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What is wrong with us?

Agriculture.com Staff 01/02/2009 @ 8:17am

The current situation in agriculture reminds me of a story about a very pessimistic farmer. His neighbors got tired of hearing him complain all the time. They devised scheme to admitting conditions weren't so bad.

One by one they reminded him of all the things that had gone well in the past year. Finally, one of his best friends observed that he had the best yields of his long farming career that year. The old farmers replied, "Yes, but those good yields are sure hard on soil fertility!"

It seems as if some people today are in the same mental state as the pessimistic old farmer. I saw a piece in the farm press this week about three fairly large farmers and how difficult it was going to be for them to make money in 2009. I understand that livestock producers had a tough year in 2008. I understand the predicament of some farmers who suffered from late spring floods. I understand that those who forward contracted corn for $4.00 are not happy with their marketing success.

Still, when all things are considered, grain farmers in general made money. If a few things like good yields and successful marketing moves worked just right, they made more money than they ever have before. I suspect that there are many in that situation. I talked to one farmer recently who has been farming much longer than I have who said he is in the best shape financially of his career.

Skeptics will say that things are not going to be nearly as good in the New Year. I agree. However, for most of us the time of buying inputs and selling grain for 2009 is just beginning. We have until at least April to make purchases and until August 2010 to sell our soybeans and corn. That is plenty of time for prices to change.

Yesterday I did crop budgets for the upcoming "Winning the Game" workshops that begin on January 13. I used grain quotes from Tuesday's close and yesterday's price for seed, chemicals and fertilizer. It is tough to get a good handle on land cost and machinery cost because everyone has a different way of calculating those. I used my APH yields and estimated crop insurance premium costs. The final figures showed corn returns at slightly less than break even and 73 cents per bushel profit for soybeans.

When estimating returns, we need to remember two things. First, this is the time of year when we normally do not see good new crop bids. Secondly, the market does not care what my cost of production is, so the price may or may not ever get to a profitable level. In 2007 and 2008 prices went well past profitable levels. In 2009 we may be lucky to get 10% or 20% over break even.

I suspect that most farmers are not complaining about how tough things are.

We are probably better off having the kind of publicity we have than having the media touting how farmers are making a bundle of money. Still, when I hear someone complain, I wonder what is wrong with anyone who can grumble about a year like 2008!

The current situation in agriculture reminds me of a story about a very pessimistic farmer. His neighbors got tired of hearing him complain all the time. They devised scheme to admitting conditions weren't so bad.

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