Time Marches On…

Teresa Olson
By Teresa Olson January 14, 2019 09:41

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Parkhill Ontario, Canada - October 5, 2006. A crop of Ontario soybeans just prior to harvest.

…And so do the trials and tribulations that plagued farmers in 2018, compounded by eroding financial conditions, a government shut down and falling commodity prices.  Brent Gloy and David Widmar, writing for  Successful Farming, offer 7 tips for 2019 farm management.  Here are the excerpts:

  1. Trade Policy: Producers should consider the probability of China removing the 25% tariff on U.S. soybeans before March 1, 2019, and consider what might happen if the talks succeed or stall.  It will be critical to think carefully about the risks and returns that could be generated under either scenario.

  2. Acreage:  Acreage decisions are the starting point for estimating annual production, so the acreage fever may be in overdrive this spring.  Consideration should be given to the winter wheat acres that were sown as an increase could alleviate some of the 2019 corn and soybean acres.  Given uncertainties around soybeans and trade, producers should think about their own 2019 planting decisions  based on different scenarios between the U.S. and China and a trade agreement.

  3. Higher Production Costs:  After several years of falling costs of production, some aspects of your budget could be higher in 2019.  Fall fertilizer prices have been indicative of this so producers should carefully examine their unique situation and consider things to proactively offset cost increases.

  4. $10 Soybeans in 2019?:  The November 2019 soybeans futures contract traded above $9.30 per bushel for the majority of November 2018, with primarily bearish commodity market news.  But what if bullish factors occur?  A lot of uncertainty remains for soybeans and all commodity prices in 2019 – key factors include trade, 2019 acreage, and 2019 yields.

  5. Another Year of Strong Yields?: At the national level, strong corn and soybean yields have caused harm to grain balance sheets and powered growing inventories, but before drawing any conclusions, it’s important to recognize that previous national yields  have limited impact on what will happen in 2019.  Producers should think critically about the projected yield they use for planning and budgeting and consider the probability of reaching those projected yields in 2019.

  6. Another Strong Year for the U.S. Economy?: While a strong U.S. economy is good news, it has created difficulties regarding new recruitment and retaining talented labor given low unemployment rates.  And while higher prices will raise the cost of borrowing money, it will also put downward pressure on asset values, including farmland.

  7. Will You Meet Your Financial Goals?:  What is the probability of your farm meeting its financial goals for 2019?  The first step is establishing these goals and documenting them.  Update your projections, as well as your expectations on a regular basis.

It’s not necessarily enjoyable to think about these subjects and their potential effect on your farm, but managers must consider tomorrow when making today’s decisions.

-Terry Olson, Titan Outlet Store Team

Reference:

https://www.agriculture.com/farm-management/business-planning/7-tips-for-2019-farm-management?cid=322692&did=322692-20190102&mid=17460310635&utm_campaign=todays-news_newsletter&utm_content=010219&utm_medium=email&utm_source=agriculture.com

 

Teresa Olson
By Teresa Olson January 14, 2019 09:41
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