Corn????

I watched a couple of the weekly farm shows this a.m. and I am just being nosey, but how many of you plan on upping your corn acres this year? According to the big shots they are predicting more corn acres than ever being planted. In reality with input costs being crazy I was wondering how it penciled out for you guys. As an organic farmer I can not make corn work for me at this time compared to beans and buckwheat after wheat.

We have been 2/3rds corn 1/3rd beans for awhile now and will continue this year. Our inputs are bought and paid for some time ago. Since that time things have went up quite a bit. I sold some corn for dec 11 last week for 5.84 1/2 off the farm. With the inputs locked in andw with corn at these prices rasiing corn has good potential to be profitable. The market will try to buy acres but no one knows where they will come from. Corn, beans, and cotton are all trying to buy acres. Going to be a wild ride. My market advisor says just to keep sitting on any old crop grain because the sky is the limit. We will see.
bill

i just read a report that elevators will be buying March corn but after that they most likely will not be buying and farmers will have a lot on hand if they havent sold yet. I am going to stay the same as usual and just plant corn in whatever soybean stubble and wheat stubble I have. Also I am keepiong an eye on this year for what will happen will hay acres. Im thinking that corn and soybean prices will have to push some hay ground out of production so I dont want to plow up any hay acres for corn as of the 2011 crop year.

I can appoach 200bu corn and struggle to make 40bu beans on my soil. So while I prefer a 50-50 rotation, I've been 2/3 - 1/3 for a few years. Due to tiling and rotation issues my feilds are set up that I might plant a few more beans, less corn than the last few years.

Chasing markets is fine in some years; but this year we are short on wheat, cotton, corn, and soybeans, so anything we as a mass shift to, will leave the others in even shorter supply.

Right now today you can pencil out corn better than beans, but next fall.....

Marketing ahead is fine, but I suffer with 80-1.10 cent basis so one doesn't really get the good prices if one sells ahead too much....

--->Paul

I'm not really set up to go big into corn. I gave that up a few years ago when I put all my eggs into the hay basket. It is tempting to get back in, but I think I'll pass.

Too many if's. Most of my corn now goes into a silo or silage bag for the neighbors milk cows. I may graze a little on occassion, but with inputs where they are I'm not terribly inclinded to try to graze 7 dollar corn. Ten to thirty acres a year keeps my alflafa rotation going. This year is a 10 acre year with corn slated to go in late after first cutting. I've got 10 acres coming out of second year corn going back into alfalfa.

Bill, for "discussion" sake, let me ask you what agricultural enterprse can afford the current prices for corn? Somewhere, sometime, we will find out the answer as the "price" will ration the demand. But at what price? I can't for the life of me think of ONE user of corn that can be profitable at the current prices, let alone any further appreciation in price.
AS a side note, never before in my life have I seen "agribusiness" so "opportunistic" in cashing in on the high grain prices. It's like they think it is their "obligation" to raise the input costs. "My" opinion is that ethanol is the root of the high grain prices. We the American people need to decide if we want food or energy. Having the american farmer provide both is NOT sustainable.

With a normal weather raising corn for feed and ethanol is sustainable.

We have had short corn crops 3 out of the last 4 years in the midwest.

Without ethanol we would still be setting on a mountain of unneeded corn and $1.75 per bushel corn. Gas would be $4.00 or more per gallon.

If we get a average crop across the midwest this year corn will be back in the $4.00 range.

So does the public want to pay high prices for food or gas.

Yes $6.00 plus is to high for corn. But watch what one good crop will do to that.

Just my opinion. Don't base your decisions on my opinion.

Gary

Here in central NY, with few exceptions, we don't have the "elevator" system you have out there in real grain country. So if you want to harvest on a timely basis, and be able to afford the drying, you had better do it yourself. Therefore my marketing "plan", if you will, has been to take a load of corn per week to a local independent mill. That generally has gotten me a good average, he appreciates a steady supply, and I actually have a cash flow!
I know the owner personally, see him most every week, and I come home with a check. He is old enough he will not operate at a loss for an extended period of time. He has before, and feels he doesn't have enough time to dig out of a hole, if ever. He and I both fear he won't survive the year. His balance sheet gets worse by the day. I blame it on the idiots running the country. As you say, we have to decide on fuel or food.
From my point of view, the income is wonderful, I've seen enough years when it wasn't. However the same idiots have made it virtually impossible to save this "fat" for the lean years. This years expenses are mostly covered already, and I have most of last years crops to sell. It's getting so much more expensive to operate so fast, that a future lean year is something I don't even want to think about!

I have come to the conclusion that I do not know anything any more, what I think is common sense is out the window. That being said this is what I think. Before I retired and was in the labor force the powers that be kept trying to run these college educated punks at us that had never held a wrench in their hand in their life but were constantly telling us how to do our jobs more efficently and save the company money. Most of the propoganda was nuts and their was no place for that kind of B.S. in a well tuned work place. Guess what, we are the retired old cogers now and these goons have taken our place in the food chain. With their vast knowledge of everything but sweat and a hard days work they have about run this country in the poor house. The idiots have not figured out that it takes a working man making good wages to buy the things that they most want to sell, that being new cars trucks, boats, fuel, or food
I so don't understand all of this speculation stuff on wall street, but I can not help but wonder where all this money was when I saw my lifes savings for my retirement go to he11 in a hand basket!

