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
ManagementMACA 2014: The State Of The Agricultural Industry, And Then Some
October 9, 2014
The trade association’s annual gathering featured speakers from across agriculture and beyond. Read More
StewardshipA Multi-Layered Approach To Water Quality
October 6, 2014
Illinois event highlights research and technology designed to better monitor and improve water quality — and the benefits of cooperative, coordinated effort. Read More
StewardshipMichigan Agriculture Leaders On Toledo Water Ban: We Want To Be Part Of The Conversation
August 8, 2014
Leaders of Michigan agricultural organizations said Thursday that the government should not have a “knee-jerk reaction” based on last weekend’s water ban in Toledo due to fertilizer run-off in Lake Erie. Read More
ManagementRussia Bans U.S. And EU Ag Product Imports In Ukraine Sanctions Battle
August 7, 2014
Russian President Vladimir Putin has banned the import of agricultural goods from countries that have imposed sanctions on Russia. Read More
Top 100 Articles
CropLife 100Pinnacle Agriculture Acquires Minnesota Retailer
April 14, 2015
Pinnacle Agriculture Holdings, LLC, ranked No. 6 on the CropLife 100,  has successfully acquired Liebl Ag, LLC in Ada, MN.  Read More
CropLife 100CHS, Aurora Cooperative Complete Fertilizer Storage, Grain Shuttle Loading Facility
April 13, 2015
CHS Inc., the nation’s leading cooperative and ranked No. 5 on the CropLife 100, and Aurora Cooperative (ranked No. 21) Read More
CropLife 100GROWMARK Acquires Missouri Refined Fuels Terminal
April 2, 2015
Bloomington, IL-based GROWMARK and Magellan Pipeline Co. have entered into an agreement in which GROWMARK will acquire the refined fuels Read More
CropLife 100Wilbur-Ellis Acquires South Dakota Retailer
April 2, 2015
Wilbur-Ellis Co.’s Agribusiness Division, a recognized leader in precision agriculture technology and the distribution and marketing of plant protection, seed Read More
CropLife 100The McGregor Co. Closes Smith-Kem Acquisition
April 2, 2015
The McGregor Co. — ranked No. 16 on the CropLife 100 list of largest U.S. ag retailers — has completed Read More
CropLife 100BRANDT Commemorates National Ag Day
March 20, 2015
The Illinois agriculture community gathered at BRANDT global headquarters on March 18 to celebrate National Ag Day behind this year's theme Sustaining Future Generations. Read More
Latest News
Industry NewsCHS Insurance Names New Director Of Sales
April 17, 2015
Bryan Lewis has been named director of sales for CHS Insurance, the nation’s largest agribusiness insurance broker and full-service insurance Read More
Mature Waterhemp in Corn
HerbicidesGenetic Literacy Project: There’s No Such Thing A…
April 17, 2015
Read the latest “analysis” on GMOs from Consumer Reports and you’ll “learn” that glyphosate, the chemical developed by Monsanto (its Read More
HerbicidesNew Resistance To 2,4-D Discovered In Australia
April 17, 2015
In a world-first case of herbicide resistance, researchers have confirmed that sowthistle weed in the south east of South Australia Read More
ManagementNews From RTP Company Visits and Growers Buying Older S…
April 16, 2015
Paul Schrimpf and Eric Sfiligoj discuss recent trips to the Research Triangle Park area and market seed sales trends. Read More
soybean field
StewardshipNew ASABE Standard Establishes Framework For Sustainabl…
April 16, 2015
The American Society of Agricultural and Biological Engineers (ASABE) has initiated a project to develop a new standard to establish Read More
MicronutrientsSouthern States: An Inside Look At Our Tissue Sampling …
April 15, 2015
Remember learning about the food pyramid in school? The nutritional diagram recommends the proper amount of nutrients you need on Read More
Industry NewsArysta Adds New U.S. Fungicides Marketing Manager
April 15, 2015
Arysta LifeScience North America recently hired Deneen Sebastian as its Marketing Manager for U.S. Row Crops, Fungicides. Most recently, Sebastian Read More
FungicidesVerdesian Launches Phosphite-Based Cereal Fungicide
April 14, 2015
A new, phosphite-based fungicide designed for improved suppression of deoxynivalenol (DON) in wheat and barley infected by Fusarium head blight Read More
Mature Waterhemp in Corn
HerbicidesSURVEY: Close To 90% Of Growers Battle Weed Resistance
April 14, 2015
Herbicide resistance management continues to be a priority for corn and soybean growers, and they’re working together more effectively to Read More
CropLife 100Pinnacle Agriculture Acquires Minnesota Retailer
April 14, 2015
Pinnacle Agriculture Holdings, LLC, ranked No. 6 on the CropLife 100,  has successfully acquired Liebl Ag, LLC in Ada, MN.  Read More
StewardshipFMC Corp. Joins Sustainable Agriculture Alliance
April 14, 2015
FMC Corp. has joined Field to Market: The Alliance for Sustainable Agriculture, a multi-stakeholder initiative working to define, measure and Read More
Industry NewsArysta Adds Two To Goëmar Sales Team
April 14, 2015
Arysta LifeScience North America recently announced two new additions to the Goëmar sales team: Steve Kelly, Technical Service Manager – Read More
Valley Variable Rate Irrigation
Precision AgVariable Rate Irrigation Gains Followers
April 14, 2015
Irrigation systems have had the ability to apply different amounts of water throughout a field for decades, using timers that Read More
CropLife 100CHS, Aurora Cooperative Complete Fertilizer Storage, Gr…
April 13, 2015
CHS Inc., the nation’s leading cooperative and ranked No. 5 on the CropLife 100, and Aurora Cooperative (ranked No. 21) Read More
Soybean field
Industry NewsThree Ag Co-ops Poised For Possible Merger
April 13, 2015
Following months of study and preparations, the Board of Directors for United Farmers Coop (UFC), Farmers Elevator Cooperative (FEC) and Read More
Eric SfiligojAgriculture Braces For More Belt-Tightening
April 13, 2015
Spring is in full bloom across the U.S. and ag retailers and their grower-customers are busily getting into high gear. Read More
ManagementPollinator Health and Washington, DC
April 9, 2015
CropLife America’s Kellie Bray speaks with CropLife Editor Eric Sfiligoj regarding bee health and proposed Beltway regulations. Read More
InsecticidesValent Takes On MGK Insecticide Portfolio
April 9, 2015
As of April 1, Valent U.S.A. Corp. became the exclusive provider of the MGK crop protection line of insect control Read More