More in Issues

May 8, 2012

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Too Much Rain and 2012 ACRE Details

It’s hard to believe that in less than a 10-day time period we can go from concerns over drought to excess rainfall, which is causing flooded fields in some areas. That is exactly what has happened dung the last few days of April and the first week of May in some parts of southern Minnesota. Much of the rain came as part of intense thunderstorms with heavy downpours that caused some flash flooding, and featured strong winds and large hail in some areas. The wind and hail did cause some isolated building and property damage in rural areas, but had very minimal impact on the newly planted crops....More
May 8, 2012

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Farm Bill Details and Analysis

Although the Senate Ag Committee’s farm bill draft is just that – a draft – it will certainly be the starting point for further negotiations in formulating the final bill. We gave the framework for the key new programs, but you can take a look at the full bill here (pdf)....More
May 2, 2012

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Nation's 100 Largest Ag Co-ops Post Near-Record Sales, Margins

The nation's 100 largest agriculture cooperatives reported near-record revenue of $118 billion in 2010, USDA Rural Development Under Secretary Dallas Tonsager has announced. This was an increase of 4% over 2009 figures. Net income for the 100 top agriculture co-ops was also up more than 10% in 2010, reaching $2.39 billion, up from $2.16 billion in 2009....More
May 1, 2012

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Perspectives From Canada

My road warrior travels recently took me north of the border to Canada. It is amazing how many Americans know so little about our biggest ally to the North. I laugh when U.S. weather maps stop at the U.S./Canadian border like Canada does not exist. The 10 Percent Rule applies to Canada as compared to the U.S.: the Canadian population is 10% of the U.S. population; the Canadian economy is 10% of the U.S. economy; and farm and ranch numbers and agriculture are about 10% of U.S. agriculture....More
Apr. 30, 2012

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Corn and Soybean Digest

Think Like a Grower: Syngenta's Integrated Approach

Syngenta has unveiled a new strategy to "think like a grower," as part of a new integrated approach to doing business with farmers. By thinking like farmers, the company will be better able to develop integrated solutions to address growers' needs....More
Apr. 30, 2012

Article

Cutting Costs Takes Priority in Farm Bill Development

In the recent Senate Agriculture Committee action that resulted in the approval of a new farm bill proposal and referral to the full Senate for a floor vote, there were essentially no recorded comments about the cost of the five-year legislation. That is rather remarkable. Hundreds of billions of dollars are being spent, and no one talks about the entire cost of the legislation....More
Apr. 24, 2012

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How Much Working Capital Do Farmers Need?

The other day a producer asked me an interesting question. With all the emphasis on working capital and cash lately, how much should you keep on hand? First, we must ask some specific questions. In this case, the farmer indicated that he would need a $1 million operating line of credit to purchase inputs for his 1,400-acre farm. Next, discussion focused on the lender’s advance rate. In this case the lender would loan up to 70% of the value of the producer’s assets on inputs for the operation. The lender requires the borrower to come up with 30% to margin the loan....More
Apr. 24, 2012

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2012 Custom Farming Agreements

An alternative to leasing farmland is a custom farming agreement (CFA). In a typical CFA, the custom operator agrees to perform all the machine operations on the owner’s land in exchange for a set fee or rate. The landowner pays for all seed, fertilizer, chemicals, crop insurance and other input costs; receives the all grain produced and all eligible farm program payments on the land; and is responsible to store and market the grain....More
Apr. 17, 2012

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Interest Rates: What is Normal?

At a recent Executive Producer Roundtable summit in Spokane, WA, participants asked Ed Seifried and I the question, “What is a normal level of interest rates?” Today's agricultural producers and businesses have been managing their businesses through an extended period of low interest rates. For example, the prime rate has remained at 3.5% for nearly four years. With the Federal Reserve's statement that they would keep rates low through 2014, this would be an unprecedented period of low interest rates....More
Apr. 17, 2012

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Land Price Caution Warranted

The robust farm economy, particularly for crop producers, is having spillover effects through rural America, says Jason Henderson, vice president of the Federal Reserve Bank of Kansas City....More
Apr. 10, 2012

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Perspectives on Financial Liquidity

Over the years, many of you have heard me discuss the importance of financial liquidity. In the current times of extreme volatility and global uncertainty, the rules on liquidity have definitely changed. The other day during a videoconference with producers in six locations, Mike Hosterman, an AgChoice Farm Credit business consultant who has many years of experience working with ag customers, discussed a new twist on liquidity....More
Apr. 10, 2012

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Few Surprises in April 2012 Supply/Demand Report

The key points in Tuesday morning’s USDA monthly supply/demand update were the lack of adjustment to U.S. corn ending stocks and a slightly larger reduction in South American soybean production than the trade expected....More
Apr. 10, 2012

Article

Farmers Planting Corn, Soybeans Early Face Significant Risk Despite Record Warm Weather

This week The Climate Corporation released an outlook brief regarding the risks faced by growers who plant corn and soybeans early due to mild winter and spring weather conditions. The report leverages analyses by the Midwestern Regional Climate Center and the power of The Climate Corporation’s weather data platform to quantify the risk posed by early planting in the spring 2012 season....More
Apr. 10, 2012

