Investing in Wheat In recent years, major seed and crop protection companies have invested more dollars into wheat and other small grains. Syngenta Cereals Marketing Manager Darcy Pawlik says the wheat industry is learning from technologies used in other crops. Biotech traits are not being used in cereals yet and Pawlik does not expect that to change anytime soon. From what Ive seen, we havent seen the appetite from lots of the places where we trade, whether thats Europe or Asia. The appetite for the introduction for GM traits just isnt there. We think we can make lots of progress using a technology like hybridization.
Three Part Series: Managing Stress on the Farm In agriculture, the only constant is change. Theres no way to control Mother Nature or what happens at the Chicago Board of Trade. Prairie St. Johns director of business development Monica McConkey is seeing stress levels increase on the farm. Its tough. Weve had several good years. Now were seeing a downturn. That causes stress by itself. With farming, there are lots of other factors that make it additionally stressful. If you throw the holidays in, its a change. Its going to be a tough winter for a lot of people. The stress on farmers is different than those in other industries with many farms being multi-generational family businesses. McConkey encourages a team approach for farm families when dealing financial stress. Learn more about the warning signs and resources available in the public and private sector in this three part series.
Survey Squeeze USDA continues working on improving farmer response rates to its various surveys. Farm Service Agency Administrator Val Dolcini says the accuracy of the numbers has significant financial implications for farmers. The results of those surveys go directly into the calculations for our ARC-County program. We need to see a certain number of surveys per county for us to create a payment formula for that county. Risk Management Agency Deputy Administrator Richard Flournoy says RMA offers another important financial connection between farmers and the National Ag Statistics Service. Generally, the NASS data is very important. The crop insurance program is driven off data. Its a force weve used for years to establish prices and predicted yield.
A Request for Delay The American Farm Bureau Federation and the National Association of State Departments of Agriculture have petitioned the EPA to delay the January 2017 start date of its worker protection safety rule. Farm Bureau and NASDA cited EPA violations of federal law as well as incomplete and undelivered compliance and enforcement tools to support their petition. The two organizations also claim that EPA has not told states how to implement the farmworker safety rule.
2016 Better Than Expected Where yields were good, there wont be as big of a need to restructure debt as some expected heading into this year. Norm Thoreson, who is with Farm and Ranch Financial Consulting in Turtle Lake, North Dakota, says 2016 was better than expected. The response Ive got from a lot of lenders I work with now is that we turned out pretty good in 2016. The yields were pretty good and the prices have come up a little bit. The ones Ive talked to dont see a lot of shortages. Thoreson says farmers were also much more conscious about cutting inputs this year, but he says lenders would still like to see cash rents come down. I visited with a banker and he said it appears fertilizer prices will be a little bit lower in 2017, but the one thing they cant get down is cash rents. As soon as some customers or farmers attempt to do that, theres always someone in the background willing to pay that extra dollar. Thoreson does not expect as much demand for Farm Service Agency loan guarantees as expected earlier this year.
Repositioning Agriculture Rabobank says the common thread of the four major agribusiness mergers and acquisitions is that input manufacturers are repositioning themselves to compete in an environment of lower farmer margins and more efficient use of inputs. Rabobank senior research analyst Ken Zuckerberg expects stable commodity prices over the next five years. Our equilibrium model calls for high profitability, 75 percent, corn prices will be at or below $4.10 per bushel in the next five years. That translates to average returns for farmers. To compete, Zuckerberg says farmers will need to negotiate lower land rents. From most of the sources we speak to, theres a consensus we would have expected land rents to fall further. In the long run, its about improving efficiency and productivity at the farm level. Zuckerberg sees an opportunity for efficiency and productivity gains, with the help of farm management software and modern precision farming practices
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