USA farmers are Tightening Belts!

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USA farmers are Tightening Belts!

SASKFARMER3's Avatar Apr 9, 2015 | 06:33 1 In Canada it seems maybe some actually are. In our area its a gimmy. No one is going to piss around trying to seed shit that will flood is flooded or muddy etc. Its seed what you can and quit. No extras are going to happen this year. All experiments are off.
Our costs are up 7% over last year according to Stats can. Seems the big boys who control see and fert and chem don't give a shit about the ones that buy their product.
But the funny thing about the article is USA guys are hunkering down and hunkering down hard.
Makes you wonder then how tight are budgets in Alberta, Sask, and Manitoba.

Bracing for their leanest season in eight years, U.S. farmers are skimping on everything from machinery to fertilizers, betting that they can go down-market and yet maintain crop production and quality.

The belt-tightening has already squeezed sales of suppliers, and farming experts warn the gamble can backfire: less robust crop protection and less resilient seeds combined with some rough weather could hurt crops this year and beyond.

Jon Sparks, who farms 1,400 acres in eastern Indiana, is scrambling to cut costs wherever he can: buying cheaper seeds, using less fertilizer, and hoping his farm equipment will not break down this year.

Sparks is not alone as farmers nationwide are scrutinizing every expense. After four years of bumper crops and earnings, grain prices are plummeting and the U.S. Department of Agriculture forecasts this growing season to be the least profitable since 2007.
Across the nation's Midwestern corn belt, new farm equipment sales are down, seed salesmen from Monsanto and DuPont Pioneer talk of a slump in business and fertilizer suppliers Mosaic and Potash Corp are reporting lower sales volumes for some products.

How such cutbacks, which have intensified since last autumn's record harvest, will affect grain production is not yet clear, but the risks are considerable.

Right now, weather forecasts are largely favorable for U.S. grains this summer.

Yet as any forecasts, they come with a degree of uncertainty. If the weather turns foul, say agronomists, corn and soybean yields could drop 20 percent or more if growers skip disease or insect treatments to save money.

The United States is the world's top soybeans and corn producer and a major exporter, so any dent in output would ripple through global markets. It could also hurt U.S. cattle and hog producers, who use corn and soybeans as feed.

"Whether it is new equipment, fertilizer or other inputs such as fungicide, growers are reevaluating every one of those decisions this year, probably at a higher level than they have in the past," Tom Eickhoff, corn agronomic systems lead for Monsanto, one of the biggest seed makers, told Reuters.

EARNINGS HIT

It is too early to gauge how deep the farm spending cuts are, but the squeeze to suppliers' profits and sales gives some sense of the scale of the belt-tightening.

Deere & Co, the world's largest farm equipment maker, reported a 43 percent drop in profit in its first quarter to Jan. 31 and has already laid off 1,500 plant workers in Iowa, Illinois and Kansas, and furloughed another 500.

New equipment is "a convenience more than a necessity right now," said Sparks.

Other cuts involve some risk-taking. Sparks is planting corn seed without genetic resistance to rootworms in some of his fields this year because they lie outside the "hot zone" for the pest the USDA estimates causes $800 million of losses each year.

Monsanto last week reported a 10 percent drop in seed sales in its second quarter to Feb. 28, with corn seed sales, its biggest revenue generator, down 15 percent.

A March 31 USDA report confirmed that U.S. farmers are planning to devote the least acres to corn in five years this season, switching to cheaper soybeans that require less fertilizer. (Graphic: reut.rs/1bPbDUN)

Meanwhile, more farmers than usual are passing on Monsanto's newly launched, and most expensive, corn hybrids in favor of slightly older and cheaper ones, the company said.

In response the biotech giant is cutting its seed production plans. Company officials told Reuters their contracted farmers will plant less seed corn this summer for use in the 2016 season, but declined to discuss the matter in detail.

DuPont Pioneer, which reports quarterly results later this month, said the shift away from corn planting is hurting demand for some of its bug-battling hybrids, but offered no further details on seed sales.

BALANCING ACT

Choices made today will affect farmers until next season as they are trying to strike a balance between costs and crop quality and protection.

