Spring 2015 Logan County
Farm Outlook Magazine

The year producers won the battle …
By Jim Youngquist

Send a link to a friend  Share

[March 28, 2015]  The 2014 Logan County harvest shattered all the previous records with an average corn yield of almost 231 bushels per acre and 63.7 bushels of soybeans per acre. Excellent weather combined with new seed varieties continue to push yields toward that magical 300 corn bushel number. With such amazing yields, Logan County farmers certainly won the battle.

But other producers across the country and across the world won the production battle too. When everyone is a winner, prices take a beating.

What does this mean? Even though the 2014 Logan County corn crop was 16.5% larger than the 2013 crop, here in the county it was worth $18.5 million dollars less than the 2013 crop. This means that Logan County farmers got less money for more bushels than they did in 2013 and much less than they got in 2012. Less dollars for more product might be an indicator that we are losing the war. Overall, this means there are $18.5 million dollars less in our local economy.

Even though corn is king, producers across the county seemed to make out better on soybeans this year than they did on corn. 2014 estimates range from $15 to $100 loss per acre on corn, and small gains on soybeans.



Since corn is hovering in that $3.50 - $4.00 range, producers across the world in such places as Ukraine and Brazil have continued to add corn and bean acres, thereby directly competing for export markets. With such competition, most of the Logan County production went to local markets in 2014: for ethanol and feed production. Growing foreign production and lower demand in consuming nations likely means more of the same for 2015. And these among other factors have sent pricing into a downward spiral.

Predictions for the 2015 production year include more acreage put into corn and bean production in this and competing countries, lowering or plateauing production levels of ethanol due to changing legislation, higher value of the American dollar, and continued limits on GMOs in the EU, Japan and China. These factors lead to the conclusion that we might have more of the same in the 2015 production year: higher production and lower prices.

With higher cash rents, obligations for machinery and buildings, calls for higher wages, wear and tear and maintenance, continued growth in technology, escalating cost of living, and less overall income, Logan County producers are feeling the squeeze and some are even upside-down. The only current uptick is that fuel prices are lower. Careful management of cash reserves from year-to-year can help balance the shortfalls, but other strategies for coping with dwindling income are needed.

[to top of second column]

Rick Harbarger, ag loan specialist from Town and Country Bank (formerly Logan County Bank) writes:

As agriculture faces landmark changes across the field, farmers are assessing not only their base acreage and crop insurance but also their overall position forward looking ahead of market adjustments. Adding to the uncertainty are the possibility of $3.50 corn coupled with the lack of a Renewable Fuels Standard – and the increasing likelihood that a new RFS would call for as much as 3 billion gallons less than in 2007. Cash position and liquidity are an important component of today’s successful farm income equation, and a strong, knowledgeable farm lending partner can play a huge role in keeping your budget right-side up.

Growers will start to feel a dwindling cash flow and many who are upside down on farm budgets may start dipping into their cash reserves to make ends meet. You can help soften that risk by working ahead of time to make adjustments, working closely with your lender to carefully scrutinize cash rents and input expenses. By giving your lender an in-depth understanding of your farm, how you run your business, and where your challenges lie, they are better able to help you adjust to the market and identify solutions to help grow your business. So, that by working together you can help keep your farm finances in shape.


In this edition of Farm Outlook, we take a look at strategies for reducing costs and raising incomes to cope with these challenging economic times. Because, as goes the farm, so goes the community.
 

 

Read all the articles in our new
Spring 2015 Logan County
Farm Outlook magazine

Title
CLICK ON TITLES TO GO TO PAGES
Page
2014 Year in Review 4
The year producers won the battle 7
How GMO regulations affect exports 9
GMOs and Biotechnology: Facts and Fiction 13
What are the impacts of last year? 16
Using corn storage as a hedge 20
Is fall tillage really necessary? 23
The cost of corn-on-corn 30
CASH RENT:  The Great Equalizer 34
Lowering your costs may increase your risks 37
Will lower fuels costs make farming profitable in 2015? 39
Mr. Allen and the Mount Pulaski FFA, a natural fit 40
Ag Scholarships 44
2014 County crop yields 52

< Recent features

Back to top