It has been a long time since you calculated your breakeven cost of production. Remember that? Unfortunately, that calculation will have to be made this year, and the sooner the better. You should not make any commodity sales if you don’t know your breakeven costs, because it may be the difference between losing a little bit of money this year and losing a lot of money this year. The earlier the better for the breakeven calculation, because it may help guide the amount of money you pay for crop inputs.
What will be the relationship between corn and soybean prices over the next five years? Will substantial corn acreage and yields keep prices low? Will Chinese demand for US soybeans keep soybean prices higher than the 2.5 average compared to corn? Will high prices for nitrogen fertilizer push typical corn acres into soybeans? And the ultimate question is which farm program should be applied to which crop? The decision will need to be made soon, not only for the 2014 crop, but the 2018 crop as well. As your teenage daughter would say, OMG!
Congratulations, agriculture! If all of the planets line up as expected, a new 5-year Farm Bill will soon be in place to provide needed risk management and a safety net should the world collapse. Although the legislation needs House and Senate approval, the biggest hurdle is expected to be crossed Wednesday when the House is set to vote. Speaker John Boehner, who has never supported Farm Bills, despite early membership on the House Agriculture Committee, says he will urge Republican support of the legislation. Announcements of the completion of the legislation were made late Monday by the four members of the Conference Committee who did all of the work. All stressed their bi-partisan effort to succeed and expressed hope the bipartisanship could continue as the House and Senate vote on the measure.
Grim. That is the way farm profitability is looking as more farm economists are weighing in with their projections of crop production expenses for 2014. While costs may not be extraordinarily high, lower crop prices put farmers in the proverbial “cost-price squeeze.”
One has to have thick skin to work as a statistician at USDA’s National Agriculture Statistics Service. Regardless of the numbers one calculates and develops as a crop estimate, there will be instant criticism, challenges to your sanity, and possibly even questions about your parentage. Although the NASS staff is politically neutered and prohibited from engaging in any commodity market speculation, they are accused from all quarters of nearly everything including high crimes and misdemeanors. Poor devils, they cannot get a break.