Every Thursday the grain market anxiously anticipates the export sales for the week, indicating the amount of corn and soybeans to be shipped abroad, and particularly how much will be going to China. That nation is hungry, growing larger, and has more money to buy what it not only needs, but wants. Subsequently, the US corn and soybean producer has been a willing seller to China, and the nearly one billion bushels of US beans and hundreds of millions of bushels of US corn will be sold to China. Most folks would say that is a good thing. Most. Not all.
“We can’t do much about it. We just have to sit and wait for it to happen.” That expression of frustration about the Farm Bill was offered Wednesday by a farmer attending a Cornbelt conference about Farmland Markets. While many farm organization lobbyists hope they have some impact on the outcome, the typical farmer thinks whatever will happen is going to happen and there is not much that can be done to change. Currently the power brokers wear red and blue, come from the House and Senate, and have been waiting for a meeting of the Conference Committee to be convened. The path is uncertain, and no one really knows how and when it will come to an end.
The key to knowing if you are making any money selling grain is knowing your cost of production. That was lesson #1 in your Vo Ag Class, at the Extension marketing meeting, and one of the initial questions your lender asks about. Calculating and knowing your breakeven price will help know if your latest grain sale was at a profit or at a loss. For the past few years, that has not been an issue. For the next few years, it will be a major issue.
What do these have in common: a grand slam home run, a hole-in-one, a pick six, Palmer amaranth? The answer is that they are all game changers. As many Cornbelt farmers harvested their crops this fall and found the tall spindly seed heads of Palmer amaranth, they realized it was too late in 2013 to do anything about it. After all, weed specialists had been urging farmers to carefully cut the weeds, remove them from fields in plastic bags, and burn them. If that did not get accomplished in 2013, what can be done in 2014 to plan for hundreds of thousands more Palmer amaranth in that field which normal weed control may not touch?
While Cornbelt grain producers are hoping the current low price of corn is only temporary, cow-calf producers and feedlot operators are trying to determine just how temporary it is. However, the market is satisfied abundant supplies of corn and that subsequent low prices will be here for the foreseeable future. Subsequently it has been willing to offer higher prices to the cattle that are enticing more production. Will the cowboy bite on that bait?