the same pattern. The Russians are failing on the battlefield in most locations but doing great damage to the electrical grid, natural gas distribution, and drinking water systems. Since the Russians have not been able to gain or hold ground on the battlefield, they are focusing on freezing/starving the civilian population. The will of the Ukrainians appears strong and the ongoing discoveries of murder, torture and other war crimes strengthens their conviction. The Russian population appears to be becoming more and more displeased with Putin’s war making but who knows where that will lead.

The “mud season” is ending and the ground is freezing which will allow a return to battlefield mobility and will favor the Ukraine tactic of bypassing established Russian defensive positions to attack supply lines in the rear.”

2023 Fall Prices:

Corn—5.68

Soybeans—13.74

Soak up this wonderful season!

Steve

What Others Say

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Partners & Friends,

We have spent several days attending meeting focused on marketing and management for ag producers. We are always looking for ways to improve or enhance our operation to become more profitable and efficient.

Here are a few bullets from what we heard.

Marketing

--World commodity supplies are ample and this is a global market we are competing in

--Weaker US dollar should give us a competitive edge

--Watch for and take advantage of basis opportunities

--China Phase 1-not bullish but does calm the water

--China Phase 1 good for meat sales

--Macro markets (stocks) are off to the races

--Pork production in US is up 25% in last 6 years

Weather

--Summer temps are ALWAYS higher than normal after warmer than normal winter

--Corn belt weather has changed to wetter because of the way we raise corn

--Warm February temps usually mean cool wet spring and hot summer

--3 day forecast is usually 97% accurate

--10 day forecast usually 50% accurate

--Climate (change) is the average of 30 year weather and is always changing

Management

--Orlando is the safest zip code in America

--Management is doing. Leadership is being.

--Interest rate does not matter to government spending

--By 2040 60,000 farms will produce 75% of US ag output

--Younger generation is resentful of supporting large retiring group

--We need to produce what the consumer wants!!!!

—There will be more change in agriculture during the next 10 years than during the past 70

--Success in growing a business will be about alignment between production and consumption

--Millennials care more about what has been done on the farm for generations than who has owned it

--Oil is becoming a global commodity-less volatile

--We can be low cost or high quality producers

We are sharing current thinking with our partners so you can have an idea of how we are positioning ourselves to move forward. One thing for sure in our industry is that things are constantly changing.  The way our farm has survived for 150 years is to adapt, hopefully early, to new ideas and technology and implement them. Farming today looks so different than when Phillip Doll came to Bushnell IL and chose the farm we live on today. But all generations have been progressive and forward thinking, which is why this business still stands today. As we age  it is harder to move toward different ways of doing things but necessary for survival. 

Some things do remain constant throughout the ages. Honesty, hard work, ethics, family values, sustainability and the culture we create are still the foundation for what we do. To care for and leave this environment a better place than what we inherited is the goal.

Fall Prices:

Corn 3.69

Soybeans 8.86

Keep in touch. Comments appreciated!

Steve

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