Maybe I'm missing something here Bob but why would he be operating at a loss.

Whatever he pays for the corn he would add his margin to it and pass it on to the customer.

Unless he is caught with bad accounts because of the high prices???

Gary

You guessed it. One of his small dairy customers sold out this week. More and more can't pay. Lots of ads- people trying to get rid of their horses,etc. They do quite a lot of bagged feed- that's what's keeping them going.
You've heard of Appalachia? Good part of NY is the northeast extension of it.

Well that is a complicated question and the answer is as well. You are right in that these prices are the markets way of rationing use. It has begun and will continue. I saw a comment from a long time market watcher and his comment was that the current supply of corn in the US had reached a point that was unbearable. That being said we can expect corn near term to go to all time highs but very little corn is available so very little is really bought. The ag community is very opptimistic right now, mostly because the US economy went down pretty bad while the ag economy crusied right along. Foreign demand is driving alot of this. The chinese have money and they dont have food, it is a problem for them and we are the solution. It is outside of my area of expertise but THEY claim ethanol plants are still profitable and large cattle feeders are making money because fed cattle prices are also are record prices currently.
Now, my opinion of high food prices is going to be much different than yours. Ethanol DOES take corn out of the system and convert it to fuel. What is not talked about is that the number one use of corn in this country is as animal feed. Even after corn is processed for ethanol, the byproduct is still used for cattle feed. If I recall, and feel free to correct me if I'm wrong, but about 75% of what goes into a ethanol plant comes back out as byproduct and goes to livestock as feed. AS A GENERAL RULE, most food items purchased at the supermarket have less cost associated with the raw ingredients than the package that its in, not all but most while it is safe to say all of them have more cost in advertising than raw materials. Loaf of bread, box of cereal, bag of chips have PENNIES of ag commodity cost. Watch the supermarket closely, when commodity prices fall, the price of the items will not fall, when commodities go up, they will increase and blame, farmers, ethanol, or the weather. Its good business to raise prices, bad policy to blame it on anything but cashing in.
A couple normal years and commodity prices will fall back, a long long way I'm afraid. In the meantime ag producers ride a long wave of uncertainty and as always, be caught in the middle.
This is the way I see it. I'm sure as a farmer my view is a little different. Silly as it sounds I wish everyone could spend a little time on a farm and see things the way those of us in production ag see it.
bill

Bill, I just want to throw this in, I have a good friend and he feeds about four hundred head of cows, a good size operation for my neck of the woods, he just bought a new mixer wagon to feed with. He told me he is going to feed the corn by product from ethanol and back off so much hay. He says he can get the grain cheaper than what it will cost to put up the hay that he has had to bale in the past couple of years.

IaGary, allow me to interject one reason he could be operating at a loss. In essence it's "operating capital". For example sake, he buys 1000 bu of corn at 5.00, (One year ago he was paying 3.40) so he now has to have an additional $1.60 available in order to buy this same bushel. Where does this additional $1.60 come from? His margin is (maybe) .15-.25 per bushel, so it's easy to see that he's NOT making enough margin to offset the additional cost. Let's say he sells this same $5.00 corn for $5.25. By the time he collects the accounts receivables, the cost has gone up another 25-30 cents per bushel. His original margin did not cover the increased cost of inventory. It just never stops. Then, heaven forbid, the market starts to fall. So he's now stuck with high priced inventory. He can't sell it and remain competitive, thus he incurrs a loss. I"ve owned an elevator and feed business and understand that "operating capital" can take you under. THe only time that any elevator or feed business makes (or has) any money is when they sell out. Hopefully, they've been able to collect their accounts receivable. I"ve been involved in agriculture my whole life. It has always bothered me that there is so much integration within agriculture. It's always one faction against the other. Then you throw in the farm subsidy issue, and it gets worse. Why is one segment of farming compensated while another isn't? 'LOt's of issues here that aren't going to be solved overnight. 'Enjoy your posts. RK

Yup you don't have tell me about operating capital.

What was about 400 an acre for inputs last year is 500 an acre for this year.

I also set on the board at our local Coop. Operating capital is a lot higher there as well for fert., fuel, seed and chemicals to keep our inventory up.

Can you imagine what it would be like if interest was 10%?

Gary

I don't farm for a living or income, all I want to ask is: How come you farmers ( the guys who do the hardest labor, have to worry about fert., fuel, electricity prices, weather etc.) can't just up YOUR prices because of a BAD or good year while the big boys(oil co. etc.) can change gas prices throughout the day? Did the remaining gas in their tanks in the ground suffer from blight, drought, bugs or disease?
And what is "capital gains"? If you sell a piece of equipment, an old truck or a pitch fork, that money is ALL yours regardless of any other issue. I just don't understand "business and progress". Sorry to stir up any dust- just wondering how we treat the American farmer. Again, I am not qualified to make the call. Just thought that if we had more people in this great country like my neighborhood farmers, we would have a lot less problems....... Those of you that get up at 5:00 am to get your chores done- my hat is off to you! Thank you for your dedication, blood , sweat and tears!