input prices

[jltrent]

Around here there use to be chicken houses, people milking cows, tobacco farmers and the producers went out of business mostly because of prices for the most part (government programs paid out to quit also.) It is looking more and more that the beef cattle are next as not a very good chance of a much producer price increase IMO.

I don't ever remember price increases (inflation) as bad as I have seen recently. Either the farmers get a bigger piece of the pie or a lot want weather the storm.

 

[Stocker Steve]

It's made pretty difficult by the fact that enough fentanyl to kill a million people could fit in your pockets. Nobody is loading shipping containers full of fentanyl.

All things are possible with control of the internet and facial recognition and AI and...

 

[Stocker Steve]

December and January are when the I states publish their sample budgets for corn and beans. The initial ones projected high productivity farms still showing a profit even with higher input prices. Lower productivity farms did not. Then grain prices went up some more. So in 2022 some of the dirt surfers will need to accept a lower return to land and labor, and many will actually be able to cover all the overhead - - thus being "profitable."

The choices for lower productivity dirt farms will be challenging:
- negotiate a big reduction in land rent
- convert to sod for welfare cows
- transition to organic
- sign up for CRP
- return to a version of lay farming to grow your own fertilizer. I am going with the grow your own for this year.
- more biology patents
-

Most of these options will reduce the US grain production, but there is still a lot of rain forest left to slash and burn. We can print more money to buy more imported burger for now. Climate and conservation policies are the longer-term wild cards.

 

[Stocker Steve]

I can see a world wide food shortage coming up as farmers elect to grow crops with low imputs and just take the cut in yield. Graziers will just reduce the stocking rate. China, the country that is trying to manipulate the markets is the one that is going find a shortfall in what is available to buy to feed its population.

Ken

China is investing heavily in South America and Africa. Lots and lots of undeveloped land there to mine out before there is a food shortage.

How is Australia faring with its old, weathered soils?

 

[wbvs58]

China is investing heavily in South America and Africa. Lots and lots of undeveloped land there to mine out before there is a food shortage.

How is Australia faring with its old, weathered soils?

The next few months will be interesting to see how much winter grain crops get put in. I think the marginal country where there is greater risk getting a harvest will be back a lot but people will spend what is needed on the better quality land where a harvest is more reliable. I think there will be a big uptake of satellite and drone technology to map out variable rates of fertiliser. With grazing a lot of our northern country where big properties are and big numbers of cattle it is basically zero imputs on the land but they still have to deal with escalating freight costs and labour shortage in processing plants and then lack of refrigerated shipping containers. The smaller blocks to the south have relied on heavy topdressing of "super phosphate" to top up the depleted P & S over many decades which gets the clovers going to fix N for better pasture growth. I think that many will hope that the past history of super fertiliser over many years will tie them over until things become more cost effective. Many are looking at "Regenerative Practices" where if you don't fertilise things will take care of themselves so to speak and then there is "Carbon Farming", all terminolgy that to my thinking goes round and round in circles. I read a column each week in a rural newspaper by a well respected agronomist and research trials that he quotes from colleagues in central NSW say that to get significant carbon/organic matter sequestration you need to be consistent applying your inputs of fertiliser. I think a lot of people like the name regenerative as they think it means stop spending any money on inputs and your paddocks are going to zoom ahead by themselves.
In my short time (15 years) farming I quickly learnt you never get anything for free. A good season and you will have a lot of weeds to deal with, buffalo fly and along with that Ephemeral Fever (3 Day Sickness), water logging and it goes on.
I recently joined a Regenerative Agriculture group on facebook and so far have been a bit disappointed, seems to be more of a front for a permaculture group with people sprouting their magic potients etc.

Ken

 

[Stocker Steve]

I think a lot of people like the name regenerative as they think it means stop spending any money on inputs and your paddocks are going to zoom ahead by themselves.
In my short time (15 years) farming I quickly learnt you never get anything for free. A good season and you will have a lot of weeds to deal with, buffalo fly and along with that Ephemeral Fever (3 Dasy Sickness), water logging and it goes on.
I recently joined a Regenerative Agriculture group on facebook and so far have been a bit disappointed, seems to be more of a front for a permaculture group with people sprouting their magic potients etc.

