ROCK RAPIDS, Iowa — With some degree of weather stops/starts over the last month, harvest has progressed well of late in most areas of Northwest Iowa. Following a growing season with really “a little bit of everything, weather-wise,” it is not surprising that we are seeing a significant variability in reported yields. Certainly, once harvest is completed, the final size of 2017 crops, customarily in January following the harvest, will dictate year-end stocks, and prices over the next 12 to18 months, especially when factoring in some significant old (pre-2017) crop inventories. Right now, these supply factors, coupled with South American weather/planting progress, seem to be collectively showing mixed markets and range-bound trading.
Then, there is demand. Beyond the funds influencing the markets, the general market positives continue to be exports and ethanol, and both at least partially relate to China. As of mid-October it appeared China was using more domestic corn (which halted US DDG imports), and are an exporter of ethanol. Soybeans exports are also showing a slow start to the September 2017-August 2018 marketing year, though we know from history that South America soybean production is formidable competition.
Effective management decision-making necessitates navigating the “known” and the “unknown.” Research shows that long-range marketing is more successful when developing and following a marketing plan. Present markets are affording intermittent demand rallies (on lower prices), and supply rallies (on higher prices). The keen marketer is proactively watching and ready to capture cash flow advantages of these late-October opportunities by knowing and comparing prices to their, by-enterprise, operating break evens (depending upon your outlook, this doesn’t mean you may not be selling at an operating loss). Consistent with your on-farm storage capacities, the better marketer is also ready to track basis moves in his/her local market; and scrutinizing what the market is giving you, as to carrying costs.
Commodity and livestock operating business margins remain tight. “Finding a dime” can go a long way to turn a loss into a profit. One practical take-away seems to be having a marketing plan! Iowa State University Extension and Outreach is jointly offering with Farm Bureau, the well-received, Winning the Game. Winning the Game is again being offered because of commodity prices being dangerously close to most business break evens. It is hands-on education where user-friendly learning will focus on grain marketing, and both available sessions will include a grain marketing simulation. Depending upon sponsors and final feedback from would-be attenders, these 3-hour sessions will be one of two: (a) Launch and Land Your 2017 Post-Harvest Marketing Plan; or (b) Launch Your 2018 Pre-Harvest Marketing Plan. I urge you to check out and attend one (or more) of these five offerings in Northwest Iowa (for more information call me, or the respective county extension office):
- December 4, 2017 from 8:30 a.m. to 11:30 a.m. at Woodbury County Extension Office, 4728 Southern Hills Drive, Sioux City, ph. 712-276-2157.
- December 14, 2017 from 6:00 p.m. to 9:00 p.m. at Northwest Iowa Community College (NCC), 603 W Park St, Sheldon in Room 328C. Contact O’Brien County Extension, ph. 712-957-5045; Osceola County Extension, ph. 712-754-3648, or Sioux County Extension, ph. 712-737-4230.
- December 15, 2017 from 9:00 a.m. to noon at Dickinson County Extension Office, 1600 15th Street, Spirit Lake, ph. 712-336-3488.• December 18, 2017 from 9:00 a.m. to noon at Pocahontas County Extension Office, 305 North Main, Pocahontas, ph. 712-335-3103 or contact Humboldt County Extension, ph. 515-332-2201.
- January 8, 2018 from 6:00 p.m. to 9:00 p.m. at Plymouth County Extension Office, 251 12th St S.E., Le Mars, ph. 712-546-7835
Please call if you have any questions about this grain market discussion, enterprise breakeven analysis, or any other important farm management decisions.
In any event as you wrap-up the 2017 harvest, be safe!
— Gary Wright, Farm and Agribusiness Management Specialist, Iowa State University Extension and Outreach
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