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What Is Your Yardstick For Success?
As a farm operator or manager of an agricultural enterprise, how do you measure success?  Is it how well you can feed your family from year to year, or is it the yield you produce compared to similar farms?  What is the yardstick by which you may (privately) judge yourself?

POSTED JANUARY 01, 0001
Ethanol: Bleak Presence, Brighter Future
Ethanol has seemed to have a run of bad luck lately.  First, it hit the blend wall, the maximum of 10% of the total motor fuel supply.  Then the recession curtailed some of the miles we drove and less gasoline was purchased.  Then the EPA proposes that the Renewable Fuels Standard (RFS) be revised to curtail ethanol production.  Then the government increases the fuel economy target for auto makers to ensure we continue on a downward trend of less gasoline being purchased.  Never mind the woes of the petroleum industry, all of those dynamics combine to limit the growth of ethanol.  It seems to have a bleak future, or does it?

POSTED JANUARY 01, 0001
USDA Planting Intentions and Grains Stocks.  No Surprise
The best rhetorical question asked on this day of significant USDA reports was, “Was there anything that surprised you?”  In looking at the response of the market, there were obviously no surprises that were considered significant.  That would be in relative terms to the last 5 years in which either beans or corn ended either limit up or limit down at the end of the trading day.  That is the definition of a market surprise.  While the March 31 Planting Intentions and Quarterly Grain Stocks reports were not surprises, they were not a yawner either.

POSTED JANUARY 01, 0001
Grain Stocks Will Be Projected by USDA on Monday. Will There Be a Surprise?
Will acreage estimates or grain stocks estimates on Monday have a greater impact on the commodity market?  Most of the market participants have anticipated increased soybean acreage and reduced corn acres, and many of the pre-report estimates have confirmed their expectations.  However, the market is quite uncertain about the amount of grain stocks on hand, and in the past it has proven to be a significant market mover, whether bearish or bullish.  We’ll explore the Quarterly Grain Stocks report, set for March 31 release.

POSTED JANUARY 01, 0001
Will The Market Really Pay You Next Fall For All Those Extra Soybean Acres?
Are you planning more soybean acres this year, as the market anticipates?  Are you undecided?  Are you staying with a normal corn and soybean rotation that is guided by agronomic issues, rather than market prices?  Probably one third of those offering an answer will fall into each category.  While fertility, disease, and insect pest pressures may dictate your acreage decision, those who are planting more soybeans or are undecided may need to work with the market more than usual this year.  Just because current prices may favor soybeans that may not always be the case when it comes times to take it to town.

POSTED JANUARY 01, 0001
USDA’s Budget Proposal: How Will You Be Impacted?
While the Farm Bill was under consideration, the USDA budget was a moving target.  And for part of the three years of Farm Bill debate, the entire farm policy was close to being driven purely by the budget.  In fact, the House of Representatives lopped off 75% of the USDA budget when the food and nutrition programs were shuffled off for separate consideration.  But now, the Farm Bill has been enacted into law and the USDA budget can be calculated.  Many of the program areas have mandatory spending levels, such as food and nutrition, crop insurance, and CCC loans, but other discretionary spending will float from year to year.  For Fiscal 2015, which begins October 1, USDA proposes to spend $146.4 billion, down from$156.6 billion in the current fiscal year and down from $153.9 billion in the last fiscal year.  So what appropriations were proposed for increase and what for decrease?

POSTED JANUARY 01, 0001
The Beige Book Is Out…The Agriculture Picture Is Not Rosy
Agricultural conditions softened since the Federal Reserve System issued its last Beige Book in January.  The latest issue expresses a number of concerns about the economic state of agriculture. “Severe winter weather affected several Districts with some crop damage being reported by Richmond and Atlanta, while Chicago noted disruptions in the flow of agricultural products. Both Kansas City and Dallas cited dry conditions adversely affecting wheat crops, while San Francisco reported concerns about water shortages and water costs. Several Districts noted falling feed prices had a positive effect for cattle and hog producers. Kansas City indicated farmland price appreciation moderated from the rapid pace seen in the past few years. Crop prices received in January by farmers fell from a year earlier for corn, wheat, soybeans, hogs, and chickens; prices increased for cotton, rice, oranges, cattle, milk, eggs, and turkeys.”

POSTED JANUARY 01, 0001
Caught You! You Spendthrift!
The truth is known!  The jig is up!  Since 2006 you have had a secret relationship with your machinery dealer.  You have acquired an expensive addiction to iron with new paint on it. In the past 7 years the amount of money you have spent on power has doubled.  Why is that?  Come clean now!  “Because you could?” Oh. OK.  Well, there must be another reason; come on, what it is? “Because the government wanted you to?”  Oh, well, that seems to clear up things.  You’re free to go, just watch yourself, now.

POSTED JANUARY 01, 0001
Taking Care of Business:  Crop Insurance
Your February farm checklist should include a visit with your crop insurance agent.  He or she will be happy to see you, and may have the coffee pot on.  Don’t wait until March 3rd rolls around and USDA announces the spring guarantees for Revenue Protection policies on corn and soybeans.  You already have an idea that soybeans will be just over $11 and corn will be around $4.50.  Nothing can be done about the lower guarantee levels compared to past years, but keep in mind guarantees have been lower than they will be this year.  Just go visit with your agent, have a cup of coffee and ensure that the policy on file for you does not need to be adjusted in the wake of the new economic era that we have entered.

POSTED JANUARY 01, 0001
Watch Interest Rates For Clues On The Land Value And Cash Rent Relationship
Buyers and sellers of farmland and those who are paying cash rents for farmland may only have to look at the interest rates of the 10-year Treasury note to determine the direction of cash rents and their rate of increase or decrease.  While farmland owners and farm operators do an interesting dance to negotiate cash rents, the outcome is quite relative to the Treasury yield.  How would it know?

POSTED JANUARY 01, 0001

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