Something for Everyone at the Ag Summit

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Phyllis and I recently returned from the DTN Summit in Chicago - here are the quick takes from the presenters and their topics.

DTN 2016

China and World markets
U.S. Will lead the way in global macro economy
Global demographics that drive food demand are still in place
For global markets there is a supply issue-not a demand problem

Farm Safety Nets & Farm Bill
2012 farm bill not passed till 2014-expect next bill passed quicker as economy worsens
For next cycle a late farm bill will be almost as bad as no farm bill
Farm Policy battle lines- payment limits, crop ins, regulations, snap vs farm programs

Tax Habits - Built to Last
Possible revisions to tax law and estate taxes
Dealing with the IRS-don't go it alone
Lessons on tax planning-need to do every year

Using Precision Ag
Food production must increase by 70% by 2050
We are competing with lower cost producers around the world

Weather
Ocean warming back up now-trending toward normal growing season-trend line yields

Teamwork fundamentals - astronaut Mike Mullane
1. Guard against normalization of Deviance
--Challenging but attainable goals
2. Responsibility & Accountability
--See something-Say something-Do something
3. Courageous self-leadership
--We are better than we think & so is our team!

Checking Ag's Vital Signs - Farm Credit & Rabobank
These financial times are not 80s ag economy repeated
Continued corn & soybean losses in 17 & 18
Producers will exit - just shifts acres to better producers
Need 6-8 mil acres to come out of production-CRP?
The greatest danger in times of turbulence is not turbulence ; but to act with yesterday's logic

Market Outlook-Darrin Newsom
Bean outlook not bullish technically or fundamentally
Ditto corn-stocks to use over 17%-ending stocks 2.4 billion bushels
Wheat is a very ill sister--record stocks globally
Challenges are gifts from Heaven
To achieve without risk is to win without glory
Problems are only opportunities in work clothes
Corn is strong cash price against record stocks
SB weak cash against record demand
Futures & cash will only decouple for so long
Don't look for soybean basis rally throughout this year
Action-buy Dec 3.80 puts .25-.30
Action-HTA 2017 bean production at 10.30

Lots of bullets here - if you have any questions or comments please contact us - very easy through the website!

Have a great holiday season!

Steve

Giving Thanks

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Partners,

We took advantage of the great mild November weather to work on many projects. Last week we completed NH3 fall application--in the fall we apply a half rate of nitrogen along with a nitrogen stabilizer to reduce the chance of leaching. We are also completing a rather large waterway renewal and upgrade project which included two new dry dams. There are pics of the earthwork and seeding above. With the rolling, more fragile type of ground we farm (we do have some nice flat fields as well) we have taken the charge to keep erosion control a priority. This includes regularly maintaining waterways, cleaning and maintaining the over eighty dry dams we have on the property we farm, and maintaining fences and field edges. Even without livestock, on a crop farm of this size there are always projects to keep us busy in the non-crop season.

The Thanksgiving season has given us time to pause and reflect on our blessings. Last week was filled with family, friends, and too much great food! There was plenty of political discussion around the table about what to expect in the next few years--how many campaign promises can be turned into real action? We appreciate the freedoms we enjoy in these United States, and recognize the processes which have led to many of the systems that we have in place--i.e. electoral college, health care, drawing of representative districts. The strength of the dollar since November 8th is one of the indicators we are watching. That affects our competitiveness globally and our commodity prices locally. We are in the process of putting together our crop budgets for this next year, and marketing will again be a very challenging part of our process!

Families are doing well and we look forward to having everyone together during the Christmas season. I will be having knee surgery in a couple of weeks. Marcus and Shanna are going to be celebrating their tenth anniversary this month. 

Fall 2017 prices:

Corn 3.47

Soybeans 9.93  

Let us know what you want to hear about--please leave comments and "Likes" below!

Steve

Last Day

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Partners,

Finished up Tuesday just in time to get the combine to the service center for an inspection, and all the grain tucked in before it started raining. Then the rain continued throughout the day on Wednesday. Harvest was a good one with above trendline corn and soybean yields. We are still compiling all the records to figure specific yields. 

The basis would seem to indicate that all the farm storage built over the last several years has changed the way crops are marketed. The old days of dumping all the extra crop that the bins won't hold at harvest are less. Most farmers are doing a better job managing the extra bushels, marketing-wise. We usually have enough HTAs (hedge to arrive contracts) to soften the blow of overrun bushels and allow us to absorb the extra crop to be marketed more orderly. This year even with the quick harvest due to the weather, there didn't seem to be a real harvest price low.

We put in pictures of my parents--Marcus's grandparents--in the field on the last day of the 2016 harvest. This year was the 62nd harvest by Hesses on the home farm where Marcus & Shanna live. Farming runs deep in the blood of the Doll side of the family also: at the farm where Phyllis and I live, which was homesteaded by Phyllis's ancestors, this year marked the 147th harvest by the Doll family. Marcus is the 6th generation to pick a corn crop here. We love this rich history!

Speaking of history, enjoy this World Series--GO CUBS!!!

 

Current cash prices:

Corn 3.19

Soybeans 9.67

 

Steve

Team Hess

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Partners,

Harvest is moving swiftly along. Last week we had a day that we handled a record number bushels of corn--almost 40,000. In our area there is not a lot of crop left standing. We are down to about 300 acres of corn which is about 3 days worth of good running. Fertilizer is being spread now and we have started tilling the fields for preparation for next year's crop. We appreciate all the good help this fall and the long days that have been put in. The heart of this operation is the people who make it run--all year round.

Prices seem to have been put in a harvest low, but with all the piles of corn across the Midwest it will be a long, slow road to much recovery. There are piles where there have never been piles before. A new challenge is the major appearance of a corn mold--diplodia--in the later picked crop. Apparently the growing conditions this year were perfect for its spread. I cannot ever remember getting dockage for this before.

 

Prices:

Corn 3.26

Soybeans 9.49

 

Stay Safe,

Steve

Middle

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Partners,

While watching the monitor Wednesday afternoon, Marcus announced we were half done with harvest, acre-wise, corn and beans. Things have been rolling along relatively smoothly, bringing in the good crop. We had a 1.5 inch rain event Thursday night which has given us a much needed chance to catch up on repairs and maintenance. Yields are still staying strong--this will not be a record crop but is above trend-line. I am always thankful to have the bushels--it is much more fun to manage the bushels to sell with the challenge of pricing for a profit, as opposed to a small crop and high prices.

The ag sector is eyeing the election opportunities with apprehension. It is no secret that Hillary is no fan of ethanol and the other candidate is a real wild card in the area of policy stands. Here in Illinois we will, for the first time, have a state legislature without a active farmer. The retirement of Senator John Sullivan and Representative Don Moffit leave agriculture with no direct link to the lawmaking process. To this end Marcus is very involved locally with the representative race to afford us a relationship link to state agricultural representation. Only a month left to go to see what all outcomes are. The state of Illinois politics has become the muse of the nation.

Our families kept busy during the rain delay. Saturday was an opportunity to help with the restoration of the Bushnell train depot. The community is coming together to restore the building to a community event center. Marcus and family are walking in a parade today in support of Norrine Hammond, our local state representative. We would encourage everyone to vote for the candidate of your choice and support whoever gets elected.

Fall prices:

Corn 3.11

Soybeans 9.44

 

Steve