dealing with low commodity prices

I am a relatively new farmer, been making hay small scale for 4 years. 2 of those years, hay prices were very good, now this year not so much. I have about 200 round bales and 600 small squares to sell, clover and grass mixed with some timothy. I went to a hay auction today to scout prices. Hay similar to mine sold for $35-40/ a round bale and $2 for a small square. I was hoping to sell my rounds for $50+ and my small squares for $5 each. Looks like I'm gonna fall short. I feel I need to sell this hay, as it is taking up all my storage space, if I don't sell it, next years crop would have to sit outside. I'm gonna hold on for the time being, hoping prices inch up a bit in a couple monthes. as far as future years, I don't think the price of hay is gonna go up, lots of hay planted locally this year as many row crop acres went unplanted as we had a very wet spring here in Central MN. Many farmers planted hay in these acres this past summer. This will increase future supply for sure. This has me wanting to limit my hay acres.

Also, this year I will be putting in 50 acres of soybeans on newly acquired ground, this will be my first row crop experience. Prices are relatively low on beans too. I have limited storage for beans, I have 2 bins, each 1500 bu. but no air in either one. Probably would be best to just haul the beans into the Co-op at harvest. I haven't looked into bean storage at the Co-op yet, I may just take them there for storage, then sell when prices are better. Hopefully storage prices won't eat up the profit from waiting. Even if I store them there for a few monthes until the "harvest season" low price is past, then just sell them to the co-op at the then current price minus storage costs??

These are just my thoughts on dealing with low prices on these 2 specific commodities and my situation. How do you deal with lows in the markets?? Is my thinkinging logical?

Well the hay market can be fickle in a warm winter. IF you wait a few months those bales may not bring $10 each. There is plenty of hay nation wide this year. So the hay market price has came down.

Glover mixed grass will peak around the first of November and fall steadily until spring in a warm winter. In a cold winter the hay price usually peaks in mid to late February. That is when guys run short of their own hay.

When selling hay I found that some years you had better take a fair price over storing it until next year. Storing hay rarely pays.

As for you soybeans for next year. I would watch the cash sale contracts for fall. IF prices look good early then lock in a 1/4 of your estimated yield before planting is usually safe. Then you can do another 1/4 after planting. Then if the crops looks good and prices are over your cost of production then I would not be afraid to lock in another 1/4 after the pods start to fill.

I have only seen storing at the elevator work once or twice in my whole life. The up front Fee added to the monthly fees usually are higher than any price gains.

Thats about all you can do. We put our beans in little bins 1800 bu. Price Later some. Elevator charged .30 till Jan 15th. then I think .07 a month after that. So we put them in the bins and will take them out again for .30. or 90 dollars a load for us. Only thing don't have to wait in line in the fall. Seems can combine at least twice as much, going to the bin. So our thinking is to go to the elevator if can get unloaded in a timely manner, if not put them in a bin. Do corn the same way. We also sell some hay. Hay sales are going pretty good. Most of the round bales are spoken for. 25 per. picked up. End up delivering most. Charge trucking it varies. Sometimes have to haul unloading tractor. Still have a few small square Alfalfa bales left maybe 300. Excellent quality. selling it for 6.00. If get all the alfalfa sold will be better than 200 bu corn. SE Illinois Vic

I have been a small hay producer for nearly Thirty years. When I was getting started I went out and sold my product. I built up a market selling to some of the most finicky horse people. For many years my hay has been sold before I mow it. I go up a little every year but I don't go up a lot when the market goes up a lot. My advise is to think and work for the long term. I wouldn't expect first year hay off newly planted fields to impact the market a lot because my experience is that first year's cutting is not a lot compared to subsequent years.

Just another thought if it works for you. You can look into a delayed payment plan at your elevator which will put your income into the next year, if that helps. Take your loss tax-wise now. For many years I raised hay and baled it into small squares, which I stored on-farm. Some years if the summer had not been good for haymaking and winter got severe, I got super prices. But never good enough to warrant trying to sell year old hay the next winter. Try offering delivery or what ever to enhance hay pricing. Small squares should put you into the pleasure horse market where things like that help.

I can't help you on the soybeans. As far as selling hay, I have only seen hay very profitable 2 years ago during the bad drought. I've seen good net wrapped 4x5 bermuda grass hay sell for $30 and less this year. I'm considering buying all of my hay next year because I can get it delivered cheaper than I can bale it myself and I can pick and choose the quality. Sometimes that's hard to do when I bale my own.

A lot of what you saw planted into hay may just be a cover crop that was required to hold the weeds down on prevented planting acres.

Don"t worry about having no air in those bean bins.....combine at 13 or below moisture and they"ll keep fine into the next summer. Hauling them in at harvest, you"ll either be selling at likely the lowest price of the year, or paying excessive storage until you sell, plus you"re limiting yourself to selling them only to that co-op.

