Minding Ag's Business
Marcia Zarley Taylor DTN Executive Editor

Tuesday 02/09/16

Farm Income in the Dumps
For the fourth year in a row, USDA expects crop incomes to decline in 2016, based on forecasts released today. The main good news for grain producers is that the steepest income declines since the Peak Corn-era are leveling off and savings in crop production costs are beginning to help heal farm losses.[Read Full Blog Post]
Posted at 4:26PM CST 02/09/16 by Marcia Zarley Taylor | Post a Comment
Comments (1)
Good information, Marcia. One thing to keep in mind is these lower farm incomes are taking their toll on rural America. In my area of Ohio the equipment dealers are really suffering. This flows through the entire agricultural supply chain and distribution channel.
Posted by tom vogel at 9:00PM CST 02/09/16
 

Monday 02/08/16

Crop Insurance Falling Short
Crop insurance guarantees for 2016 won't offer much financial comfort, if preliminary prices for the first week of February are any indicator. Unless that scenario changes radically in the next few weeks, expect repercussions on how much operating credit lenders are willing to finance for the most stretched operations.[Read Full Blog Post]
Posted at 5:13PM CST 02/08/16 by Marcia Zarley Taylor | 0 Comments | Post a Comment
 

Tuesday 02/02/16

Fertilizer Holdout Hits Buy Button
Farmers have been waiting for the right moment to cash in on 2016 fertilizer savings. For this Mississippi farmer, the time is now.[Read Full Blog Post]
Posted at 11:23AM CST 02/02/16 by Marcia Zarley Taylor | Post a Comment
Comments (1)
Might be a good year to seed some sweat clover for plowdown and go fishing.
Posted by Bonnie Dukowitz at 3:33PM CST 02/04/16
 

Thursday 01/28/16

Don't Trip on Farm Bill Technicalities
The current farm program safety net--downsized as it is compared to past legislation--still could mean the difference between profit and loss for many farmers in 2016. So lenders and farm program specialists are urging growers not to overlook technicalities that affect eligibility for everything from Farm Service Agency checks, FSA loans, crop insurance subsidies and conservation payments under current Farm Bill rules.[Read Full Blog Post]
Posted at 1:37PM CST 01/28/16 by Marcia Zarley Taylor | 0 Comments | Post a Comment
 

Wednesday 01/27/16

Getting Farm Owners Ready for the Finish Line
In his two latest columns, DTN's Farm Business Adviser Lance Woodbury addresses ways to overcome the obstacles that hinder a transition from one generation to the next in a family business (subscribers see his column "Five Steps to a Better Exit" on the Farm Business page).[Read Full Blog Post]
Posted at 11:10AM CST 01/27/16 by Marcia Zarley Taylor | 0 Comments | Post a Comment
 

Monday 01/25/16

Leasing Helps Cure Machinery Dealer Blues
To clear excess used farm equipment off their lots, proactive farm equipment dealers have steered customers into leases and discouraged annual trades.[Read Full Blog Post]
Posted at 2:29PM CST 01/25/16 by Marcia Zarley Taylor | Post a Comment
Comments (1)
Now Jack is using a two-year lease, meaning he will trade a two-year-old tractor with no more than 1,500 hours rather than two tractors with 750 hours. That cuts trades in half?????? What? When he was buying he bought two, but now that he is leasing he only needs one? Not really, He only trades one either way, it's just two years old now instead one year old as he would have done in the past by trading every year.
Posted by Dakota Ag at 12:56PM CST 02/06/16
 