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Recommendations to Safeguard Customer Funds Following MF Global Bankruptcy

The National Grain and Feed Association (NGFA) has issued its preliminary recommendations for safeguarding the sanctity of customer funds in the aftermath of the MF Global Inc. bankruptcy. "The demise of MF Global has shaken the confidence of many futures market participants concerning the safety of segregated customer funds," the NGFA said in recent letters to the Senate and House Agriculture Committees and the Commodity Futures Trading Commission (CFTC). "We believe these preliminary recommendations are essential to begin reestablishing confidence among futures market participants and to help safeguard customer funds."...More
Apr. 6, 2012

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IRS Grants Penalty Relief Due to MF Global Bankruptcy

In a March 22, 2012 blog, I suggested farmers consider making an estimated tax payment on Jan. 15 of each year as a way to extend their filing deadline to April 15 and still avoid the penalty for failing to make estimated payments. One example I gave for needing a post-March 1 filing was the late issuance of 1099 forms by MF Global trustees. Evidently, the IRS is aware of the problem and issued news release IR-2012-37 on March 23, 2012 to address the possible penalty problem....More
Apr. 3, 2012

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Insight on Rise in Interest Rates

The other day I was conducting a family business seminar for Farm Credit Services Southwest and American Ag Credit. A number of the participants were keen on understanding some of the early signals for a possible interest rate rise. Interest rates have been at a historical low for a long period of time. Not within my greatest imagination would I have predicted this economic trend five or 10 years ago. So what should we look for in a possible rise in rates?...More
Apr. 1, 2012

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Corn and Soybean Digest

Think Different: Input Addiction Aids Resistance

Are you a farmer who buys into the retailer/company/lender logic of adding more inputs to the spray tank, just in case insects or disease might be out there? Or are you fortunate to have a trusted source who scouts and openly discusses practices that can lead to weed, insect and disease resistance?...More
Apr. 1, 2012

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Corn and Soybean Digest

The Math of Land Buys

If only there was a guru to ask or an application to calculate whether to buy land at lofty prices. Any magic formula would certainly have to consider long-term prospects, the interest rate outlook and your current financial position....More
Apr. 1, 2012

Article

Corn and Soybean Digest

Africa: A Near-Death Experience

A farmer only has one chance a year to plant a crop, and we all want to make the best of it. The same is true for me in Ghana; but I do not have the selection of seed varieties, chemicals or fertilizers as the U.S., so I try to do the best with what I can access. Planning is key. In the U.S., you’re the customer with plenty of dealers competing for your business. In Ghana, we are operating one of only a few commercial farms producing corn so if you want something, you have to do it yourself....More
Apr. 1, 2012

Article

Corn and Soybean Digest

High-Rent Hangover | Have a Plan for $3.50 Corn, $8.50 Soybeans

All good things come to an end. To prepare for the eventual end of commodity grain glory days, your best move may be to run the numbers through available decision-making tools and evaluate options to reduce high-rent hangovers....More
Mar. 29, 2012

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Cash Holdings Continue To Rise

According to a recent Moody’s Investors Services report, U.S. corporate companies are sitting on a record high $1.24 trillion of cash. The Wall Street Journal reports cash and near cash holdings by U.S. nonfinancial firms increased from 9% of GDP in 2003 to 13.9% in 2011. Analysts suggest these increased holdings are partially a reaction to the financial crisis. Some companies are repairing their balance sheets. Although capital investments by corporations are increasing moderately, many companies have been cautious due to the economic outlook and regulatory uncertainty.
Mar. 27, 2012

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Enrollment Reminder for Direct and Counter-Cyclical Payments, Other FSA Programs

USDA Farm Service Agency (FSA) Administrator Bruce Nelson reminds farmers that the 2012 deadline to enroll in the Direct and Counter-Cyclical Payment (DCP) program is June 1. “I encourage all producers interested in DCP to visit the service center where their farm is administered and sign up before the busy planting season gets underway,” says Nelson. “Enrollments cannot be accepted after the deadline, so enrolling early may help producers avoid missing the deadline during one of the most demanding times of the year.”...More
Mar. 27, 2012

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The Curse of Wealth

The “curse of wealth” is attention getting; however, it describes an issue that is starting to impact agriculture, particularly in the islands of prosperity fueled by the nine-year super cycle that has been building tremendous appreciation of assets and retained profits on farm balance sheets....More
Mar. 21, 2012

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Legislation Proposes Reform Payment Limits for Federal Farm Programs

Sens. Chuck Grassley (R-IA) and Tim Johnson (D-SD) have introduced legislation designed to tighten payment limits on federal farm commodity programs and close loopholes mega-farms use to evade limits, while ensuring small and mid-size family farmers have the kind of support farm programs were designed to deliver....More
Mar. 20, 2012

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Returning to the Family Farm

I received an e-mail from a son who is contemplating the decision to return to the family farm. In this case, the son had graduated from a university with a degree in agribusiness. He is bright and has completed two successful internships with a cooperative and a business outside of agriculture....More