Like was said, soybeans do not need aeration if not harvested too wet. Never had a problem with beans stored in a steel bin with a concrete floor.

I agree with JD Seller on hay ,price it fair and move it, rather than store. I sell most right off the field, all round net wrapped. You need to look at your average price over a period of years. Hay has low in put cost , and easy to grow a decent crop. Beans and corn can be subject to many pit falls during the growing season that are not a risk with a hay crop. Hail and early frost just to name two.

With small hay acres you have to get in a niche like pure orchard,timothy,alfalfa,not a blend or orchard timothy blend maybe orchard alfalfa.I sell to horse folks and they will not feed clover or fescue.You need to put up a good bale top quality and hold your price push for max yield.Absolutely no weeds not any not even one top quality will sell,have new folks every year and old customers wont tell there friends were they get there hay because TOP QUALITY is hard to get anywhere.......!!!!!!

Sold my row crop farms a few years ago. Retired at 58. Bought 50 acres of nice hunting ground that joined my creek farm and now I just chase deer and turkey, and watch the sunrises, sunsets and stars.

No longer worry about prices.

But there are lots of things I miss about actively farming, and wouldn't trade most of it for anything.

Yall hang in there.

Gene

Welcome to farming! If it was easy, everybody would be doing it.

Have you ever thought about planting organic?
Organic corn is $11 to $12 a bushel
Organic soybeans are $24 a bushel

There are some rules that you have to follow, and get certified.
The main difference is that you cultivate, instead of spraying herbicides.

When prices are high, dang near anyone can make money farming. When margins are tight, yields are more important than ever. Trying to cut corners too far on inputs may just be what causes a farmer to lose money.

If I have extra hay come spring, I find it brings a better price then when there are most always some who are running short compared to fall when everyone is stocked up. Just what works for me.

The bins should work fine for you, usually beans here in Ohio get harvester at between 9 & 11% moisture, actually too dry that you loose in both lost weight and more shatter. 13% is considered good and safe for long term storage, Short term 13.5% even would do. You would just need a good way to fill the bins and then to load them out.

Where do you get $12 for corn and $24 for beans Just curious.

How do you determine the moisture content in your crops, (I'm not a Farmer), do you use some type of instrument?

Doc

Kind of hobby farmer here...Clark Co. Wi. I farm 120+ acres. Normal year 40 corn...35- 40 soybeans...20 - 25 oats..20 - 25 grass mix hay.Corn and beans go too local co-op or private Grain operations. Can store for .03/bu per month. I watch futures and sell usually forward month when price looks good.
Oats grain generally sold private too Amish ortoo 5 acre horseowners.
Hay made into small squares also too horse people...Amish , Mexicans and the mentioned 5 acre horse people. And oat straw too whoever.
People who I sell to cannot handle Round bales.I sell off the wagon [bale thrower] for minimum $2.00/bale. $2.50 and up if I put in barn.Right now getting $3.00 / bale on the limited amt. I have left.

John

All I can say is,these are the times when you only farm out of pig headed stubbornness to prove everybody wrong who said you won't make it.

Hmm, kind of funny when $4 corn and $10 beans are considered "Low Commodity Prices".

nm
tester

You can store grains at the coop unless they are specialty, aka. organic or waxy corn. I think we average better on the small squares than anything. It may be a local thing, but you seem really cheap on the small squares. We get $3.50 to $4.00 for them most of the time. The big round bales really vary on price.

What general part of Mo. are you retired in Gene?

I think when you are younger you always say next year will be better. When you get older you realize everything goes in a cycle.
This low price cycle might be longer than most other cycles. Go over to Agtalk.com. Look for the marketing forum. Look at some charts going back. Try to have or establish a good off farm income.
In my area a lot of large farmers are already trying to pencil out to exist for the next few years. Others are hoping for a drought in Brazil, China imports increasing, drought in Australia, Putin blocking exports,etc.

Yep. I'm not even that old and I remember cash corn bids with a "1" for the first number!

At least inputs were cheaper then.

evilboweivel:

Thanks !

:>)

(quoted from post at 11:20:53 12/29/14) Hmm, kind of funny when $4 corn and $10 beans are considered "Low Commodity Prices".

Click to expand...

Also kinda funny that I don't even flinch when I pay $320 a unit for seed corn! At least fertilizer came down. I paid over $700 a ton at one point. I'm not sure if I should stock up on diesel now, or wait to see how much lower it will go. It's still $3.30 a gallon for off-road, here.

Two things to remember when you're farming 1)When prices are high they'll always go lower 2)When prices are low they can always go a little lower.
Expect the worst and you won't be disappointed.