Equipment

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Partners,

We are keeping busy with lots of winter work, diligently trying to keep our equipment costs low to stay competitive. Hence we operate a lineup of modern used equipment. Our sprayer has been through the shop and now the combine is in process. All of our major pieces of equipment are professionally inspected each year and a list of worn or questionable parts is developed. We then use our labor force to upgrade the projects on the list we are capable of completing. The bigger, more involved tasks are performed at the dealership. When each tractor, combine, sprayer, planter, and head is put into storage it is ready to go to the field when planting/spraying/harvest season comes.

The lure of new paint is one we try to avoid. Just like the depreciation hit new vehicles take the first two years, we try to be wise about the true cost of our equipment lineup over time. We believe our equipment capacity is adequate for the number of acres we farm and labor available, but there is not much margin for breakdowns or time lost to equipment malfunctions. We did some major upgrading 6 years ago when we moved up to 24-row planting equipment. Of all our major pieces of equipment, the planter is the only thing we purchased new.

Commodity prices have been trading a very narrow range for several weeks now. Corn and beans are poised to break out either higher or lower soon. I will discuss weather soon in another post. The tariffs/trade war situation with China is ongoing but showing some positive movement toward resolution. The first big step will be getting the Chinese to admit they have been bending the rules in the first place. We hope Congress approves the new USMCA agreement; seems to be lots of positive things in it for Ag. The new Farm Bill is being implemented and apparently there is a lot more to it than just a renewal of the 2012 act—a lot of pages with new details. The weather pattern is causing some disruptions in the Midwest for river traffic and grain deliveries. We are thankful we had very little grain to deliver in January-February.

Family doing well. Lots of missed school days with all the weather issues. (That is one thing the homeschooled kids miss out on is snow days and make-up days.) We do still have 14 head of heifers to care for so there has been some struggle with frozen waterers this past month.

Fall prices

Corn--3.73

Soybeans--8.96

Keep in touch,

Steve

New Year

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Partners,

The new year is moving so quickly! We are diligently finishing up last year’s records, getting W-2s and 1099s out, looking back at what we learned last year, and making plans about what to adjust for 2019. Our office seems to be a beehive of activity with some late nights involved. Schools are all back in session but there have been several late starts and snow/ice days this past week. The official snowfall this past weekend was around 14" and more is forecasted for tomorrow. Marcus attended the Top Producer meeting in Chicago this week and brought home some new management ideas. Steve was at the Precision Planting meeting in Tremont Thursday for catching up on the latest updates in planter technology.

The government shutdown has affected us a bit. The local FSA office is closed but will reopen for three days next week; but there is very little traffic through there this time of year anyway. The soybean market is very volatile according to who-says-what about trade negotiations with China. It seems that agriculture supports a border wall but also wants a rewrite of immigration policy to allow foreign workers access to our labor market legally. Now the leadership of the house wants to take a vacation! All of this political brinkmanship is quite the show to watch. 

All children and grandchildren back in school -  at home, elementary school, or college . All the snow days are enjoyed (except for the makeup work). Lots of sledding and snowman building. Phyllis and i hope to make it south for a bit in February. 

Current prices:

Corn 3.56

Soybeans 8.54

Fall Prices:

Corn 3.68

Soybeans 9.00

Be careful in the winter weather!

