Winter = Meetings

Partners,

We continually strive to stay abreast of the ever evolving agricultural landscape.  Phyllis and I just returned from the annual DTN/Progressive Farmer AG Summit in Chicago.  The theme for this year’s meeting was "Mastering Your Margins: Strategies for Ag’s High-Risk Cycles.” This provided us with three intense days of speakers, seminars, breakout sessions, and networking opportunities.  I really enjoy the DTN Ag Summit each year because it helps me with the effort to keep a finger on the pulse of the global agricultural industry.  It also helps me to stay focused, gain fresh insights, and be a better manager.

I thought I would share with you a brief overview of some of the topics that were discussed:

Risky Business:  Ag’s Climate Change Challenges (Greg Page, Executive Director, Cargill Inc. Board of Directors)

• More effort should be focused on possible solutions, rather than debating (the highly debatable) cause
• Long term planning of land usage needs to factor in the changing crop growing degree days
• Fish are very poor feed conversion creatures so aquaculture is not as promising as some had hoped
• Ruminant animals (by nature) have lighter environmental footprint

Weather Meets the Technology Frontier (Jim Block, chief meteorologist, Schneider Electric) & After El Nino: 2016 Crop Weather (Bryce Anderson, ag meteorologist, DTN/The Progressive Farmer)

• There is an astonishing amount of weather data being collected around the globe
• Weather data is being recorded and analyzed by increasingly sophisticated computer programs
• Weather forecasting will continue to improve
• The frequency of extreme weather events will increase

A Lender’s View of the Farm Economy (Mary McBride, president, CoBank)

• US economy is moving into a "not so bad" zone, and arguably the best economy going globally
• A strong U.S. dollar is a negative factor on agricultural exports
• There are now record world stocks of Soybeans and Wheat

Mastering MarginsPost-Crash (Chris Barron, president, Ag View Solutions)

• It is absolutely necessary to accurately measure all aspects of our business
• Economic survival depends on focus on higher yields and lower cost per unit

Brazil’s Soy Fronteir at Middle Age (Renato Rasmussen, Brazil economic analyst, Rabobank  Guilherme Scheffer, financial risk management director, Grupo Sheffer)

• Brazil has doubled SB production the last 15 years and now exports more than the US
• They have the potential for 3 crops per acre per year—(e.g.:  Soybeans, corn, cattle)
• Their average cost of SB production now is 7.10

Bottom-line on 2016 Market Outlook (Darin Newsom, senior analyst/DTN/The Progressive Farmer)

• The 4 C's (cattle, corn, crude, cotton) have all entered a new paradigm this past year
• The markets we are in now will not change till there is some sort of weather disaster somewhere in the world

Leadership the West Point Way (John Sterling, Lt. General, U.S. Army (Ret.)

• Be-Know-Do
• 3 kinds of leadership--Direct, Organizational, Strategic

Wrap-up/Take-Home Strategies

• Cash burn rate on corn acres next 3 years could be over $400/ACRE
• Get financials in order
• Be a problem solver

Overall, the experience was a bit sobering compared to last few years. Phyllis and I are old enough to remember the 1980s; we feel like this is the next generation learning experience for “Mastering Your Margins” when the going gets tough.

Current prices:

Corn 3.65

Soybeans 8.81

Steve

Giving Thanks

Partners,

We are taking some time this week to pause and give thanks for all the Lord has blessed us with. As we reflect on the past year we truly feel like a blessed people with our family, our community, our business, this nation, and this wonderful creation we are so privileged to live in. We hope you are able to spend time with loved ones and special friends and strengthen and enrich relationships with the people close to you this season. We plan to have all our children and grandchildren in one place on Thanksgiving Day - something we truly cherish - maybe because as we get closer to the finish line we can appreciate the things that will outlive us.

Even now in the midst of tough economic times and the everyday challenges we deal with (like leaking water lines and leaking fuel pumps and adverse weather conditions), I feel so blessed that the second farmers in this country (Native Americans were the first) chose to leave a place of safety and strike out for a place where they could be free to worship the God of their choosing and engage in pursuits that were of their choosing. May we have the courage today to stand up for what we believe and take action to preserve our God-given rights.

Steve

All Done

Partners,

Finished corn last Wednesday - done with harvest on October 14th! We think this is the earliest to ever finish, which is so fitting to follow the earliest ever planting finish date of May 2nd. We started harvest on the 14th of September and completed on the 14th of October; take out 4 Sundays (we did work one half Sunday doing beans) and the one and a half rain days on September 18th and 19th, and that means we averaged 120 acres a day with the combine. We did not handle as many bushels as last year, but overall yields were average - especially considering the wet weather of June. We feel blessed to have such bounty.

We appreciate all the great harvest help: Wayne, Charlie, Derek, Ryan, Mitch, Jordyn, Chuck, John, Dave, Grandpa, Aaron. 

We also appreciate all the combine riders to help keep the operators alert and on task: Oma, Opa, Finley, Abbott, Judah, Justin, Anne, Dustin, Lindsay, Tina, Zack, Truett.

Thanks again for your trust in us, your help in the work we do, and the part you play in production agriculture.

Steve, Phyllis, Marcus

The Last Acre II

Marcus & Abbott

Abbott

Papa & Judah

Ryan & Baylee Derham, Harvest Crew

Partners,

Weather has permitted harvest to roll along very quickly these lasts three weeks.

We finished soybeans Wednesday night and took a picture of the combine in the same area the planter was when we talked about planting the last acre in the spring--how fitting!

Soybean yields were good considering the weather, although the excess rains in June really did damage, especially on the flat fields without drainage (tile).

Corn harvest is half done and the corn is dry enough now that we can turn the dryer off and direct bin the rest of the crop - this will go fast. Yields are respectable, but again the excess rain really held back the low areas of the fields with poor drainage.

Overall, it's an average year. We are thankful for the great harvest weather, the great harvest crew, and the opportunity to work with this awesome creation - God has provided us with an opportunity to feed the world!

New crop prices:

Corn 3.67

Soybeans 8.54

Please don't hesitate to call or comment or like our post!

Steve

(Photo Credit: Most of the photos on this post were provided by harvest crew members Ryan & Baylee Derham. Thanks!)

Family

Partners,

The last several weeks have provided some opportunities for us to visit several of you away from the farm. This time for refreshing and renewal is vital for us to keep perspective about what we do here, and also provides a chance to deepen and build relationships with those who we work with on a regular basis. We truly appreciate all of you landowners and support staff for our operation. We want to say THANK YOU for all the time and trust you give us.

Harper and Alison are back in school. The past couple of months seem like a whirlwind now, but it's been a good and productive summer.

Harvest is about two weeks away. The list of projects has shortened. We are anticipating average trend-line yields. Another year of cooler than normal temperatures (What is going on with climate change? Another post for later.) will show us what kind of crop can develop without temperature stresses. The above average rainfall in June was the big disruption to crop development this year. Corn and bean prices have been falling for the last eight weeks from their summer spike; the consensus now is we need to get in the fields and really see what is out there.

Fall prices:

Corn 3.48

Soybeans 8.62

Keep in touch!