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

Riders on the Storm

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Partners,

We finished at 4:00 this past Friday afternoon, November 3rd, and got everything tucked away in time for the rain that evening. If we call our combine (a John Deere S670) the Storm, you will understand the title for this blog post. We have been amazed this fall by the capacity of our operation, even with the limited investment we have in equipment. Our investment per acre, compared to other farms our size, is on the lower end of the scale (read "used and well-maintained"). We did experience three belts breaking which cost us about two hours each time. We also had to replace the power steering pump, which was a whole day of downtime; but we could sleep well that night because we didn't have to tend the dryer all night to catch up with the combine. In good running we can average over 3000 bushels per hour. When I started farming 40 years ago, a day of picking 1500 bushels of ear corn was considered a successful day. Phyllis's grandpa told of harvesting 100 bushels by hand and then scooping it into the corn crib with a shovel, which was its own major success!

Crops came out well with some downed corn from a windstorm in July, ground squirrel "holes," raccoon "holes," and deer spots by the treelines. We will dry every bushel of corn, but planting longer-season varieties is paying off with bigger yields (good news for landowners with flex rents based on bushels produced). This year's beans are probably the best crop we have ever raised. Harvest was completed safely and timely with a great team of full- and part-time staff.

The ag economy is paying close attention to the proposed changes in the tax code being proposed in Congress. There is lots of uncertainty as to what final product will be. Dupont announced they are selling their cellulistic ethanol plant in Iowa; apparently that was another example of government tax credits and grants trying to make something sustainable that is not. Property tax assessments are out and it looks like the county is looking for sources of revenue from within, since the state is reducing their commitment to local taxing bodies.

The family is doing well. Looking forward to gathering at Thanksgiving and remembering all the blessings God has bestowed on us this past year. We will be hosting some of Ali's friends from Wayland over her Thanksgiving break. This is always an enjoyable experience, getting to learn about other cultures and meet some very bright, polite high school students.

Current Local Terminal Prices:

Corn 3.13

Soybeans 9.24

See our harvest 2017 riders in the pictures above! Comments, questions, and "Likes" always welcomed below.

Steve

Biology Technology

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Partners,

We finally got a break last weekend with the first significant rainfall in over six weeks. Fields were very dry and the soil was hard before this welcomed relief. We needed the time to rest and repair. Harvest progress stands at 35% corn and 65% beans. Yields have been pleasantly surprising; corn and beans will be among the top three harvests for our farm. We will be harvesting some of our less productive and replanted fields last, so we're not sure where they will come in.

Plant technology has been in the news on a couple of fronts lately. 

Syngenta (a global Swiss agribusiness that produces agrochemicals and seeds) announced a $1.3 billion settlement for putting a new corn trait technology in fields in 2013 that was not yet approved by China. China rejected several shipments of corn that fall claiming they were tainted. My thoughts are that in reality China bought some very high priced corn in the price run-up of that period, and by canceling these contracts they could replace it with cheaper corn after seeing the market reaction to the news. 

Monsanto has also been in the news this growing season with their Extend soybean technology release. These soybeans are resistant to Dicambia herbicide which gives us another mode of action for weed control in this crop. We personally planted Extend beans in 2016 for seed to sell to a major seed company, and were very impressed with their performance. Also with the increased weed pressure we have been facing, having access to another mode of chemical action will give us another option in the herbicide toolbox to battle some of the Roundup resistant weeds like Tall Waterhemp and Marestail. There have been many lawsuits filed after complaints of drift during this 2017 growing season and some states are suggesting very restrictive dates of use for next season. We will see where the dust settles on Dicamba beans for 2018.

My guess is that both of these issues will make some attorneys very wealthy, with farmers getting leftovers of settlement dollars and options for cutting edge technology.

The family is doing well. Alison's volleyball team won their senior night game, Phyllis's brother Phil was back for a class reunion, and we got to witness and celebrate a beautiful family wedding in Columbus, Ohio.

Fall prices:

Corn 3.13

Soybeans 9.27

Keep in touch and stay safe!

Steve

Haze & Hurricanes

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Partners,

What an interesting month! On Labor Day Phyllis and I noticed how funny colored the sky was, especially in the afternoon. Turns out it was smoke from fires out west. Then seeing Harvey and Irma move thru the South was an experience of a lifetime--so much power and fury! While avoiding natural disasters, we are busy finishing up summer projects: mowing, building repairs, equipment storage and readiness, grain hauling, storage readiness, and cattle upkeep. We just started corn harvest yesterday and are experiencing the usual startup kinks. Better now than in 2 weeks! Corn is doing well yield-wise (over 200 BPA) but is still high in moisture (27%). Should be a good harvest if weather cooperates.

Ag outlook seems steady for now. Land prices seem to have stabilized in Illinois and the good harvest should help farmer moods, but prices are really tanking due to the yields. USDA has been predicting good crops nationwide (there are some pockets of drought and excess water) and as it turns out they were accurate with their system of collecting data. But I can think of no other country that publicizes its crop size in the way we do.

Our family is doing well. We have a wedding coming up in October (our nephew, Suanne's son Joel). Schooling for all the kids of the right ages with lots of learning and homework. Lindsay and Keith settling into Milwaukee area. We are trying to keep life simple through harvest!

Fall prices:

Corn 3.16

SB 9.43

 

Steve

Summer Swoon

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Partners,

Summer is rushing by. Since the last post we have received quite adequate rainfall here. The month of July turned out to be a real blessing when the corn was tasseling. The beans responded to all the moisture with lots of growth. We are now expecting close to a trendline yield. The beans still need to make progress filling pods. The corn crop is now starting to dent. The cooler temps have slowed development (that's okay) so harvest will not start as early as we might like. We ended up spraying every acre of corn and beans with fungicide and insecticide. 

We have been keeping busy trying to get all the extra projects done we seem to put off during the rest of the year. Barn maintenance is high on the list. We had a wall blow out in one of the storms in July. To repair it we have to make our own shiplap. We also re-roofed a large section of the barn at Marcus's house, repaired and screwed down the rest of the tin and are now getting ready to paint. We have been mowing the CRP ground that was seeded this year to keep weeds in control till the new seeding gets established. We are also repairing many tile issues that are accessible in the summer with a growing crop. In between we have taken some time off for some family fun. We will be getting harvest equipment out and inspected for the upcoming task at hand.

Ag economy is plugging along. The predicted crop size has set a firm tone to the market. In our travels east and west we saw many crops suffering from too much and too little water. Overall we feel like our situation is one of the better ones. Agriculture is still waiting for all the secondary positions to be filled at USDA--can't understand why the process is so slow. Illinois has passed a budget but now is squabbling over all the details. Economics seem to be good enough that the used equipment market is firm and up-trending.

The family is doing well. Alison is preparing to return for her senior year at Wayland. Shanna is back from a trip to Columbia and Ecuador concerning online WIU classes there.  Many of the grandkids are back to school in the next week or two. During the past 6 weeks we have visited 13 colleges trying to pick a path for Ali post high school.  Phyllis and I celebrate 40 years August 21st. Summer livestock shows are coming to end--State Fair just finished up.

Can you answer the college pic question?

Fall prices:

Corn 3.39

Soybeans 9.17

Keep in touch! Like and comment below.

Steve