Steve

Notes from the 2018 DTN Summit

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Ag Secretary Sonny Perdue

  • Trusting but verifying China trade reform

  • China rising storm

  • China growth rate lowest in over a decade

  • Huge food deficits

  • Rural to city population move continuing along with higher food standards

  • Asian swine flu causing major disruption of meat consumption & prices

Grain Marketing

  • # of farms in US has declined 23% in 30 years

  • # of acres farmed has declined 3%

  • Bunge-1818

  • Louis Dreyfus-1851

  • Cargill-1865

  • Average managed futures fund- 4.5 years lifespan

Jim Carroll, Futurist

  • 7 out of 10 children will work in jobs not existing today

  • Multiple trends merge, speed accelerates

  • Massive transformation, crazy ideas, bold thinking

  • Every industry becomes a software industry

  • Moore's law defines innovation velocity

  • Science exponentiates

  • Strategies scrambled

  • Reinvention dominates

  • Time collapses with advanced methodologies

  • Global trends globalize

  • Science, health and tech get married

  • Packaging changes, packaging connects

  • Gamers game, virtualization emerges

  • FarmVille

  • Generations change

  • Think big, start small, scale fast

Blockchain

  • Bitcoin or some digital currency will become common

  • Connected computers reaching agreement over shared data

  • Public Key Encryption

  • Any supplier of leafy greens to Walmart must use blockchain

  • Product traceability in 2.2 seconds

  • Market transparency

  • Security Efficiency

Improving Your Family's Business Together

  • Ownership vs Management

  • The change from business to legacy

  • Healthy communication

  • Articulated expectations

  • Agreement on goals

  • Accept & respect

  • Professional development & emotional intelligence

  • Understanding business performance

2019 Weather-Rolling Sevens, Bryce Anderson

  • Weather looking like 7th growing season with no big problems

  • There is enough corn acreage planted that we are affecting summer weather patterns

  • Slowest harvest since 2009

  • 70% chance of weak El Niño into summer of 2019

  • Colder than normal winter - winter lasting into March

  • Cold & reduced snow

  • Global warming continues - not so much in Midwest US

  • More weather volatility coming-heavier spring rains, drier warmer summers

Market Outlook, Todd Hultman

  • In 2015 extreme poverty fell to 10% of world population (>$1.90/day)

  • World demand for soybeans up 260% in 30 years

  • Cash corn price range estimate 2.40-3.80

  • Cash wheat price range estimate 3.80-5.50

  • Cash soybean price range estimate 6.50-9.50

Giving Thanks

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Partners,

Got eight inches of snow last Sunday overnight which has slowed down outside work, and 50mph winds meant Monday morning was devoted to snow removal. The snow has also has given me time to reflect of all things we are thankful for such as:

On The Farm…

Bountiful crops

Safe Harvest

Great Landowners

Helpful input suppliers

Modern Equipment

Super Team Members

This Country…

Freedom 

Free Enterprise

Open Markets

Democratic Elections

Safety

Our Family…

Health

God-Fearing Kids and Grandkids

Comfortable Housing

Our Church

Plenty to eat

Take a moment and count and reflect on what you are blessed with. We really have so little to complain about and so much to be thankful for!

Current Prices:

Corn 3.45

Soybeans 8.37

Steve

Last Rows

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We finally found those last rows last Wednesday night about 8:30. Spent all day Thursday getting things tucked in for the rain that night. It was a good feeling during the rain on Friday to be finished. We have a lot of beans stored this year; we only hauled one load to the river. Big thanks to all the great help! Now on to the jobs we put off during harvest. Cleaning equipment, dirt work, tiling (80 acre project), catching up in the office. Planning to start NH3 application after November 1. Looks like the beans were best ever--corn did well, too. The moisture of the last corn hauled from field to shuttle was under 15% and stalk quality was suffering. 

The ag world is wondering what the next move will be in the tariff war chess game. The new Brazilian president is planning on turning his country loose for full production. He has even backpedaled on restricting Chinese investment! The commodity prices right now favor corn next year—looks like beans might not move above break-even. The elections next week could make for some interesting plays too. The governor front runner in Illinois is pushing for progressive income tax and a mileage tax on vehicles to raise money for road repair. We are already the second or third highest taxed state in the union. No one has mentioned any real estate tax relief. 

Family is well--holidays will be here soon to give us a time to reflect on all the things we have to be thankful for. Winter meeting season is heating up too.

Current prices:

Corn 3.36

Soybeans 7.84

Enjoy the fall colors!

Steve