It's the time of the year to make and finalize planting decision.
I don't like seed companies pushing the issue of what I want to plant in November. There are times I like to be contrarian to what everybody else is pushing to plant. Looking at September corn, KC wheat and soybeans, I see these prices on March 7 giving me net income per acre of 106, 78 and 199 respectively. These income figures are up 61 percent, 54 percent and 20 percent, respectively from the first of the year even though prices are only up 11 percent, 14 percent and 8 percent.
I think looking at your own yields and expenses gives you a different perspective than just looking at prices.
I track futures in a spreadsheet. I take an expected yield times the futures price minus basis minus my expenses per acre. Tracking the net income gives you a different look than just tracking prices. I also like to look at ratios of prices between crops. Corn has gained on soybeans here lately with the September ratio at 2.57 down from 2.66. As an aside, I was an engineer before I came back to farm. I like playing games with numbers and charts. My wife and kids say I tend to complicate things.
Soybeans have been a profitable crop for me in my area. They still look to earn the most per acre. But I have pushed soybean acreage so much the past two years, I had to increase my wheat and feed grain acres for rotation.
The market is going to make it interesting going forward. Income the past few years has been easy to come by if you received rain. The trouble going forward is "are we in for another cost-price squeeze in agriculture?"
I came back to the farm in 1976. Since then, there have been years I farmed for the experience - not the income. I am now six years over the average age of farmers. I hope the newer farmers realize the "cash is king" that we learned in the 80's can be important again. Government payments in those times represented a substantial part of your net income. The Kansas Farm Management data put out in summary books strongly suggests controlling costs leads to more profitability.
On commodity commissions
Congratulation to the newly elected commodity commission members. The commission perform many jobs for the farmers in this state. Helping fund research is one of their important roles. Since government moneys have been reduced, the commission money has become more key in funding the research being done.
My problem with our current system is that the individual commodity commission have blinders on that only look at their perspective crop. I don't know of any farmers that are monoculture growers to the point of only one grain commodity. So is this the best system for the research to help farmers in 10 years?
Currently, the research proposed and funded is almost a self-fulfilling prophecy. If researchers have been turned down in the past, do they stop proposing some projects beforehand based on their expectations? Wheat was a new crop in Kansas in the late 1800's. Soybeans were new in the early 1900's. Are we not looking at what might be the crops 20 to 50 years from now? The only fix I could propose would be to have one commodity commission instead of the separate crop specific commissions. I served on two commissions at the same time, but couldn't get anybody else to join me.
Planting is a critical time
When you see this, we will be in the midst of planting. Other people might think harvest is the most critical time for a farmer. I have always thought planting was. If you make a mistake in planting, it is hard to recover with good yield prospects. The newer equipment helps you know when you're running out of seed or having a skip. But it's still up to the operator to pay attention.
So - may you have a good planting season.
Steve Clanton calls himself a "has been." He has been president of the Kansas Association of Wheat Growers; has served on the board of 21st Century Grain Processors Co-Op, which is now sold; and has served both on the Kansas Wheat and Kansas Soybean commissions. Clanton also has been on the school board, NRCS board, extension board and North Central Farm Management board. He farms 3,100 acres of soybeans, milo and wheat, as well as some corn and sunflowers, in Ottawa County.