Just in Time

/

Partners,

It started raining here this past Wednesday about 6:00 in the morning.  We had pulled out of the final corn field at 3:00 that morning with the corn planting completed. We've received a little over 4 inches since then. Overall the field conditions were very good to plant into, and the first corn we planted on the 8th of April is up and looking good.

We have all the bean burndown (which we put on the field to prevent weeds from growing) sprayed on the fields that we're switching over to beans, so we feel good about planting progress. We hope to resume planting later this week, weather permitting--early soybean planting has helped increase bean yields. While planting we have been repairing tile, tearing out fences, preparing CRP ground for seeding, shipping corn and soybeans, and keeping the yards mowed. The season is off to a good start.

The Secretary of Agriculture was finally confirmed on the 100th day of the new administration. Hopefully he can hit the ground running and catch up the time lost in the confirmation process. There are lots of posts to fill in the department and plenty of stress and issues to deal with in the country. We have been supporting efforts to help the victims of the tragic fires in the western states. There are 18,000 miles of fences to rebuild, 12,000 head of cattle were killed, and seven people lost their lives.

In the family we are seeing the end the of school year in sight. Alison has a full load of AP testing and completed her ACT test a few weeks ago. Harper and Finley are having school music programs and Shanna is looking forward to summer vacation from WIU. Phyllis and I were able to attend Parents Weekend and see Ali play a lot of softball--fun time. Had a great Resurrection Day celebration at grandparents' house and lots of fun hunting baskets.

Fall bids:

Corn 3.55

Soybeans 9.05

Stay safe and keep in touch! Comment and "Like" below.

Steve

Spring Break

/

Partners,

The recent warm dryer weather has allowed us to work on some significant spring projects this month. We completed a 40 acre tiling project that we have been trying to accomplish since the wet year of 2013 when we had to replant and side dress NH3 on this half of an 80. Our goal is to drain 80 acres a year and we have been sticking pretty close to that the last 5 years. The last nice day this week we were able to get some brush removed from fences, along creeks, and taking out some long unused fence. All the waterway work from last fall is looking good with lots of green as the rye and grass are really growing with the warm weather, and with the light rains there has been very little washing to the vulnerable dirt work. All this taking place while Alison is on spring break from school, so she and her friend Ellie get to be part of the crew!

National scene: we are wondering why, after finally getting a nominee for the Secretary of Agriculture position, now the confirmation process is dragging on forever. After rural America played such a big part in this presidential election it is very frustrating that we have no leadership in the Department of Agriculture. Meanwhile the State of Illinois proves how spineless our legislature is by not even being able to vote on a state budget. Oh well--it is only costing us $11 million a day.

Family is doing well. Marcus and family went to see all the princesses at Disney World. We are eagerly awaiting spring planting to arrive so we can put all this planning and budgeting into the real world and await mother nature to show us who is really in charge.

Fall Prices: Corn 3.53 / Soybeans 9.71

Keep in touch! "Like" and comment below.

Steve

Changing Times

/

Partners,

Phyllis and I attended the annual meeting of the Association of Agricultural Production Executives (AAPEX) this past week.  

The keynote address was given by Marci Rossell, PhD (Former Chief Economist at CNBC & Leading Financial Expert). She is currently the Senior Economic Advisor for Delphin Investments. I will bullet-point some of what she shared so you can have a quick read about her observations and opinions about developments in the world.

  • Since the November election there have been great returns in the stock market because of anticipation of tax cuts and deregulation in financial sector -- this is probably not going to happen 
  • There will be a lot more volatility in the stock market
  • A Border Tax Adjustment (tariff) will strengthen the dollar which will cripple ag exports even more
  • The European Union is not an 'Optimal Currency Union' (she had several points about this), and the euro is failing (Brexit only the beginning)
  • Mass communication is contributing to the breakdown of commonality of the US
  • China is giving way to India economically -- India is the "fasting growing economy on the planet"
  • India has a youthful and entrepreneurial population and is accepting of the West
  • Over the next 15 years, the Boomer generation will give way to the Millennial generation because they (Millennials) outnumber the GenXers.  Millennials are generally laid back/not in a hurry about life; tend to be risk adverse, and typically have not chosen to vote. Their generation was hit hard by the downturn in 2008 and have experienced unemployment in a way the GenX generation has not.
  • one key question is will the millennials become more conservative as they age (like the Boomers have)

Her presentation was excellent, and very fast-paced so it was challenging to jot notes. This is just an overview of what I heard.

On the farm we are taking advantage of the open weather to cut brush, haul grain, prep equipment for spring, paint a tractor, relax the pace a bit before spring, get inputs delivered, and finalizing field operation plans for 2017.

Families are doing well. Marcus is taking a leadership development class and planning a family trip during spring break. Phyllis and I are appreciating our 40th year of marriage.

Fall prices:

Corn 3.64

Soybeans 10.17

Keep in touch,

Steve

Management Time

/

Partners,

Into the new year! The last few weeks, work-wise, have not been too intense due to holidays and personal time. We have most of our crop inputs ordered for the 2017 crop year: seed, fertilizer, and herbicide. For the most part seed prices and herbicide are steady from last year and fertilizer is down 20-25%. We tried some different herbicide products in 2016 to reduce costs and are looking at more generic products this year. We're also considering ordering some products direct from distributors to cut out middlemen. We have evaluated our equipment situation and are planning very little tweaking to our current lineup. We are replacing a few worn out items—auger and backhoe—but will inspect and repair all other items and put a few more dollars in the repair and maintenance budget. We have come up with a list of some surplus items, mostly livestock stuff, that we are marketing on several sites. We are also planning on raising our bean acreage; due to the increasing prices in the bean market, soy is getting more competitive with corn, especially if we can keep increasing yields. Our labor force is remaining stable although we feel for Marcus being the only employee under 60 on the full-time payroll. 

As for the ag economy, it is interesting that the president elect is waiting to choose a candidate for Secretary of Agriculture till the end of his nomination process. With a new farm bill on the list of legislation in the next two years, the background of the pick will probably play huge into the favored crop legislation process. But with the tighter budget constraints expected, the hope for larger ag subsidies are bleak. We keep in mind that over 60% of the agriculture budget is for the SNAP food assistance program.

On the home front we celebrated a great holiday season. Our whole family was together the day after Christmas. I had a new right knee put in on December 13—recovery going as expected. Marcus and Shanna celebrated a 10 year anniversary with a trip to a warmer climate for a week. The Lord has truly blessed us! 

Hope everyone is having a great 2017—we hope this year is your best ever! 

Steve   

Something for Everyone at the Ag Summit

/

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