What is your opinion on the future of AG?

Question

Generally farmers are always optimistic that prices will go up. I'm not so sure I feel that way. What do you guys think.

Answer

corn and soybeans current high ending stocks coupled with future production creates a massive supply of grain, strong US Dollar making US commodities less competitive, production increases in South America.  All of these things doesn't present a recipe for prices to increase.

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You are correct that most farmers are optimistic, especially young producers that have not been through tough times.  The more optimistic and full throttle ahead you  were from 2010 to 2017 the better off you were especially if you had the right livestock and grains.  That can not always happen, the government has really helped lately or things would be a lot worse for all. Stay optimistic but everyone has to be more realistic!  I think it is going to be tough for 3 years and then will get better? I hope

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I think the future looks very bright, but then again, I’m a contrarian.

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As long as government is in ag and the industrialization of ag continues, ag as we know it will plummit and eventually be gone. Land is quickly marching into the hands of a few and that will eventually be into stockholder hands. When ag is fully integrated vertically and we all work for a conglomerate prices will skyrocket but there won't be any family farms. Be honest about it. We'll be able to farm for someone else- you won't own it. Go all the way back to the late 70's and follow where ag education has led us! Big farms supported by big govt. That will never be the recipe for independent  family farm success.

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**** i am wrong but commodities always seem to trend back to the Marginal cost of production. i think if you look at commodities as whole this is true. There will be some variations but i never see the day that corn and beans will be lucrative for an extended period of time. Hope i am wrong.

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Everyone talks about how bad farming economy is but everytime a piece of land is up for rent its getting ran even higher by farmers trying to be bigger.  Small guys can't compete yet hear more complaining about how they can't make it from the big guys while the small guy just goes at it.

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They will figure out ways to keep feed / food prices down, because that is in the government's best interests......you can see we are getting increasingly more pressure from other world markets, for the easy com and beans, and wheat.

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Things definitely do not seem promising out there.  Dad always said with an election year prices always go up.  Right that appears to be our only hope.  Big Ag companies are starting to feel the pinch with all the late pays and bad debt.  With the big dogs feeling the pinch hopefully things will turn around.  Government always seems to cater to the big guys.  Things have been against us for what seems like an eternity right now.  I know my bank is not happy with me right now and they are trying to foreclose.  I have some promising refi possibilities out there but things are tough.  I don’t think I am the only one feeling this, chapter 12 may soon become a reality for me.  Enough about me though, one thing is we can count on is that the markets always seem to do the opposite of what we think.  We need a turn around badly.

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Yes dairy is tough,  when I first read your reply I was talking to an ex dairy farmer that just sold his cows 18mos ago.  Prior To your respond I actually am getting rid of some ground and taking a job for the local Helena dealership as an applicator.  I was always told by my dad that you can’t have a job and farm.  At this point I don’t think I have a choice and I can’t take on any more risk.  Of course dad was was talking about a different type of operation he had a lot of process vegetables.  I am a college educated guy and approaching 50 years old and constantly nervous that they are going to turn off electric or gas.  Granted on top of it in 2017 my local bank got shut down and it just further buried me.  All I can do is pray and keep fighting.  At one time I was a Damn good farmer now now I just don’t know.  I think things are slowly turning around for me and I will keep you posted about refi.  It is an alternative lender the fdic banks kill us with regulations.  Farming no longer fits there equation..  Around here in nj banks are fair weather friends cause there is so much other industry.  When Ag turns around they will be your best  friend again.

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I agree with the bank part, they are nothing but a bunch of jerks....but they are trying to make a profit. The Farm Credit system gives back a portion of your interest paid in, so much better

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I agree the last four or five years have been really tough for dairy and not much better for growing corn and soy. As far as a big rally and corn I doubt it We had a catastrophe last year with prevent plant and we saw the prices hold some what steady, no big rally.  Hopefully if we can get the China deal straightened out and get some trading partners we can get back to the $4 maybe even $4.50 corn and $9 soybeans.  As far as dairy goes I think more guys are going to have to go out in order for the price to change but then those animals get taken over by other farmers and more milk is produced.  In the dairy industry it just comes down to We have too many animals that we do too good of a job with, not enough consumer demand and not enough trade.  If dairy and growing corn and soy were easy to survive ,everybody would be doing it

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I  am looking at five years out. I firmly believe that protein based meat will change ag as we know it..Another major point of interest in perhaps five to ten years is electric vehicles (EV)  How much ethanol does an EV use?  None.  ***************    Iowa city Iowa

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As long as the USDA can come out with any report it wants with figures that just don’t add up we will be in trouble. The RFS is being taken about and the law broken even after we are being told by a White House how much they support it and love farmers. Now with the corona virus I am afraid we are going to be in even bigger trouble

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Well, we may need to adapt to be able to thrive. Try some different farming methods, adjust crop mixes, grow what the market/consumer asks for, diversify our operations, etc...  Don’t “put all your eggs in one basket”.   Let us not underestimate what we can provide.

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I have been waiting for a turn around on the dairy side of things for 5 years. We might see small bounces for short periods of time, but long term ,it don't look pretty....we are so good at raising crops, if it goes to 4.50 -5 bucks corn, we flood the market. Best thing to do is find a niche, or do something for off farm income.

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Agriculture like most our economy is due for a major correction. Maybe it just me, but I dunno how a person continues to overpay land rent, and land prices, or pay to repair machinery. We bought a hydraulic end today cost us $101. Ag has a lot of problems, and I dont have all the answers, and I hate to say it, but maybe the record high bankruptcies are just the  beginning .

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What is your opinion on the future of AG?

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