Iowa farm couple honeymoons at CBOT
CHICAGO, Illinois (Agriculture Online)--It's pretty easy to pick out the people walking around the Chicago Board of Trade floor who are not traders. One giveaway is if the person isnâ€™t wearing a trading jacket.
But, when the person is wearing a bright red t-shirt that reads Iowa State Cyclones on it, that tends to be a dead giveaway.
As he rounded the corn pit, I noticed Tom Hiler, wearing his cardinal and red colored t-shirt and bluejeans.
After graduating from Iowa State University in 2004, Hiler returned home to farm with his father and uncle outside of Rockwell City, Iowa. The northwest Iowa farmer is visiting the trading floor for the first time.
Hiler and his wife, Sarah, stopped by the floor of the Chicago Board of Trade while honeymooning in Chicago.
Along with grain farming, Hiler is in the process of building a feedlot, hoping to utilize the large amounts of distiller-dried grains from local ethanol plants.
Hiler handles his own marketing for the grain produced on his half-section of land in northwest Iowa.
Though he markets his grain mostly through the local elevator, Hiler says he uses futures contracts a little.
"I'll sell futures contracts and buy them back if needed. But, I don't do a lot of that. Mainly, I speculate on options through a commodity broker," Hiler says. "He watches the options prices and lets me know what's going on."
In 2005, Hiler says he learned how tough the markets can be. "We had grain forward-priced through the elevator. When the prices started going higher we bought some of that grain back. We bought back at the right time, but sold again way too early."
In general, Hiler says most producers price their crop at one of the many co-op elevators around Rockwell City.
"We love the fact that we have a lot of people wanting to buy our corn," Hiler says. "Plus, we haul to the nearby ethanol plant. It's nice to have that competitiveness going on around us."
WAITING TO PRICE 2009/10 CROP
With input costs going higher, Hiler is not focusing on selling his future crops at these historically high prices.
"Input costs use to go up a little bit, but they generally were pretty flat," Hiler says. "But, the horror stories I'm hearing on anhydrous and dry fertilizer prices has me not knowing where my costs are going to be in 2009/2010."
If fertilizer costs double in the next year, that will paint a new picture on break-even levels, he says.
"Right now, I'm just trying to price my 2008 crop and not doing a very good job at that."
2008 CROP ROTATION
For a lot of reasons, one being his land is more suitable for corn, Hiler plans to plant 50% corn, 50% soybeans in 2008. However, more producers are leaning towards planting more soybeans this year in northwest Iowa.
"In our area if you grow 50 bushel beans, that's pretty good. But, with $13 soybeans, even 30 bushels per acre is not a bad place to start your marketing," Hiler says.