Monday, March 23, 2015

Don't put all your eggs in one basket?

    Diversification in business is normally a good thing. If one portion is underperforming another should provide returns to the bottom line.
    With todays prices for agricultural production it shows losses for Corn, Soybeans, Pork, Beef, and Dairy.  Fortunately previous years profits are  helping farmers get through this tough time, but who wants to lose all their equity that has come from hard work.  We will go to the fields soon and plant the crops with the hope that prices recover but are also trying to prepare for the worse.
   It seems like carrying any basket of eggs (or farm products) will be a challenge for the farmer this year.  I am still optimistic long term and am glad for the problems we have here.  Our problem now is too much production but a much worse problem is little or no production.  Do what you can to support the less fortunate.

                                                                                      Serving together,  Dean

Saturday, February 28, 2015

What shows up before the first Robin?

Farm machinery auctions.
     Yes before we will see the first robin in the yard, farmers will make their annual migration to farm auctions.  In fact this has been going on so long that it has now been perfected into a annual consignment auction.  Locally the Leland Lions Club will have one on March 21st.  For the town it means farmers are flocking into town from hours away for the one day event.  For the Lions Club it means several days of hard work and collecting a small amount of each sale to give back to the community to feather that nest.  For the farmer it gives the opportunity to sell some things he is not using and buy some things he thinks would help him for the next few years.
    At these events there is really everything and anything that is found on a farm.  They also have mud.  Yes just when the winter is leaving and the frozen ground is turning to mud, equipment is being hauled out of hibernation given a few quick repairs and put in a line of all the other farm equipment.  Each waking from their own machine sheds for this event.  All these farmers then put on their best mud boots, carhartt overalls, and gloves jump into the truck making sure he has some wagon pins and a tool box just in case.  He of course will arrive hours before the auctioneer begins to look at each piece of equipment and devise his best plan for acquisitions.  Some have so perfected this that they will buy something at one of these auctions if they think the price is low and sell it at the next auction within weeks that has a different flock of farmers descending on  a similar town.  Most often there will about 5 auctioneers selling at any one time.  Each will be surrounded by a swarm of farmers and at times some will break from the swarm just to join the swarm with one of the other auctioneers.  In the middle of this short journey he will buy a coffee, sandwich, or cookie from a 4 H or church group that set up a table at strategic locations.
    By night fall the event will be over and everyone will return to their own home some will be loaded with prize purchases but all will have about 5 lbs of mud on their boots they wear with a sense of pride because after all he is a farmer.

                                                                                                  Serving together, Dean


Sunday, February 1, 2015

Bad news lowers expectations

It's the time of year for bad news in the markets.

    Seems every year at about this time is when most news in grains is negative, and this year is doing it's best for bad news.

   1. Grain stocks show a rebuilding of supplies
         supply greater than demand is lowering prices
   2. Longshoremen on Pacific coast in contract dispute are slowing shipments
         increases costs of exporting grains
   3. Dollar is stronger than other currencies
         overseas buyers need more of their currency to buy each bushel

The result is $3.60 corn in February 2015 down from $4.50 Feb. 2014 and $7.00 Feb. 2013

The question for farmers this year is how to balance the budget at these price levels.

Switch crop acres?  Reduce rents to landlords? Reduce fertilizer, seed, etc. expense?

Probably all at some level.  But at lower prices we also need high yields per acre to make up shortfalls in price so reducing possible bushels is a problem.  Rents will need to be lower but if the farmer looses that farm to another farmer his cost per acre just went up (less acres to cover fixed costs).  Switching crop acres?  I think few farms have completely decided their acre mix and will delay this as long as possible.  Which crop Corn or Soybeans produce the greatest return is the easiest to evaluate and also the last decision that needs to be made.  Rents are being put in contracts before March 1st and most before that.

                                                              Serving together, Dean  


Sunday, December 21, 2014

year end planning

Taxes, Cuba, and Markets

    Spending some time finishing my books and doing some planning for taxes.  I am on a cash accounting system for reporting, so some inputs can be prepaid for the 2015 crops and deducted on this year expenses.  Congress just approved an extension to some machinery deductions that allows for one year deductions that would have had to be spread out over many years.  Many farmers take advantage of this because when they have a good year they then replace old equipment and need to wait until another good year comes along for the next upgrade. So I am not the only farmer doing the planning before the year ends and working with their accountant for advice.

    In the news!  Open trade with Cuba?  We have had an embargo with Cuba for 50 years so our farm commodities have not been able to be shipped for Cuban' exports.  Seems like this is a great opportunity to expand our markets.  Cuba is an importer of farm products to feed their nation. I agree that its time to lift the embargo because we are the only nation not trading openly with Cuba. Embargo's only work if all suppliers take part.  I pray that conditions for their population improve and maybe with open trade we can develop open communications also.

