Thoughts From Commodity Classic

CropLife Editors Paul Schrimpf and Eric Sfiligoj attended the recent Commodity Classic conference in Nashville. In reviewing their experiences, they shared the following e-mail exchange after the event.

Paul: Some Commodity Classic, eh Eric? There sure were a lot of giddy farmers running around the convention center. And the amount of equipment was impressive, too. Most of the exhibitors seemed to be pretty happy, so that record farm income from last year must be getting reinvested in the farm this year. The National Association of Wheat Growers were giving away those hot cinnamon rolls, and I overheard someone saying that by the morning of the last day they had given away 6,000 rolls. Even taking out what I ate, that’s a lot of rolls.

What stuck in your mind from this year’s event? The lack of a definitive issue made it pretty unique for me … that one "something" on everyone’s mind. Every year there’s something that’s making people anxious. Not this year.

Eric: So true. There was plenty of optimism to go around for the most part.

However, there was one grower who spoke at the Bayer CropScience event who didn’t share this view just yet. When he was asked if he was enjoying all the extra income in 2007 from the high commodity prices, he said no. "Unfortunately, I sold my crops a few years out, so that I was still locked in at $3.80 per bushel for corn in 2007, not $5. So for me, the increase in commodity prices won’t come into play until after I harvest the 2008 crop. But then, it should be great to have some of that extra income."

Assuming this grower is not alone in selling his crops ahead a few years, we could see plenty of extra grower income coming into the industry long after commodity prices settle back down — if they ever do, that is.

Paul: That’s interesting. Growers are getting penalized for locking in early. That could be a significant risk, given their costs are going up as fast as the crop prices are. I guess it’s no wonder that the other thing I observed at the conference was the vast uncertainty about what growers are going to plant this year. In good times and bad, there’s a lot to consider and manage.

It’s hard to imagine crop prices coming down anytime soon. But then, it’s hard to imagine the price of anything coming down anytime soon. Chemical prices, fertilizer, seed, land … it’s all up.

Eric: Indeed. One of the growers speaking at the Bayer event mentioned that he had recently purchased anhydrous ammonia (NH3) for his farm at what he thought was a hefty price of $760 per ton. Then he talked with a neighboring grower who ended up buying his NH3 for more than $800 per ton for the 2007 spring season. By this fall, he speculated, the industry could see NH3 hitting the $1,000 mark, with urea not far behind in the $700 per ton range.

The other tidbit regarding prices and supply from the show was the fact that with all the uncertainty regarding planting plans, some seed suppliers are warning that certain popular types of soybean seeds could be in short supply this year. This could potentially keep corn acreage higher than normal for one more season before seed suppliers re-adjust their inventories accordingly.

Paul: Gives retailers plenty to talk to growers about, that’s for sure. Well, let’s get on with spring ….
 

Topics:

