2016 Spring Farm Outlook

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2016 Logan County Farm Outlook Magazine Lincoln Daily March 24, 2016 23
won’t be in the business in the next two years if prices
fail to return to profitable levels.
Prices at fertilizer dealers continue to plunge, making
daily adjustments. Buying ahead means you will
likely pay more. Most farmers will buy their fertilizer
elements in a “just-in-time” fashion which is contrary
to how they both are accustomed to doing business.
Fuel prices are currently much cheaper, but it may be
a double-sided sword. While it will cost much less
to put the crop in the field and operate machinery, the
industry is fearful that the U.S. congress will look
at cheaper fuel prices and say, “Why do we need the
ethanol mandate when we have such cheap gasoline?”
Gutting the ethanol industry will likely lower corn
prices currently hovering in the mid $3 (about $3.55
a bushel at the time of writing) range by about $.75 a
bushel. That would be very destructive to the entire ag
industry.
When asked what would cure the problem, producer
Tim Gottschalk who farms near Armington, said that
returning to $4 a bushel corn and learning new ways
to produce crops at lower prices would help return to
profitability.
According to a Reuters story on March 8, 2016, corn
prices recently edged up because a Department of
Agriculture report said that some corn and soybean
traders were worrying about the weather: A late spring
freeze in the Great Plains, pockets of dry conditions
in the southwest Plains, and problems with too much
rainfall and flooding in parts of the Delta. But “the
weather-fueled gains will likely be short-lived, with
a return to $4 a bushel in corn looking “like a million
miles away,” said Kevin Van Trump, president of
Missouri-based consultancy Farm Direction.
Meanwhile, producers and the entire ag industry
continue to languish.
By Jim Youngquist
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