Tuesday 01/12/16

Coach Kohl's 2016 Playbook
When Virginia Tech Economist (Emeritus) Dave Kohl speaks to farm audiences these days, he paces the stage like a nervous coach shouting plays before the clock runs out. His advice to attendees of Texas A&M's elite TEPAP program this week in Austin was to get 2016 finances in order.[Read Full Blog Post]
Posted at 6:02PM CST 01/12/16 by Marcia Zarley Taylor | Post a Comment
Comments (11)
#8 let neighbor farm the high priced ground
Posted by Unknown at 7:15PM CST 01/12/16
Spoken just like Coach Kohl!
Posted by Marcia Taylor at 8:26PM CST 01/12/16
I think 17 will be the year of reckoning for everybody else did all your seven last year can't eat just crackers.This country needs to find its reset button and quit riding our resources to see how long they can go before it breaks
Posted by andrew mohlman at 9:56AM CST 01/13/16
Will ask again what were the losses per acre in the 80s crisis I think we are surpassing them? Maybe coach knows
Posted by andrew mohlman at 10:01AM CST 01/13/16
Andrew, and to think these guys are getting paid to make it all sound like rocket science!!
Posted by Raymond Simpkins at 10:54AM CST 01/13/16
Gross losses are higher, as for % wise, I believe we are still a bit lower. However, our profit margin going forward will be small in % to input costs. Commodities are a zero sum game (based strictly on economic theory) so only the efficient will profit, the average will breakeven and the inefficient will be driven out of business. 2016 won't be pretty, and some won't likely survive if they are not minding their bottom line diligently. I heard/read once that it was only the bottom 10% of the farmers in the 80's that got flushed out (granted in a short window) that caused the last farm crisis. Stay alert...
Posted by Pedro Sanchez at 8:21AM CST 01/14/16
Another step so called coach should push is to sign up every acre you can in CRP. In years 15,16 and 17 over 8 million acres are eligible and should be enrolled. Government rents are running high.
Posted by Raymond Simpkins at 7:34AM CST 01/16/16
CRP? Yeah, government entitlements are the solution. Don't forget to vote for Bernie Sanders, either!
Posted by Unknown at 5:33AM CST 01/19/16
Yeah,We need to take acres out of production someway. Just saying have heard government rents are running around $300.00 in our county.
Posted by Raymond Simpkins at 6:48AM CST 01/19/16
Perhaps Coach Kohl can show us all how to cut expenses by 10 to 30 per cent. I'm listening.
Posted by Ed Arndt at 9:48AM CST 01/24/16
Re: cut expenses as in every business, the fat is in the payroll
Posted by Unknown at 7:45PM CST 01/24/16
 

Thursday 01/07/16

Landlords Win This Round
Final results are in for the latest DTN 360 online poll. On the question of how much cash rents have adjusted since commodity prices peaked in 2013, the answer is not much. As I mentioned in my last post (when counting tentative poll results), that bodes ill for high cost operators who rent the majority of their land.[Read Full Blog Post]
Posted at 1:40PM CST 01/07/16 by Marcia Zarley Taylor | Post a Comment
Comments (3)
Oh boo hoo to all the big operation idiots who ran rent up and took land from good small operations who knew it would never work at those big inflated numbers. You reap what you sow.
Posted by Farmer Johnson at 8:27PM CST 01/09/16
Marcia: Have you adequately figured in the lower fuel, equipment, and fertilizer costs? They are all coming down and thus operating costs for the farmers are declining substantially.
Posted by tom vogel at 8:10AM CST 01/12/16
Tom must be in a different country than I am only fuel is down substantially rent will only go down slowly because of outrages property taxes. nobody cares about the older people who need the rent to live in retirement or family's paying for there care. When peoples 401k takes a loss its all over the news.Thirty to fifty percent devaluation in a short period is bull and created to steal commodities and resources by those with little to none figure that out tom.
Posted by andrew mohlman at 9:03PM CST 01/13/16
 