     Grain markets have turned higher as the harvest has been completed and grain is in storage.  Demand is building and prices rose to prompt farmer selling out of those bins.  All eyes are on projections of harvest in South America and plantings in the United States for further direction this winter and spring.
     Seems like random thoughts but that is what year end planning is.  Tying everything together, and thinking about what 2015 brings.

                                                                           Merry Christmas,   Dean

Thursday, December 4, 2014

Illinois corn yields set prices?

 More than Illinois it's the world

 We have finished with corn harvest with good yields.  Most of the corn went into storage that was built on the farm or contracted storage with local elevators.  Some needed to be delivered out of the field straight to market.  Users of corn are confident that supplies will be plentiful for this year and most likely for several more.  While some are buying at favorable prices there seems to be no hurry to buy needs further out.

Yes Illinois yields have increased supply which lowers prices.  There are also other huge factors now that were beyond the farmers control.

1.  The dollar is 10% higher now in the world market which means the overseas buyers get 10% less corn for the money.

2. Oil producing nations (OPEC) have decided to increase supplies of oil which lowered the gasoline prices.  Lower gas prices mean less ethanol blended into gas and less corn bought to produce that ethanol.

3.  The Beef herds have still not recovered from drought forced liquidation and are consuming less corn for feed.

Grain production has had some good profits for several years but the near-term outlook is worrisome to most.  The livestock producers went through the opposite.  High corn prices led to losses of all profit and now lower feed costs are providing the return to profitability.  I was amazed at how much efficiency increased in pork production when things were bad.  I call it forced efficiency.  Farmers were forced to take another look at everything they do to survive the market.  I see this happening in grain production now.  With no way to control grain prices, limited control of land costs, seeds, and other inputs more farmers will look at sharing their resources of time and equipment to maximize efficiency.    

                                                                                  Serving together, Dean  

Thursday, November 20, 2014

end of the season, another starts

corn harvested, tillage done, and ready for 2015

Seems that the last two years ended early with cold temperatures stopping fieldwork in a matter of days.  The ground is froze 6-8 inches deep so if tillage is not complete the farmer may have another chance if the rain and 40 degree temps forecast come true.  I did get everything finished so this is what it looks like now.  Some cornstalk residue is remaining that will break down over the winter and spring.  Lime was spread to correct the ph of the soil, and fertilizer applied to replace what was used by this crop plus a little more.
   It is undecided at this time if the field will be in corn or soybeans next year.  I have orders placed for next years seed but still need to book more so time will be spent going over harvest results on my farm and some test locations that give me comparisons.  There has been a soybean variety that has done well for me and was my best bean again this year but it is no longer in production.  I will be paying extra attention on what will replace it on the majority of my acres.
  Corn or soybeans?  If nitrogen fertilizer prices drop It looks like corn would have an advantage.  Production capabilities and petroleum price show some promise of a decline but will it happen needs some more time.  Demand for soybean meal has driven the prices for soybeans and this spring will tell me what the markets are encouraging, corn or beans. I may be making my decision as late as possible so am glad that all of my fields are prepared for spring either way.
   My yields were less that projected but we have been blessed with what we have been given.

                                                              Serving together,  Dean  

Sunday, November 16, 2014

Comforts of home

Field work progressing

We had some rain delays the week of October 13th but since then it has been full throttle.  The area had little corn left and soybeans done.  Tillage is going well up to now but with temperatures below freezing at night the ground will begin to freeze to the point that tractors will have to wait as day temps thaw the upper layer. Forecasts are for warmer next week and expect to see a lot of field activity at night  because we know winter is around the corner.  Lots of tractor seat hours but with the comforts of home.
 I bought a 1 1/2 quart crock pot and a power converter so I have been feasting on hot Jambalaya, Stew, Pulled pork (of course), and Taco Bowl.  Warning soup splashes too much when tractor hits a bump or stops.

                                                                                                      Serving together, Dean

Sunday, November 2, 2014

Good fences make good neighbors?

 I remember "Mending Wall" by Robert Frost.  The fence is serving as a line between two neighbors and they work together to maintain this joint benefit.  In that time period they were stone.  Most likely gathered each spring from the adjacent field making room for cultivation and crops.
 With progress became wire fences and no more lifting of rocks.  These were also serving as a property line but each farmer was responsible for only the right half of the line as facing the neighbors so they worked making and repairing by themselves.
 Today we need the line but because fields contain grain and not animals it can look much different.
Can you see the fence?
It is on software in the tractor cab the pink line shows GPS line between two farmers.  By the naked eye there is only a slight difference in color because the one on the right of tractor had time to dry for a day after tillage, the top 1/3 as a diagonal line. Most fences as we have known then are not needed and are being removed.  * The blue color is the path this tractor has made tilling the field.

