| frytownfarmer - 5/29/2017 11:25
I think these markets are saying it out loud "prove to us you have a problem"
No doubt - we kill the crop 12x before harvest and since all news now has to be 'breaking', 'just in', 'aint it awful' the rhetoric is a little overdone. Having spring troubles is nothing new and the irritating thing is it might only mean a basis move as flat price won't care (they know the total production is plenty). We are pretty good at this and corn/beans seems to be grown just about everywhere (including far north ND) - risk is spread out much farther. So, the trade has a point.
My hope is we have a fairly normal year for yield and that the low prices do their job and attract more demand. In the past, most end users were set up for very few alternatives to the base commodity they use, however, $8 corn changed that and there is much more flexibility. The problem is alternatives work and generally remain cheaper (but not always). I don't know how low grains have to go before they are a better value than alternatives - probably don't want to find out.
As producers, our problem is to adjust our costs to line up with lower prices. This isn't easy, but is pretty typical in other businesses (so why doe UPS run their trucks so long?). In commodities, we are going to have good and tougher times. Oddly some of the tougher times are also the most stable. No one gets rich, but stability makes it far easier to plan. |
Which crop looks to generate better returns in your area?