Ken

Hard to beat magic. I tried to buy some yellow maize corn that fixed N from the air, but the seedman said they were still working on it... So I had to settle for alfalfa and clover seed.

Grazing consultants here have common message that you need to start with good genetics and get a premium market price. Hard to argue with advice like that. Just hope you did not overpay for it. In-between those bookends there is a lot of variation. The two main schools of thought focus on higher grazing density to trample more and juice up the biology or focus lower stocking density to match up with your wintering capacity. Drought forced me to make some adjustments in both areas.

 

[Stocker Steve]

Our local auction yesterday sold grass cow hay for U$S 190 per ton. That will end up making some expensive cow pies regardless of how you feed it. I had to ask WWDD - - what would Dave do?

 

[BFE]

December and January are when the I states publish their sample budgets for corn and beans. The initial ones projected high productivity farms still showing a profit even with higher input prices. Lower productivity farms did not. Then grain prices went up some more. So in 2022 some of the dirt surfers will need to accept a lower return to land and labor, and many will actually be able to cover all the overhead - - thus being "profitable."

The choices for lower productivity dirt farms will be challenging:
- negotiate a big reduction in land rent
- convert to sod for welfare cows
- transition to organic
- sign up for CRP
- return to a version of lay farming to grow your own fertilizer. I am going with the grow your own for this year.
- more biology patents
-

Most of these options will reduce the US grain production, but there is still a lot of rain forest left to slash and burn. We can print more money to buy more imported burger for now. Climate and conservation policies are the longer-term wild cards.

Rents are going up here. 1200 acres 8 miles away went for $300. Decent ground but not prime bottom ground.

Ground that was in CRP for 25 years, been farmed for the last five 2 miles away brought $200. The previous farmer, who's a mid sized producer walked away at that price. I farm right next to it. After talking, my yields and his were basically identical the last few years. At $200 rent, a bumper crop is needed to make the bills.

 

[Stocker Steve]

At $200 rent, a bumper crop is needed to make the bills.

A lot of government subsides flow into land and land rent pricing. Some grain guys are willing to rent on a cash flow basis, and many are thrilled with a U$S 50 profit per acre once in a while. Input marketers know this and price accordingly.

Land rent here runs mostly $35 to $80 per acre. Because your per acre input costs are spread over a much lower yield than in the I states, the grain profit per acre is less than with $300 land rent.

A way to break out of this marginal land death spiral is to learn how to manage a seasonal herd, but this is too much for most. A more typical approach is to try to run will almost zero machinery expense - - a line of paid off equipment with a few parts machines in the tree line. Seems to work for a while...

 

[J+ Cattle]

Many of the inputs are controlled by Global companies and they control the selling price and adjust the prices according to the country that is buying it. The US always has the highest price for these inputs, the Global companies make their profit here and the other countries cover their overhead costs. Coops should shop inputs from Mexico or South America and import them for half the price to make US farmers more competitive.

 

[BFE]

A lot of government subsides flow into land and land rent pricing. Some grain guys are willing to rent on a cash flow basis, and many are thrilled with a U$S 50 profit per acre once in a while. Input marketers know this and price accordingly.

Land rent here runs mostly $35 to $80 per acre. Because your per acre input costs are spread over a much lower yield than in the I states, the grain profit per acre is less than with $300 land rent.

A way to break out of this marginal land death spiral is to learn how to manage a seasonal herd, but this is too much for most. A more typical approach is to try to run will almost zero machinery expense - - a line of paid off equipment with a few parts machines in the tree line. Seems to work for a while...

What is the average yield on this $35-80 ground? corn and soybean.

 

[Stocker Steve]

We had a 50 year drought in 2021. Beans ran zero to 20 bu and corn ran zero to 65 bu. I grazed out my beans. Almost all the corn went for silage.