Good "fences" still make good neighbors but it can be a pink line.

                                                                 Serving Together, Dean  

Wednesday, October 15, 2014

Join us this weekend

Please join us this weekend at the Dau farm.  2334 N 42nd road Sheridan.  October 18th 10:00 am

Truly there is nothing like it.  We start with worship representing 25 churches of many denominations.  Share music, food, and friendship.  We entertain and educate with activities for old and young alike.  And our goal is to raise awareness of world hunger and raise $70,000 this year for designated world hunger projects.  If you have enjoyed my blogging about the crops stop by where we are cooking the pork and say hello I like to hear what you want me to cover for the next year.  Ask for the cooks special and chat with us.
 You can see we will not run out of pork sandwiches.  Make sure you reserve a bag to take home.

                                                                                                      Serving together,  Dean

Sunday, October 5, 2014

4th grade science

 Remember studying photosynthesis?

   Below is a chart of normal cloudy or sunny days for northern Illinois.  from my posts you have seen how fast the corn is growing in May, June, and July.  We get enough rain to accommodate this especially this year.  It takes water and sun to build the healthy plant.  The next stage occurs in last half of July continuing into August and September.  That is when the grain is developing.  The plant is fully developed so not as much moisture is needed but the amount of sunshine is critical for the leaves to convert this energy into grain.
   Normally September is our sunniest month which makes this area ideal for corn production.  However this year turned out to be slightly cooler and cloudier than normal.  As a result the grain did not get as much energy to fill with starch.  Because of this each kernel weighs less.  Although we have a lot of kernels the combined weight of a bushel is less.  Less lbs per bushel equals less yield per acre.  So the first reports of harvest in my area are a little disappointing.  When we were scouting the assumption was for normal weights with this correction yield estimates would be up to 10% less than expected.

                                                                                   Serving together, Dean

Sunday, September 28, 2014

sharpen those pencils

The difference between $5.50 and $3.50 corn

     Farmers are looking a much lower prices this fall and probably for the next 3 years.  Production has made up for the shortfall in 2012 and now a surplus of grain exists worldwide.  There were several things that farmers were doing when corn was over $5.00 per bushel to get that extra yield.  Now with the prospects of $3-$4 dollar corn not all of these will create an economic return.  On my farm I was spending $22.50 for a aerial fungicide and $22.50 for starter fertilizer put on at planting. If those got me an extra 8 bushels at $5.55 per bushel I had a return on investment.  Now the same investment would need to return 13 Bushels if the price per bushel was $3.50.  As you see response needs to be much higher to make up for lower prices.  I have already decided that those probably will not work for me in the 2015 crop year.  The next thing I will be looking at is my seed cost and especially "traits".  There is an extra cost for different levels of insect resistance and herbicide tolerances in corn hybrids.  Is it cheaper to apply insecticides or get that protection from the plant?  To determine this I will be looking at yield results and seed costs for each hybrid.  Most of this information will not be available until next month and my decision will be soon after that.
    On the bright side the last few weeks has let the corn dry faster in the field than I thought it wood.  Expect to see harvest progress and use caution when you see farm equipment on the roadways.  They are traveling at a much lower speed and at times cannot see what is right behind them.  Be safe and slow down.  Every year I see a car that forgets common sense.

                                                                                                 Serving together, Dean

Saturday, September 20, 2014

What we are about

Sharing our Blessings

Harvest:                                              Corn near harvest
maturity line at 80% 

Ten days ago corn maturity line was 50% Great progression considering cool weather

We will be heading to the fields soon this corn was planted on April 22nd and has experienced good weather although cool all summer.  I am pleased on the dry down this week and know that while still to wet to begin another 10 days will get me to harvestable moisture.  A portion of this field is pledged to our local FRB growing project and it will be harvested prior to the Harvest Celebration on Oct. 18th.  40 farmers have combined to donate some of their harvest to this group.  

   The Farmers will join members of 25 churches that share our goals of alleviating world hunger.
Together we will worship, pray, eat, socialize, renew friendships, and make new friends.  Oh! we will also raise awareness of world hunger and about $70,000.  We then send 100% of these funds to overseas projects that work in communities uplifting them, helping them, and getting them to self sufficiency.  They in turn help others by teaching what worked for them and what they learned.

   Please be part of us.  Visit the FRB site to see if there is a project in your area that you can become a participant of.   or join us on the 18th.

*   Interesting fact:  It costs 13 cents to move my corn to the river. $1.12 to barge it to the Gulf, and $1.23 to ship it to China for a total of $2.48 

                                                                                Serving together, Dean