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6 Points They’re Talking About at Commodity Classic
Every February, corn, soybean, wheat, and sorghum farmers from across the U.S. meet at the Commodity Classic. It’s a time when companies pitch farmers on their latest products. Speakers also inform farmers on the latest strategies to help keep them farming. Here’s some of what folks have been talking about at this year’s meeting in Anaheim, California.
1. Syngenta is “doubling down” on its seed business. “We are a distant number three, but we want to be a strong number three by 2022. And then we are in sight of being number two,” says David Hollinrake, president of Syngenta Seeds. Steps taken to do that include tripling the NK brand sales force. “We have added 50% more breeders to the staff to improve long-term product offerings,” he says. “We have made a significant increase in computational biology. We have added more mathematicians to our team more than anyone thought would occur years ago.”
2. Syngenta continues to churn out ethanol premiums. Currently, there are 31 ethanol plants that use the company’s Enogen hybrids for 1,700 Enogen growers in 12 states. Premiums are 40¢ per bushel. During this year, premiums over the last six years will top $100 million, says Chris Tingle, head of Enogen commercial operations for Syngenta.
“It is a win for growers and their local communities,” he says.
3. Tight margins are tempting farmers to cut back on certain inputs. On the other hand, now can be a good time to boost certain inputs. Casey Hook, a Lake City, Arkansas, farmer, is building up his phosphorus and potassium levels across his farm. They’re less expensive than they were several years ago, he says. When commodity prices do rebound, he says he’ll be ready for the uptick with such steps.
4. Soil health is a hot topic. Hot topics often bring products to “help” such trends along, such as microbial soil additives and seed treatments. So how do you know what works and what doesn’t? Ignore marketing spin and testimonials; instead, examine data, says Sean Evans, Monsanto technology development manager. “Look at the number of times studies were replicated, and what sort of conditions the trials were conducted under. If you can’t access data, that tells you something. Multisite, multiyear data is really important.”
5. Get ready for interest rate hikes. It’s anticipated the Federal Reserve Board will hike interest rates in 2018, to where several rate hikes over the year may bring interest rates .75% higher at year’s end, says Bill Johnson, chief executive officer of the Farm Credit Mid-America. The good news is the Fed has been good about communicating ahead of its actions, says Johnson. “We are still at all-time low interest rates. It is a great opportunity to lock in long-term interest rates,” he says. Granted, commodity prices are much lower than they were five years ago. Still, Johnson says the mood at Commodity Classic is more optimistic among farmers he has visited with than he expected. “No one is turning somersaults, but there is a sense that we have made it through another year,” he says. “The (recent) rally (in grain markets) has helped, so there is a bit of optimism for this year.”
6. Thinking about buying farmland? Historically low interest rates sure help. If you take the plunge, consider stretching out financing terms and making a small down payment, says Jim Mintert, a Purdue University agricultural economist. This enables you to make the purchase while maintaining working capital and agility. “There still could be challenging times ahead, and you want to be prepared for them,” says Mintert. Maintaining working capital can help smooth out any future turbulence.