Three factors emerged from the 4 Ag Marketing Club meetings in Central Iowa this week:

1. Row crop farmers are nervous about the recent futures price volatility they’ve witnesses since the Nov. 9th, 2010 Crop Production and WASDE reports.

2. A great deal of fall tillage is done, fall fertilizer purchased and applied as well as 2011 seed already purchased.

3. The majority of 2011 expenses are known and the profit margin potential is extremely large. Discussions of non-land costs approaching $500 per acre on productive land for corn following soybeans and nearly $300 per acre on soybeans following corn, respectively.

It’s no wonder the land values are increasing at 13% annually for Iowa farmland according to the latest Chicago Federal Bank survey with 227 bankers responding.  Remember, one of the many lessons learned from the 2008 collapse in crop futures prices was the need to “lock in” profit margins at the same time you “lock in” the majority of expenses.

Remember those few months in the spring of 2008 when $5 corn futures and $12 soybean futures seemed too cheap for the 2009 crop? Well, most 2011 costs aren’t as high as those witnessed for 2009, especially fertilizer expenses.

Consider incremental sales for fall 2011 delivery.  For 2011 crop insurance, plan on using the new Revenue Protection (RP) policy. If you’re using crop insurance as a part of a pre-harvest marketing plan, use caution in committing to delivery more bushels than your revenue guarantee (APH yield X level of coverage). 

Consider using HTAs for early sales that commit bushels to delivery, anticipating better basis opportunities prior to harvest and delivery. However, in some Central Iowa locations cash bids for first half September are already at 0 basis, thus a forward cash contract might be considered. Identify the well drain fields that might have a shorter season hybrid planted and hopefully harvested early without much drying cost.