Summer Is Here?
Hello to all our customers and friends,
The moisture we have been waiting and praying for has been arriving over much of the area. Rain has been coming from all directions and while runoff out west is still limited, from Manhattan and further east ponds are full and grass is green.
The commodity markets showed some improvement although in some instances the gains were short-lived as the wheat market rallied at $.48 and dropped to $.35 in two days for a present gain of $.13 for the month. Corn is up 14¢ and soybeans are up 37¢ per bushel for the month. The feeder cattle are up $6 per cwt and fat cattle are up $3 for the month. Calf markets have been steady at the sale barns and in some cases the lightweight calves were $2 higher than 30 days ago. Cow prices have strengthened with the rain and greening of dry pastures, although the moisture can shut off just as fast as it came on. I did notice today that it felt like I was standing in a greenhouse more reminiscent of humidity levels farther east of here. This is also shaping up to be a very challenging summer to put up hay. The wheat crop has regained a little vigor although some acres were destroyed and will likely be planted to milo or soybeans. The recent moisture has at least shed a glimmer of hope for fall crops. That being the case, corn that was planted is suffering from too much cool weather and not enough sunlight. This happened last year and a good crop was still raised once summer weather kicked in.
Land sales in our area seem to be holding their own though we tend to be behind the market when compared to Iowa, Illinois and Indiana. In other words, they go up in price faster than we do and they have started to decline a little by most regional reports. I do think the really low corn and wheat prices are going to affect land prices in the future. As I have alluded to in earlier newsletters, the input costs are way out of line for what the production potential is; cutting costs and being more efficient are the only ways to survive these challenges. It may be that fertilizer, seed and chemicals will be the real factors in reducing land prices as the corporate world shows no sign of realizing how production agriculture is faring right now. DTN, the agricultural news network, and The Wall Street Journal have had several stories about weak prices and both seemed to point most references to how ag lenders are aware of potential shortfalls after this fall harvest.
Now that Memorial Day has past, summer has officially started, but I would not have wanted to jump into any of the outdoor pools last weekend. Until next month, Myron