Planting a less resilient seed or too much of a single variety can amplify crop losses if there is a spell of poor weather, or an insect or disease outbreak. Skimping on fertilizer saves money, but also can reduce crop yields.

Still, Brian Duncan, who farms in Polo, Illinois, said he will forego spraying his corn crop with fungicide and supplemental insecticide.

Instead, he will rely on the built-in bug protection in his biotech corn seed, bought from a single company to get a bulk discount. If applied on all of the corn fields of his 3,900-acre farm, the strategy could save him as much as $35 an acre, or up to $123,000.

Many shun the new and embrace the old.

Southwest Indiana farmer Don Villwock is putting off a trial of DuPont Pioneer's latest data-science advisory service this season, a $12-an-acre subscription, and will instead rely on his local agronomist for guidance, paying $8 an acre.

He is also tuning up his three-year-old corn planter instead of trading it in for a new. Villwock also skipped a trip to the annual Louisville Farm Show showcasing shiny new machinery for the first time in a decade. "I figured it's best not to be tempted so I stayed home.

I for one don't believe the Bull shit that the world is out of food crowd.
It was said in the 30s 70s and now again in 2012. Its was bullshit ever other time.
The world would rather fight a war and clean out a couple 100 million people before it pays farmers for what their worth.
Grain companies and Railways show that Canada cant handle a big crop.
Ritz and company studied the situation and all is good now since last years crop was not as good.
IF Canada achieves a decent to above crop in 2015 watch and learn we will see same thing repeated again.
When Industry wont change only one group will get hurt and that's us farmers.
So from all the sales so far this spring I would say most Canadian farmers are cutting costs and hunkering down like our USA farmers.
What are others thoughts. Reply With Quote
Apr 9, 2015 | 06:48 2 You should try some of that legal rr1 brown bag soy seed. You could bypass the seed fert and chem companies altogether. Reply With Quote
farmaholic's Avatar Apr 9, 2015 | 06:57 3 Depends how big your "cushion" is and how hard the landing. Those with less of a cushion may have an inclination to try to reduce the impact, others may still swing for the fences... Reply With Quote
SASKFARMER3's Avatar Apr 9, 2015 | 07:01 4 I just find it funny how some don't get their is a shit show happening with farming and were all in it.
Prices are decent if you have been cutting costs and not in the Give it every thing crowd. But one thing I have learnt is after 8 years of floods you realize that the Support programs don't work. If they did their wouldn't be as many farm sales in the flood zone as their are this spring. Costs can only keep going up if farmers, yes farmers stop feeding the fire. Order all the seed a guy wants but then drop it back off in end of may.
Costs are out of control. No tractor or drill is worth 500000.00 to 608,000.00 for a drill.
Really add from local paper.
Fert is out of control and yes the typical dollar is down so were priced in USA dollars even if the shit comes from 60 miles away and not the gulf.
The whole Ag industry is based on BULL shit and guess what it works. Marketing at its best, Create shortages because we can, Tell the consumer its that way because we can.
Farmers your the ones that control the profit and loss at all who take from us.
Maybe the USA guys realize that the shit show has gotten out of control.
Why shoot for 60 plus wheat only to get 40 after it floods or is down graded even if you put fungicides etc. Why shoot for the moon.
Its maybe a year to throw it in neutral and just enjoy the awesome Sask, man, and Alberta summers. Reply With Quote
SASKFARMER3's Avatar Apr 9, 2015 | 07:06 5 I guess on that your right some will swing for the fences believing the hype that the last 8 years weather is normal and they never ever get bad weather conditions.
Hell I will be the first to tell you that back in the 80s when we had some of the best producing years out our way I use to think we were a sure crop area. Good snow cover then the right 4 rains and off to put up more bins. But wow did the last 8 take me down a notch. Shit happens and its totally out of your control.
Best advise plan for a 40 if you get 60 enjoy and if you get 20 at least you didn't budget for 60. So your loss is way less.
Mother nature still deals the cards. Just saying the going for broke usually has one outcome.
Off to sit in Line.
Ah farming! Reply With Quote
Apr 9, 2015 | 07:07 6 Am sure SF has been through this type of situation before.
Devalued Canada dollar good in short term for indebted grain growers, not good longer term for most of us.
Other export dependent producers, oil and resources etc, are in similar situation.
One thing growers control is land costs. Might be a place to start. Reply With Quote
Apr 9, 2015 | 07:40 7 Talking to my accountant yesterday when I was picking up my income tax, her estimate was 85% of her clients are in a cash flow shortage.
She does many Agristability files and says it's very hard to trigger anything. Only very few with a single bad year seem to qualify. Us guys in the reverse scenario of a single good year because that year the rains slowed down have had our reference margins decline, we won't be getting anything.
Crop insurance canola was $12 in 2013, in 2014 when I have a claim there paying $9.
Her understanding is money was diverted from Agristabilty to other growing forward programs because ag was looking like it didn't require the funds, this was done by making it impossible to trigger.
Your right saskfarmer , these programs have no value to them,
Could save a bunch of money by shutting the offices down and laying off the staff. There not doing anything , Reply With Quote
Apr 9, 2015 | 08:02 8 It appears that one thing the seed companies in the US don't mention is lowering the price of their seed to attract sales they only decide to plant less for the next year. I remember reading that seed prices in the US were up again this year but had increased less than the previous 2 years due to lower commodity prices, it is amazing how seed companies on both sides of the border don't give a shit if their price is justified by market conditions.
Sf3, Ritchie sale in Melville, is that the market price for land in the area or was it high or low. Much more affordable than here in central alberta. Reply With Quote
SASKFARMER3's Avatar Apr 9, 2015 | 08:16 9 That's the epicenter of the floods! Real estate thinking like the first quarter. Farmers thinking like the last. Can't buy when crops suck. Reality to much water and no real support. Just a heads up to those who think that if the droughts come back their covered. Ha ha ha ha.
Reality of water. Reply With Quote
farmaholic's Avatar Apr 9, 2015 | 09:33 10 Agreed, Agristupidity has had the nuts cut out of it. It is pretty much useless.

