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WEST LAFAYETTE, Ind. — The past year presented a number of challenges for agriculture. Weather, as it often is, was at the top of that list.
Rain and flooding impacted the ability to get into fields and led to difficult decisions about whether to delay planting or take prevented planting insurance. Those delays then led to a late harvest.
While weather had significant effects in different areas, nationwide, there were only modest improvements in commodity prices.
Looking ahead, 2020 surely will have its challenges, but also opportunities.
AgriNews asked several experts for their tips to make the New Year successful. Here are their answers:
“I think the one of the most important issues for farmers in 2020 is revenue risk management. I’d encourage farmers to, if they haven’t already done so, prepare a budget for their 2020 crop and take a close look at pricing opportunities provided in the futures market at least one day per week. At the Purdue Center for Commercial Agriculture, we update our Crop Basis Tool on our website each week, which makes it easy to examine current basis patterns with historical basis levels. The tool can also be used to forecast basis for future delivery by looking at historical basis levels for the time of year you’re thinking about moving corn or soybeans. After adjusting for basis, compare available pricing opportunities with the levels you need to achieve your budget objectives. And when you spot profitable opportunities, take advantage of them by initiating sales. If you have storage facilities available, make sure you’re using those to your best advantage by capturing post-harvest basis improvements, futures market carry and simply becoming a better merchandiser of your crop production.”
James Mintert, director
Center for Commercial Agriculture
“I don’t think there is a single ‘right’ advice for every farmer. It will depend on individual strategies and positions. Given the continuation of relatively low commodity prices, it will be important for farmers to find ways to control costs; however, it is also important to stay abreast of trends and make investments in productivity enhancing technologies. Low margins for commodity crops will prompt explorations for alternatives — it is important to ensure market access and mitigate price risk when exploring new ventures through contracting or other alternative marketing arrangements.”
Jayson Lusk, distinguished professor and head
Purdue University Department of Agricultural Economics
“There has been a tremendous amount of volatility pertaining to corn and soybean prices in recent months. The recent increase in soybean prices makes it more difficult to determine whether a farm should plant relatively more corn or relatively more soybeans in 2020. This decision will be particularly difficult in the eastern Corn Belt.”
Michael Langemeier, associate director
Center for Commercial Agriculture