By Larry W. Dallas, Illinois Farm Bureau District 12 Director
The main st ory for Douglas County agriculture in January has been the unexpected strength in grain prices. The U.S. Department of Agriculture Supply and Demand report that came out Tuesday, January 12 showed both a smaller crop size and smaller world stocks. At the same time sales of our grain into export markets have continued. We are the only nation with any big amount of exportable corn or soybeans right now.
Some think countries around the world are responding to the coronavirus by building both food and feedstocks. Russia has instituted both an export tax and export quotas on wheat to try to stabilize domestic bread prices, despite raising a good wheat crop last year. China continues to buy all types of commodities, including some they have never purchased from the United States in any quantity before this year. Most of our corn export increase this year has gone to China.
The weather problems we have talked about continue. The major growing areas of the U.S. remain dry. South American rain patterns are still spotty with many areas needing a good rain. They will start harvest a couple of weeks late because of delayed planting. Those supplies of corn and soybeans will come to the world later than usual and most people think in smaller quantities. Many areas of South America plant a second crop, usually corn. That two-week differential leaves the corn more susceptible to frost in what will be their fall.
With strong prices, there is grain moving off the farm. We have been hauling corn when the driveways are fit. The warmer than average temperatures have been nice, but a good freeze would be helpful in several ways. There are more than a few grain bins in the county that do not have all-weather access. Frozen ground would let us get to those.
In the last two wet springs we have compacted our fields. A good freeze would help to remove that. We planted both of those years in less than ideal conditions and put compaction into our fields with the tractor passes. These inhibit root growth and slow water infiltration. Water freezing and swelling in the soil will help take that out.
It is hard to know when to pull the trigger and sell the grain we have left. Prices are attractive, the best we have seen in years. Many farmers would like to hit near the top with their remaining crop and make up for the less than average sales early this year. Where to start selling the 2021 crop is on our minds too. Fall corn is a dollar cheaper than cash corn but it is a dollar higher than a lot was sold for this fall. If we come out of winter with continued dry weather this spring, prices might move on up.
Selling a crop at a profitable level seems harder than raising it. There are any number of people and companies that offer advice about the markets, both free and at a price. Our Farm Bureau Marketing committee has tapped a multitude of speakers over the years trying to educate ourselves about the markets. I have tried to access as many sources of information as possible hoping to distill that knowledge into a useful plan of action. At least part of the time I may just have too much information.
There are possible bumps in the road with our higher price environment. High prices ration the demand for a commodity. You need less of an expensive item. Ethanol use is already down because of coronavirus shutdowns. High priced corn will hurt that industry even more. High prices may lead to increased planted acres too. We do not have that much land available to put into crop production, but South America does. The soybean growing areas of Brazil are not rain forest as most think but pasture with scrub trees growing in them. It is easily converted to row crops.
The fertilizer manufacturers and importers think that we might make more money this year and are hiking their prices to get part of that. There has been an upward trend in fertilizer prices since the fall. It might total only a few dollars an acre but that can be a large amount over a whole farming operation. Locking those nutrient prices in with application this fall looks like a good strategy.
Planning for the next growing season continues. A lot of seed has already been booked and paid for but there are herbicide and in-season fertilization programs to figure out. More than ever the characteristics of the seed you are planting and the weed control you use need to be coordinated. Toss in the weed species you need to control and possibly the crop you want to plant next year, and it becomes fairly complicated. It becomes a complex field by field decision.
The seminars and meetings we usually attend in person are nearly all online this winter. They are still valuable for the most part. They can be viewed at any time unless you want to be interactive during the presentation and you save the road time to and from the meeting. There is not the chance to interact with other attendees and discuss the presentation. That can be as important as the presentation itself.
The American Farm Bureau Federation was virtual during the second week of January. I was able to view parts of it and participated in the delegate session. It had the glitches you might expect but overall, we are fortunate to have the technology to allow these virtual meetings and educational sessions.
If you are a regular reader of these local newspapers, you are aware that I was elected to the Illinois Farm Bureau Board in December. Illinois Farm Bureau has 18 districts. We are in District 12 with Champaign, Edgar, and Vermilion counties. Traditionally, a president resigns from his county duties when he goes on the state Board and I have done that. A person might do both, but I do not want to try. I plan to continue to write this column unless someone from Douglas County Farm Bureau wants to take it over. The byline will change to Illinois Farm Bureau District 12 Director and the scope may become a little wider.
Thank you for reading about Douglas County Agriculture this month.