Progress Report

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Partners & Friends,

The Hess Family Farm team made stellar progress last week. We completed about 60% of bean planting and around 50% of corn. The corn ground is all sprayed, and we’re working on bean fields now after receiving a 1/2 inch of rain. The ground was good and warm—soil temps are over 50 degrees. Most of the kinks have been worked out of the system now, so running should hopefully be smoother the remainder of planting season. We are also trying to avoid working after dark, since it is still early and we do not want to burn ourselves out. The Hess Family Farm team also had a few more hands on deck while planting, with my brother-in-law, Kevin, who helped out all week, and friend, Chuck, who came in for a day. Onward and upward!

It has been a wrestling match recently with oil prices and the question of what to do about locking in fuel. The Brazilian safrinha corn crop is looking good. They are planning on adequate moisture for the rest of the season—that’s what is being forecasted, anyway. The export corridor situation in the Black Sea changes daily.

Our family is well! Phyllis and I are waiting for the call to come any moment with news that Lindsay is in labor.😍 Softball practice has begun for Abbott.😁 Ali’s search for a job and final college quarter at UChicago are both coming along well. Miriam has also become our first grandchild to get a driver's license! 👏🏻

Fall Prices:

Corn—5.48

Soybeans—12.99

Stay safe and in touch,

Steve

Biding Time

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Partners & Friends,

Spring is in full swing, and we are getting closer to putting planters in the field. This week, the Hess Family Farm team is finishing some tiling repair and ground preparation over recently tiled lines, applying more NH3 on acres being switched from beans to corn, calving our small beef herd, voting, drawing field boundaries, seeding waterways, attending spring concerts, and completing other miscellaneous tasks. We just received almost an inch of rain overnight, along with some high winds. The planters are hooked up and almost field ready. The last of the seed beans have been delivered and most of the bins are swept. Between the longer days and warmer weather, the urge to begin planting is growing more and more.

Commodity markets have found support for now. Oil prices are up due to the OPEC announcement of reduced production. 8 of every 10 dollars we spend are related to energy/oil. Following yesterday’s election, it seems that progressives may have won the day.

The family is doing well. Our grandchildren are in the home run as summer break draws nearer and spring fever infects schools. Ali is also working hard through her last quarter at UChicago. Lindsay is within 2 weeks of her due date. Our plan is to celebrate the good news of Jesus on Resurrection Day, then begin fieldwork shortly after.

Fall Prices:

Corn—5.39

Soybeans—12.96

Give glory to our Risen Savior!

Steve


Spring Is Here

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Partners & Friends,

We are entering the time of year of great anticipation: planting season is just a few short weeks away! There are last minute financials to be attended to, winter projects being wrapped up, newborn calves on the way, and tiling projects getting finished. The equipment is hooked up and readied for the spring rush to begin. We have received deliveries of seed and products for planting. Over the past few weeks, we have also been able to put two more loads of tile in the ground. Grain delivery continues to be at the forefront of our attention as we try to take advantage of basis opportunities and clean out bins before the hot summer weather. 

The nationwide banking chaos is having a negative effect on the commodity markets. It appears that The Fed will not raise interest rates as expected, which will lead to a longer run of inflation. Energy and fertilizer prices are easing, which will help input prices for next year. The extension of the agreement between Russia and Ukraine will also enable more grain to be exported, which will help relieve worldwide supply issues. There is still, however, much longer-term production capacity lost in Ukraine.

Ali is at UChicago for her last quarter of classes before graduation. Phyllis and I had a wonderful, one-on-one trip with Cora in Kentucky, where we visited the Creation Museum and Ark Encounter. Lindsay is due in less than a month. Goat showing season has resumed again.

Fall Prices:

Corn—5.39

Soybeans—12.92

Enjoy spring!