Leave a Reply

Management Stories

ManagementWashington Visit and Bayer/Monsanto Deal Update
May 26, 2016
Editors Paul Schrimpf and Eric Sfiligoj discusses a recent trip to DC and the latest news on the proposed pairing Read More
Crop InputsLand O’Lakes Announces Minnesota Water Quality Partnership
May 25, 2016
Governor Mark Dayton and Land O’Lakes, Inc. President and CEO Chris Policinski today announced a new public-private partnership to protect Read More
ManagementAgriculture 3.5: A Bumpy Road Ahead
May 24, 2016
You may have read my article a few years ago on Agriculture 3.0, which is a term I coined to Read More
Southern States Cooperative
Trending Articles
Eric SfiligojPity The Monsanto Haters
May 23, 2016
An old saying goes thus: “Be careful what you wish for. You just might get it.” Given current events, there Read More
Monsanto Luling Plant
Crop InputsReport: Bayer Eyeing Monsanto For Possible Mega-Merger
May 16, 2016
Bayer AG is exploring a potential bid for U.S. competitor Monsanto Co. in a deal that would create the world’s Read More
Aerial Drone
Precision AgA Deeper Dive Into The Future Of Precision Ag
May 9, 2016
For about two decades now, through the good and the bad times, the ups and the downs inherent in agriculture, Read More
Palmer amaranth in soybean stubble
HerbicidesWSSA: Billions In Potential Economic Losses From Uncontrolled Weeds
May 4, 2016
What losses would corn and soybean growers experience if they were forced to eliminate herbicides and other control techniques from Read More
Eric SfiligojReasons For Hope In Commodity Prices
May 2, 2016
For many months now, the doomsayers have ruled the day in agriculture. Too much supply with too little demand would Read More
Eric SfiligojMissing The Family Ties In Agriculture
April 25, 2016
By its nature, the agriculture market is cyclical. Up and down cycles come and go with a regular pattern. For Read More
Latest News
ManagementWashington Visit and Bayer/Monsanto Deal Update
May 26, 2016
Editors Paul Schrimpf and Eric Sfiligoj discusses a recent trip to DC and the latest news on the proposed pairing Read More
Fertilizer closeup in hand
Industry NewsVerdesian: Striking A Balance Between Yield & ROI
May 26, 2016
Finely tuned nutrient management plans are helping farmers throughout the U.S. improve nutrient use efficiency, increase return on investment (ROI) Read More
Crop InputsLand O’Lakes Announces Minnesota Water Quality Pa…
May 25, 2016
Governor Mark Dayton and Land O’Lakes, Inc. President and CEO Chris Policinski today announced a new public-private partnership to protect Read More
Soybean Plant closeup
Industry NewsMonsanto Rejects Bayer Bid; Open To More Talks
May 25, 2016
Monsanto Co, the world’s largest seed company, turned down Bayer AG’s $62 billion acquisition bid as “incomplete and financially inadequate” Read More
Corn close up
Crop InputsArysta LifeScience Establishes Global Headquarters In R…
May 25, 2016
Arysta LifeScience has announced plans to relocate its global headquarters from West Palm Beach, FL, to Cary, NC, over the Read More
fertilizer blending and storage, Top 100
BlendersCHS Dakota Expansion Features AGCO’s GSI InterSys…
May 25, 2016
The continued growth of precision agriculture has increased farmer use of customized fertilizer blends best-suited for their soil conditions. Several Read More
ManagementAgriculture 3.5: A Bumpy Road Ahead
May 24, 2016
You may have read my article a few years ago on Agriculture 3.0, which is a term I coined to Read More
Topcon’s X30 display with CropSpec sensors
EquipmentGPS Autosteer Systems: Product Updates From Precision A…
May 24, 2016
Throughout 2015 GPS Steering solutions continued to evolve from what was once an after-market add on, to today’s cab where Read More
Trimble TMX-2050 In-Cab Display
Eric SfiligojThe Precision Ag Revolution Continues
May 24, 2016
It’s funny how much “the first time” tends to mean to someone as they get older. I sometimes can’t recall Read More
Eric Wintemute, AMVAC
Precision AgAMVAC Ups The Ante With New Precision Ag Technology
May 24, 2016
A potentially industry-changing at-plant soil treatment system from American Vanguard Corp., or AMVAC, is coming soon to large growers in Read More
Dry and Liquid Plant
CropLife 100CropLife 100 Map
May 24, 2016
The new CropLife 100 map shows the locations of each of the headquarters of the 2015 CropLife 100 retailers. The interactive Read More
Southern States Cooperative
Corn Field
Industry NewsTiger-Sul Names Veteran Account Manager To Lead Central…
May 23, 2016
With the continuing growth of the sulphur bentonite and precision crop nutrient industry, global agriculture firm H.J. Baker has announced that Read More
Bayer sign
Industry NewsReuters: Bayer Defies Critics With $62 Billion Monsanto…
May 23, 2016
German drugs and crop chemicals group Bayer has offered to buy U.S. seeds company Monsanto for $62 billion in cash, Read More
Eric SfiligojPity The Monsanto Haters
May 23, 2016
An old saying goes thus: “Be careful what you wish for. You just might get it.” Given current events, there Read More
Industry NewsCompass Minerals Hires Industry Veteran To Lead Plant N…
May 19, 2016
Compass Minerals has hired plant nutrition industry veteran Vatren Jurin to steer the company’s portfolio expansion into specialty liquid micronutrient Read More
ASMARK Retailers LIVE! Tour 2016 Group shot The Andersons
CropLife 100The Andersons Rejects Unsolicited Proposal From HC2
May 19, 2016
The Andersons, Inc. has announced that its Board of Directors has rejected two non-binding, highly conditional, unsolicited proposals from HC2 Read More
glyphosate
Crop InputsWHO: Glyphosate ‘Unlikely’ To Cause Cancer
May 16, 2016
Via Reuters.com reporter Kate Kelland: The weed-killing pesticide glyphosate, made by Monsanto and widely used in agriculture and by gardeners, Read More