Monday 01/04/16

Three Years of Losses Hold No Charm
For the record, farm renters report a standoff in 2016 cash rent negotiations. That likely means even those paying "average" rents for their area will need to dig into farm savings to cover operating losses for the second or even third year in a row.[Read Full Blog Post]
Posted at 3:58PM CST 01/04/16 by Marcia Zarley Taylor | Post a Comment
Comments (8)
Excellent article. I think we are living in a dream world if we think the profitablity in farming is coming soon.
Posted by Unknown at 8:16AM CST 01/05/16
Deflation has become accepted, in a politically-correct sense, in many developed nations but so far not here. Negative interest rates now exist in some European nations. Regardless of the acknowledgement or not, look out!
Posted by H. Clay Daulton at 8:38AM CST 01/05/16
Does anyone at DTN read what they write? You guys are advising farmers to farm at a loss for a few years just so maybe just maybe we will survive to farm in the future. Thats really good business and advise. I am not going to burn up my savings for the hell of it. Farm what you can and farm smart,let the next guy go belly up then you can have your land back. One minute your telling everyone to cut cost,then they run an article on no-till and that guy is using almost 300 pounds of nitrogen to produce 225 bu. corn. We get yields that high with 120 pounds. So why does DTN promote these guys? We need to cut yields not increase them. We would be better off growing 125 bu.corn than we are growing 200.
Posted by Raymond Simpkins at 12:25PM CST 01/05/16
Re: Simpkins's comment: As a freshman at OSU (Oregon) in 1961, Dr. Mumford taught us in Ag Econ 101 that almost all agricultural commodities are produced at quantities far beyond maximum return to industry and, therefore, to individual producers as well. I believe the same was taught everywhere. There's nothing new to add in the intervening 55 years, and government programs insure that same-old, same-old will continue. Unfortunately for those of us in agriculture, we are a solid nation because our basic food supply is many times what it needs to be for subsistence. As a producer and active industry participant, I have always worked toward reducing absurdly incentivized supplies and fair trade as opposed to free trade.
Posted by H. Clay Daulton at 8:49PM CST 01/05/16
Just read on DTN fertilizer trends one guy from South Dakota is going to fertilize heavy,hoping to make it up in bushels. Smart move,just what we need is more bushels of anything. So grain prices will be even lower in 2017. Your playing right into the fertilizer and chemical companies hands. Do you see oil companies drilling new wells everywhere now that oil prices are low. Think about it people we can control the market to some extent.
Posted by Raymond Simpkins at 7:30AM CST 01/07/16
Raymond, I don't have all the answers but I do read our copy and your comments. Aiming for yield is a farmer's self defense. At $3.50 corn, "average" costs and 193 bpa, Minnesota growers stand to lose about $86/acre on average in 2016, according to Univ of Minn estimates. If they can bump it up to 210 bpa, they'd eke out a $58/acre profit. Let's just hope weather someplace else dings global supplies or export demand perks up. Supply controls don't work too well--just watch how OPEC is controlling the glut of global oil.
Posted by Marcia Taylor at 11:09AM CST 01/08/16
How does that work? 17 added bushel at 3.50 gains you 59.50 per acre. So at a negative 86.00 an acre plus 59.50 you are still 26.50 in the hole. Plus added inputs to get the extra bushels. Mother Nature is still are biggest yield factor. She makes or breaks yield.
Posted by Raymond Simpkins at 12:29PM CST 01/09/16
Marcia how large were the losses per acre in the farm crises of the 80s?
Posted by andrew mohlman at 8:07AM CST 01/11/16
 

Wednesday 12/30/15

Tips for Exiting the Business
In his latest column, DTN's Farm Business Adviser Lance Woodbury addressed four obstacles that typically hinder transitions from one generation to the next in a family business (subscribers can find"Letting Go of the FamilyBusiness"on the Farm Business page).[Read Full Blog Post]
Posted at 11:26AM CST 12/30/15 by Marcia Zarley Taylor | Post a Comment
Comments (1)
Great interview. / HCD, 72
Posted by H. Clay Daulton at 9:24AM CST 12/31/15
 

Tuesday 12/22/15

Midwest Land Surprisingly Steady
Don't be misled by news of "no sales" at auctions across the Midwest. Prices for low-quality land may be in the dumps, but good and excellent quality farmland seems to be retaining or even gaining in value so far.[Read Full Blog Post]
Posted at 4:01PM CST 12/22/15 by Marcia Zarley Taylor | 0 Comments | Post a Comment
 

Thursday 12/17/15

Wise Men Get Last Word on Profits
Given dire forecasts for corn and other commodities' multi-year profit abyss (see my last post), it's worth hearing how some of agriculture's wise men plan to adapt to the new economics of crop production.[Read Full Blog Post]
Posted at 12:18PM CST 12/17/15 by Marcia Zarley Taylor | Post a Comment
Comments (2)
These are your wise men? One has $660 per acre in equipment,we farm with half that. Good luck getting Pioneer to lower the price of a bag of seed corn a $100. And why was that poor ground ever taken out of CRP? Because of greed!! Potash won't stay lower for long,they are shutting down mines now to create demand. So why as farmers are we to stupid to do that? Why would you plant corn when you say an Iowa farm with 250 bu. corn lost $300 an acre in 2015. Might better leave it all lay idol and not lose anything,at the same time creating a shortage.
Posted by Raymond Simpkins at 7:51AM CST 12/18/15
There would not be enough in six months we would be begging China to sell some back to us and the market likes to act like we have so much surplus my crack pay us fairly people quit stealing.
Posted by andrew mohlman at 8:10AM CST 12/18/15
 