The staff at the offices that process the applications are still providing a valuable service to government, they are collecting and processing VALUABLE data. Reply With Quote
farmaholic's Avatar Apr 9, 2015 | 09:42 11 Hamloc....The money got diverted to, "Science, Innovation, and Technology" so "WE" can all benefit. Through things like plant breeders rights, right? Excuse the sarcasm this morning... Reply With Quote
farmaholic's Avatar Apr 9, 2015 | 09:46 12 Sorry Hamloc, my last post was intended for GOODRUM. Reply With Quote
Apr 9, 2015 | 10:05 13 I guess 85% of us with cash flow problems should be grateful for our governments vision and protection of plant breeders rights , those guys would be in tuff shape without government support Reply With Quote
farmaholic's Avatar Apr 9, 2015 | 12:00 14 I wonder what percent of farmers file an agristability/agriinvest application? Unless you're into fudging numbers, lots of info in the apps... Reply With Quote
farmaholic's Avatar Apr 9, 2015 | 12:09 15 I wonder what percent of farmers file an agristability/agriinvest application? Unless you're into fudging numbers, lots of info in the apps... Reply With Quote
Apr 9, 2015 | 12:23 16 Farmaholic , what are you saying? Reply With Quote
farmaholic's Avatar Apr 9, 2015 | 12:33 17 ....that maybe not everyone is _______. I I've heard of people storing grain at other people's places. Inventory and production shortfalls.

Wonder how Broadacre made out... Reply With Quote
Apr 9, 2015 | 13:40 18 Gotcha , yea that would be the only way I can see actually getting anything , too bad Reply With Quote
Apr 10, 2015 | 22:43 19 Those poor American farmers my only be able to buy the $25,000 drone instead of the $30,000 drone . Kinda like some Canadian farmers that may only be able to do 4 winter holidays than 5 .
Sorry , but these are the guys the piss and moan the most . Reply With Quote
Apr 11, 2015 | 07:34 20 Hard to get a handle on amount of grain still on farms.
After last year, do not see open piles but do see some tarp covered temporary storage.
Own farm down a bit, confident we will empty by new crop.
Made mistakes in past years by cutting back on production at times of surplus and lower prices, will be at least another year before we plan that again. Reply With Quote