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Grain Farmers: Get Ready For Some Tighter Years

Gil Gullickson 12/13/2013 @ 4:58pm Crops Technology Editor for Successful Farming magazine/Agriculture.com

Dan Basse is advising his farmer clients to shift from maximizing farm revenues to instead protecting their balance sheets.

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Sideways markets? 12/18/2013 @ 10:37am Tighter margins? There are a few of us that actually lived through the '80s and I remember 15% interest on operating loans, diesel fuel going from 0.40 to $1.20/gal, land values going from $1,200 to $600 almost overnight. What equity there was disappeared very quickly. President Carter invoked a grain sales moratorium and corn went from $3 to $2 in a few days. I am not predicting that for our future, but the memory is still very strong. What about $3 corn and 8% interest rates? What about NEGATIVE margins? There has been technological breakthroughs that have added to the cost of production that cannot be easily reversed, but $400,000 tractors and combines can't produce more bushels. Even if they could more bushels will only lead to larger supply which leads to lower prices. Where is all the money going to come from?

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Conflicting Statements 12/15/2013 @ 7:51am “The functionality of the market is to get fragile land out of production,” he says. “It will probably take some kind of government intervention.” No explanation needed. The statement is contradictory.

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