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Ever-changing farm business presents challenges, opportunities

Marshall Area Farm Business Management held a Crop Production and Marketing forum on Wednesday

December 19, 2013
By Steve Browne , Marshall Independent

MARSHALL - About 16 area farmers attended a crop production and management forum sponsored by Marshall Area Farm Business Management on Wednesday.

Rick Like, owner of Collins Commodities in Slayton, shared his thoughts on the market outlook for corn and soy. Al Brudelie, former dean of management at South Central College in Mankato who farms near Truman, talked about the effect of rapidly-changing technology on farming.

"I would like to start by saying the corn market, in my opinion, is still on a downward trend," Like said. "With every bit of positive news, the market seems to react negatively."

Like did say he was optimistic about a rally in corn prices but did not expect prices to rise dramatically higher. But he cautioned that if corn drops below $4.10 per bushel, all bets are off and there might not be a rally.

"I'm sorry to disappoint you, but I don't know where it's going and when it's going to get there," Like said.

Like also mentioned a strategy of holding corn in storage could be risky.

"I don't think this year's crop is in a condition to store long term," like said.

However, Like said the soybean market is stronger than corn, showing aggressive bidding by buyers, and he predicted a short-term bull market.

Brudelie identified the bottleneck for corn in 2013 in the driers. A plentiful harvest of high-moisture content corn meant driers were backed up. But for 2014 and beyond, Brudelie said he saw constant technical change requiring farmers to stay constantly on top of things.

"Do you realize how many ag apps there are out there for this thing?" Brudelie said, holding up his smart phone.

New variable-rate planters can with the appropriate software adjust seed placement to correspond with irregular field shapes, soil conditions and shut off seeding while a planter is turning on the field border, saving hundreds of dollars per day in seed.

The two-edged sword of technology is, according to Brudelie and to the hearty agreement of farmers in attendance, that local dealers often don't have the expertise to service the latest equipment or software.

Brudelie said within two years there should be soy seed available bred to be used with herbicides effective against water hemp.

Satellite imagery can show farmers the conditions of their fields with imaging technology that measures photosynthetic activity.

But Brudelie said there is a delay of a few days to get the data processed, during which field conditions can change radically.

But now there are drones available for $25,000 to $30,000 that can be programmed to fly over fields and land with the digital information, which can be processed within a day at an office in Mankato.

"I think this has a big future in ag," Brudelie said. "You can see changes in photosynthetic activity or aphid infestations. It would pay (for) some of you to go together on a drone."

As for marketing, Brudelie agreed with Like that corn prices were unlikely to rise to the heights seen previously any time soon.

"Brazil, Argentina and six other countries have put an area into corn about equal to the United States," he said.

According to Brudelie, from 2014 onward, the gap in profitability between the top 20 percent and bottom 20 percent will widen, and cash and liquidity will be king again. Controlling costs will be crucial to profitability, cost inputs critical and miscalculations could be fatal.

"Major crop and livestock enterprises should stabilize though," Brudelie said, "and opportunities will abound for businesses which are properly positioned."

 
 

 

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