Last official average state data I have is from 2019 which was a wet year - - 37.1 bu for beans and 156.7 bu for corn. They show $93 to 120 land rent cost

I would say that the immediate area with the $ 35 to 80 land rent is more like 30 bu beans and 140 bu corn.

 

[Lee VanRoss]

Stocker Steve> Are conditions right and is there a market for Canola or flax or any of the brassica's which could possibly
used for rotational grazing? Good luck in 22. LVR

 

[Dave]

Our local auction yesterday sold grass cow hay for U$S 190 per ton. That will end up making some expensive cow pies regardless of how you feed it. I had to ask WWDD - - what would Dave do?

Hold the hay and buy thin cattle about a month before grass. I counted hay in the stack and figured I had enough for 45 if I start feeding February 1. Of course I can't magically get 45 cows on February so plan A is start buying January 20. There is a rented pasture where the landowner wants cows gone by Sept 1. That only for one and done cows. This is certainly not stocker pasture. Good younger cows would need some where to go on September 1. So I am still going with paying one bid over kill price. Kill prices are kind of high now. But I wouldn't expect them to drop by August when cows going to kill are at a low point. I am not relying on the bred cow specials either. They attract too many buyers looking to buy bred cows. Not fond of feeder calf special sales either. That puts me buying bred cows at mid night. On the other hand I get good buys then.
We have plenty of snow in the hills. So irrigation water is going to be good this summer. The rangeland pastures depend on a good rain in April/May. But it is like that every year. Here we are one good rain away from a drought every year. Plenty of fall rain and snow for the early grass. After that it is a crap shoot every year.

 

[Stocker Steve]

Hold the hay and buy thin cattle about a month before grass. I counted hay in the stack and figured I had enough for 45 if I start feeding February 1. Of course I can't magically get 45 cows on February so plan A is start buying January 20. There is a rented pasture where the landowner wants cows gone by Sept 1. That only for one and done cows. This is certainly not stocker pasture. Good younger cows would need some where to go on September 1. So I am still going with paying one bid over kill price.

Sounds good, but how many others are working the same plan?

There seem to be a lot more traders here, and less big cattlemen, than in the west.

 

[Stocker Steve]

Stocker Steve> Are conditions right and is there a market for Canola or flax or any of the brassica's which could possibly used for rotational grazing?

I use rape and hybrid turnips in some fall mixes, along with peas and oats.
Good yields require August rains, which are not consistent this far west.

 

[BFE]

We had a 50 year drought in 2021. Beans ran zero to 20 bu and corn ran zero to 65 bu. I grazed out my beans. Almost all the corn went for silage.

Last official average state data I have is from 2019 which was a wet year - - 37.1 bu for beans and 156.7 bu for corn. They show $93 to 120 land rent cost

I would say that the immediate area with the $ 35 to 80 land rent is more like 30 bu beans and 140 bu corn.

That $200 ground and mine that joins it had 51-52 bushel beans in 20 and 21. Corn was 140-145. That was mine and the neighbor who walked away from it. Both were average to above average years in our area.

I'd take your rents and yields. We raise bigger crops on good years than you it appears, especially beans, but we pay a heck of a lot more rent. Our corn averages are not much different.

Last year some prime for our area bottom ground topped $400. It's not like central Illinois, but real good.

I'd rent every inch I could get for $35-80!

 

[Stocker Steve]

I'd rent every inch I could get for $35-80!

I agree that rent is too high in many places. Here we have two common local issues:

1) Too many deer in places. Free rent might be too much. Deer can take all the beans and 1/3 of the corn. I pulled the last bales off the edge of a 17 acre hay field today and there were 39 deer on it.

2) A history of mining shallow soils that resulting in single digit P levels and double-digit K levels and ph that starts with a 5. Need a long-term lease and turkey litter...

 

[gcreekrch]

This will thin the herd, including farmers. Food prices will continue to climb. How did things get so out of whack in such a short time?

Can we say DemocRats

 

[Dave]

This will thin the herd, including farmers. Food prices will continue to climb. How did things get so out of whack in such a short time?

I have been saying for years that this country is being built like a house of card. Something some day is going to cause it to crumble. We are as close to that day now as we have ever been.