New Year

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Partners & Friends,

We are making our way into 2024 after a wonderful holiday season celebrating the birth of our Savior and enjoying time with family and friends. Along with that is a lot of year-end office time and bookkeeping frenzy. We have finalized our corn and soybean seed orders for the next crop season after studying our own field research and consulting with our crop consultants. Our fertilizer needs are mostly booked and applied. The only missing link is our spring side dress NH3 application. We have pre-paid for chemicals and fungicide. When we make our plans, we are preparing for a robust crop with all the inputs needed for top yields. It is encouraging that input costs are mostly lower, except for seed. Commodity prices are certainly lower than year ago. There’ll be some event along the way that will provide marketing opportunities. 

The Hess Family Farm team is putting more tile in the ground whenever the weather allows. Plans are for another 200 acres this year, although the weather forecast does not look good after this week. We have emptied all the corn bins. This is the first time all bins are empty this early, but we took advantage of some early delivery offers that have turned out well. We are now in the midst of year-end bookkeeping tasks, turning out 1099s and W-2s, and preparing for tax filings. There are a few meetings to attend to help with continuing education and business strategy updates.

The current world events are always black swans for our planning. The Middle East conflict is putting energy prices on a roller coaster almost daily. We have booked almost half of our needs for 2024. The situation with the war in Ukraine is jerking commodity prices around daily. Weather in South America is of extreme importance in the midst of their critical growing season. Interest rates are another area we pay constant attention to. Operating interest is almost 2x what rates were 1 year ago.

Our family is doing well. This season of gatherings has shown us just how thankful we are for our friends and family. The support and prayers our family received over the past year of great highs and lows means so much—thank you! We are looking forward to a great New Year with much time for relationships. May you all take time for the ones in your lives.

Fall Prices:

Corn—4.72

Soybeans—11.93

Steve

Christmas Tree Season

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Partners & Friends,

Things are busy and going well here on the farm as we celebrate the birth of Jesus.

We have finished fall tillage. The fall fertilizer, both anhydrous and dry, is on the fields. We have hauled over 400,000 bushels of corn to take advantage of basis opportunities. We have also celebrated the success of Toppling Goliath (aka Navigator), at least for now. The barns and manure piles are cleaned up. Many tile holes have been dug up and repaired. Equipment has been cleaned and stored. Tiling projects have begun. We hauled over 200 loads of municipal sludge. Goats have been shown. And it snowed. 😐

Crude oil prices are softer as of now, even with the ongoing wars in the Middle East and Ukraine. The one year extension of the Farm Bill has been passed. South America crops are doing adequately overall. Corn and beans have gone into their usual seasonal doldrums. The used equipment market seems to be softer on most types of farm equipment. The Iowa caucuses are about 2 months away. Farmers are standing up for property rights. At the Illinois Farm Bureau annual meeting in Chicago, resolutions were passed by the delegates opposing Eminent Domain for all renewable energy projects, including CO2 pipelines.🙂 That happened thanks to the effort of a many people doing what they can, or as I like to say: throwing stones at the giant! 👏🏻

Our family is doing well, with school, sports, work, music activities, and goat care filling up schedules. Phyllis and I attended the Illinois Farm Bureau (IFB) meeting in Chicago last weekend, and it was wonderful to see friends and family there involved in grassroots decisions. It was a very gratifying delegate session after a year of meetings, calls, signs, and postcards. 

Fall 2024 Prices:

Corn—4.89

Soybeans—12.41

Remember to celebrate the True Meaning of this Christmas season!

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


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

What We Do Right

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Partners & Friends,

This is the time of year where we reflect on what choices we made are paying off. Not everything we do gives us the returns we expect; we will share some of that later. But first, here are some of the main takeaways from 2022 that helped deliver the successful year it turned out to be:

  • Early Planting—we strive to take planters to the field as early as April 4th, as field conditions are fit (soil conditions almost always trump weather forecast)

  • Multiple Nitrogen Applications—with the high cost and low availability of our main fertilizer (nitrogen), efficiency and timeliness of application are huge cost savers and allow us to be more environmentally friendly

  • Crop Consultant—we cannot do everything, and seeking help in areas we are weakest in or lack time for is often necessary

  • Lender Relationship—it is vital to have a strong relationship with our lender to be nimble and take advantage of opportunities presented

  • Flex Rents—the sharing of risk with an open upside to benefit from price strength and good yields is beneficial for landowners and tenants

  • Equipment Capacity—we must be able to get crop planted, tended to, and harvested in weather windows, hence the upgrading of our planters, sprayer, combine, and trucks

  • Technology—we are constantly upgrading and adopting new technology to deal with one of our greatest challenges, labor

  • Work Hard, Play Hard—time away with family is refreshing, rejuvenating, and provides better perspective on who we are and what we do

The Hess Family Farm team is busy selecting and purchasing inputs (seed, chemicals, fertilizer, and equipment) for this next crop year. Higher interest rates are adding a new dimension to this and other marketing decisions. Energy is still one of the biggest uncontrollable factors we deal with. The world economy is slowing, which will affect demand for our commodities. I recently heard that chip manufacturing is now in a surplus! It is funny and ironic how we overcompensate to find new balance.🤔 The crop in South America is looking to be a big one. The fluctuating dollar is just another item for us to monitor in regard to marketing decisions.

Our family is doing well. Grandchild #13 is due in April! We all had an opportunity to gather for a Christmas reunion this past week in Monmouth, IL. A visit to sing carols to Oma and Opa was made and enjoyed. We survived the extreme cold and have all waterers operational again. The multitude of animals, even new babies, made it through the cold quite well also.

 Fall Prices:

Corn—5.86

Soybean—13.92

Keep in touch,

Steve