Steve

Future Proof

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Partners & Friends,

I just finished reading The Future Proof Farm by Steve Groff, and it stimulated many thoughts. The book in itself is a good read about regenerative agriculture. But it also generated thoughts about what we are doing at Hess Family Farm to secure our future with the production and financial/marketing aspects of what we do. In no specific order, here are some of the larger points:

  • Cover cropping for soil health, erosion control, and nutrient availability 

  • Strip-tilling for soil health and labor/equipment savings

  • Applying variable rate fertilizer to deliver nutrients specifically where they are needed

  • Utilizing financial management tools to track and analyze specific costs and income

  • Tiling every acre possible 

  • Placing high value on quality labor—both full- and part-time

  • Cultivating strong lender relationships

  • Locking in long-term low-interest loans

  • Hiring crop consultants to give us the capacity we do not have

  • Securing low-hour equipment with the latest technology 

  • Ensuring each crop is planted to provide the most potential for best yield

  • Having a written marketing plan

These days are filled with equipment and building maintenance, soybean and corn delivery, office tasks, final input purchasing, and attending live and online production and marketing meetings. Green energy is a hot topic on our farm as we analyze offers from wind and solar firms and stay abreast on the daily changes to CO2 pipeline proposals. 

A national energy policy is sorely lacking nationally and globally. Since 70% of everything we do involves energy, this leaves us vulnerable to whatever political winds blow the strongest. What is the long-term play for ethanol? Brazil's soybean harvest is coming on strong and looks to be the best and biggest yet. China's population decline is finally gaining attention…there goes a lot of long-term export demand.🙁 The remaking of global supply chains will change world economics far into the future. Food inflation is here to stay (for a while, anyway), but that does not mean the farmers are raking in more dough—check out this short video (or view the script here) from our friend, John Phipps.

Ali starts her last quarter at UChicago shortly. Goat showing season begins next month in our neck of the woods. Basketball season for our grandson, Walker, is almost over. Lindsay is due April 17th. Phyllis and I are enjoying our annual getaway to Riverview, Florida.

Fall Prices:

Corn—5.76

Soybeans—13.65

All questions and comments are welcome,

Steve 

Business and Birthdays

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Partners & Friends,

Last week, Marcus, Phyllis, and I attended the AgView Executive Business Conference in St Pete, Florida. We find it a good strategy to step outside the business, get some external perspectives, review, and plan personal and business goals. There were several speakers who challenged our future personal and business plans. We met some great people at the conference as well.

For full transparency, here are some of the notes and bullets we brought home: 

  • We need to keep better track of our corn and bean break-evens as the year progresses and see different yield scenarios play out 

  • We need to shock test our balance sheets with different black swan scenarios in order to see how our financials react, and how we then should adjust our business to compensate

  • We should take a 2-hour break from technology every day to reduce stress and help maintain our personal perspectives

  • The most important pieces of equipment on the farm are our bodies—we must do our best to maintain physical and mental health

  • Nobody knows where commodity markets are headed

  • Success is measured in money and capital, while significance is measured by what you give back

  • $8 of every $10 we spend in agriculture is related to energy

  • We cannot flip a switch to convert to green energy, it is going to take much time, technology, and funding

  • Cost of labor is not coming back down

  • Soy diesel is the new green fuel star

  • What is DALL.E.2?

  • Life is short—family comes first. Your legacy are the memories you want to leave

The Hess Family Farm team is busy shipping grain, crunching input numbers, ordering chemicals, working on life goals, and relaxing. After stepping back and gathering all this new information, we now need to be diligent about setting new goals, and then find accountability to ensure we actually implement them.  

Brazil is harvesting beans. It appears there is a large crop and an abundance of acres to harvest. There will also be another 3-4% more acreage next year. Brazil surpassed the US in soybean production about 8 years ago, and now their production and exports are more significant than ours. Interest rates, at these levels, have changed several global economic plays. Current rates are far more historically normal, and we must take interest and energy prices into account throughout all of our planning.

January is birthday season, so there are cards to send and celebrations to participate in. We celebrated Marcus and Phyllis' birthdays on January 25th while still in St. Pete. There is nothing miniscule about the wonder and significance of creation and life!

Fall Prices:

Corn—5.66

Soybeans—13.45

Steve