Tuesday 12/15/15

How Deep Is Corn's Abyss?
It's been a favorite quote on Twitter recently that $7 corn covered up problems and $3.50 corn exposed them. Bloated cost of production must be Problem #1.[Read Full Blog Post]
Posted at 5:00PM CST 12/15/15 by Marcia Zarley Taylor | Post a Comment
Comments (3)
Guess we will find out if the world needs 20 percent of American farmers expense won't go down enough. Efficient ones won't last at those losses a steady load of negative talk gets old and unimaginative. Cost of production will be met eventually or collapse will occur.
Posted by andrew mohlman at 9:28PM CST 12/15/15
Andrew,everything is playing right into the governments plans. You've heard of the Big Three right! Corporate American Farms is what they want. So you might as well find some other profession. They just approved a bill to fund farms with multi owners millions. But the inefficient farmer should not be farming and won't be in a few years. Most have created their own doom and can't get out. I can't believe a farm with 500,000 in gross revenue only needs 150,000 in cash reserves to be considered at top producer. Oh well.
Posted by Raymond Simpkins at 6:03PM CST 12/16/15
If corporate farms are what they want there fools to think food will get cheaper family farms have served this country well and have been treated poorly Guess I am an insurgent gorilla farmer in for a fight surrounded in a country that doesn't like me.
Posted by andrew mohlman at 7:15AM CST 12/17/15
 

Monday 11/30/15

Rules of Engagement for Family Fights
With the holiday season upon us, expect more dinnertable business talk--and the possibility of some heated words.[Read Full Blog Post]
Posted at 3:30PM CST 11/30/15 by Marcia Zarley Taylor | Post a Comment
Comments (4)
For the last 10 years I've been everyone's favorite brother. not so popular w/city folk after lowering cash rent. farmer's lives matter!
Posted by Unknown at 9:01PM CST 11/30/15
Ask them if they would like half of a paycheck for there work
Posted by andrew mohlman at 6:17PM CST 12/01/15
Both of the first two comments hit on an important issue - that of educating off-farm family members about the economics of farming. Having a discussion with them about the best ways - the process - to keep them aware of a changing business of which they are owners or beneficiaries is important. A deeper opportunity or issue are the expectations that go with joint ownership of assets: An underlying �expectation of ownership� in this case might be: If they are going to be owners of something with on-farm partners, it is important for them to pay attention. (Discussing such ownership expectations is one of the best practices of family businesses.)
Posted by Lance Woodbury at 10:22AM CST 12/05/15
Re Lance Nice idea, but you don't know my sisters! Show me da $, Bro
Posted by Unknown at 7:08PM CST 12/06/15
 

Wednesday 11/25/15

Farm Income a Downer? Try Machinery Sharing
USDA revised projected 2015 farm incomes down from earlier forecasts this week, mostly on worsening prospects for livestock producers, USDA’s Economic Research Service said. But falling prices in 2015 will affect every major commodity sector, from grains to beef, dairy and hogs.[Read Full Blog Post]
Posted at 2:06PM CST 11/25/15 by Marcia Zarley Taylor | 0 Comments | Post a Comment
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Recent Blog Posts
  • Farm Income in the Dumps
  • Crop Insurance Falling Short
  • Fertilizer Holdout Hits Buy Button
  • Don't Trip on Farm Bill Technicalities
  • Getting Farm Owners Ready for the Finish Line
  • Leasing Helps Cure Machinery Dealer Blues
  • Coach Kohl's 2016 Playbook
  • Landlords Win This Round
  • Three Years of Losses Hold No Charm
  • Tips for Exiting the Business
  • Midwest Land Surprisingly Steady
  • Wise Men Get Last Word on Profits
  • How Deep Is Corn's Abyss?
  • Rules of Engagement for Family Fights
  • Farm Income a Downer? Try Machinery Sharing
  • Farmers Split Over Wall St. Landlords
  • FSA Fixes ARC Payment Glitch
  • Land Investors in the Wings
  • Harvesting Profits from Peak Corn
  • Rx for Low Prices