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Marketing in drought years - Roy Smith

07/13/2012 @ 2:56pm

I get calls wondering how to deal with the current weather situation. Marketing under normal circumstances is tough. Making good decisions when there is the probability of reduced production is even more difficult.

Thinking back over my farming career I realize that no two droughts are the same. I was not yet born when the drought of the 1930s hit Cass County Nebraska. My parents told tales about how hot and dry the weather was in 1934 and 1936. Their comments led me to believe that there was almost no production in those years.

Farm records revealed that farmers in that era raised small grain as well as corn. Most farmers had a cow herd to produce both meat and milk. They also had a flock of chickens. The income page in the record book had an entry almost every week from selling eggs and butter. Times were tough, but there was income to meet family living expenses even in those dry years. It was in 1935 that my dad mortgaged the draft horses and bought his first Oliver Tractor!

Fast forward to the years 1954 through 1956. Those three years saw drought that lasted most of the summer. By then soybeans had become part of the crop rotation. Without herbicides, hand weeding 10 acres of soybeans was a summer’s work for the family. However, the soybeans tolerated the lack of rain better than corn. I was old enough to work for neighboring farmers putting up hay. The goal was to raise enough money to attend college but prospects for that did not look good. Then in 1957 the three-year drought ended and the rains began. College was back in my future.

LIFE-CHANGING EXPERIENCE

Four years of college, two years in the army and five years of being an Vocational Agricuclture teacher left me without memories of drought until 1974. By then I was farming full time and had a family to feed and clothe. The spring of 1974 was wet with late planting. The rain ended and the heat began on June 15. The heat was so intense that the corn leaves curled up before any hint of pollination. In 1974 I had my first and only experience in forward contracting corn that I was not able to deliver. It was a life-changing experience.

That was the year when a corn/bean rotation became the standard cropping practice in eastern Nebraska. The rotation was a life saver for the next three dry years. In both 1974 and 1977 big rains around August 1 brought an end to the dry weather. The rains started early enough to produce good soybean yields. We learned just how tough soybeans can be under extreme conditions.

Many farmers consider 1988 to have been one of the worst droughts in history. That was not the case here. It was hot and dry. However, a couple of timely rains and some wise marketing decisions took the edge off the dry weather finances. Compared to conditions in the central Midwest, we had it pretty good here in Cass County Nebraska. We learned that year that forward pricing in the year following a drought can be a very smart move because prices dropped in sharply 1989.

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