Fall Is Upon Us
Hello to all our customers and friends,
Fall harvest has treated most customers well with excellent production and in some cases, production high enough to offset the low prices. Hail in parts of our trade area did diminish yields potential but still allowed some bushels to be harvested. Unfortunately milo prices are not what they were last year with local prices falling anywhere from 10¢ to 30¢ a bushel below corn. Some milo yields however have been good with reports of over 100 bu/acre. Hopefully China will get back into the milo market and bolster the price. The newly planted wheat crop was graced with a phenomenal rain last week that covered a large part of the state, especially the wheat growing area. This should bring the crop up and let producers know where they need to replant.
On a positive note the cattle market rebounded with the same gusto it had declined with earlier. The fat market regained $18 / cwt in 25 days. That is about $235 for a 1300# steer. The feeder cattle market has also regained much of its value. Anyone that purchased cattle at the bottom of the drop may possibly make a little money if the fat market continues to go up. While the calf market did not drop as severely as the other market groups, they have strengthened also. There doesn’t seem to be any bargains in any of the classes of cattle. It seems the safest place to be at this time is in the cow/calf business. The bred heifer market seems to have been overdone as there are reports surfacing that sales of bred heifers have been softer than expected and high numbers of them available. In most cases it takes pasture acres to run cows and it is hard to find much of it available. The high grain prices encouraged many acres of grass, but marginal farm ground, to be converted to grain production. That seems to have been a short term scenario that may have long term repercussions.
The seed companies are trying to book sales for next year and one had the audacity to tell a customer, “We are holding our prices for next year”, as though it was a major accomplishment. In the meantime fertilizer continues to drop in price depending upon the product, anywhere from $60 to $90 per ton. There are many articles in Ag publications highlighting the appropriate rental rates for farm ground taking into consideration the drop in grain prices. While we saw some rental rates lowered last spring it was evidently not enough as there are also reports of farmers not renting land and turning it back because the rates make it unlikely to produce at a profit. There are going to be some tough decisions to be made in the near future.
Until next month, Myron