Not much good news in 2015
The calendar has turned and March 2015 has arrived -- only one cold month now before some of us will be back in the fields. After hearing a slew of farm meeting speakers, it seems clear now that some of the trends that took shape in 2014 will be ...
The calendar has turned and March 2015 has arrived -- only one cold month now before some of us will be back in the fields.
After hearing a slew of farm meeting speakers, it seems clear now that some of the trends that took shape in 2014 will be ongoing in 2015.
For crop folks, propane availability was the big story a year ago. A big, wet, fast harvest in 2013 put a crimp on propane supplies, followed by a cold 2013 to '14 winter that caused expensive spot shortages for home heating in Minnesota and elsewhere. A year ago, we were writing about farmers who beefed up their tank inventory, and about the infrastructure improvements by CHS Inc. and others.
Rail transportation backlogs seem to have evaporated for the moment, in part because of what rail officials have said all along. It turns out that as commodity prices have declined, farmers have been more willing to store crops longer, waiting for price improvements, and the transportation crisis was abated. Shuttle loaders seem to be fine, while single car loaders are still concerned. The railroads are continuing to invest at near-record levels in the region.
Northern tier state farmers in North Dakota and Montana can't count on a downturn in the oil industry to make railroads much better at shipping grain. Even if the number of new oil rigs declines as predicted, the pace of oil pumping has increased to nearly 1.3 million barrels a day, up from about 1 million barrels a day last April.
A festering concern is an ongoing problem in the Pacific Northwest ports, as the port authorities continue to struggle with the longshoreman unions over work rules, wages and benefits. This is a big problem for niche markets such as food-grade soybeans, distillers dried grains, meats and even frozen potato products. Shippers (and the longshoremen who move their products, ultimately) all will lose to foreign competitors if the problems aren't stopped soon. The Canadian government has been more proactive in keeping its ports working, and that's been good for farmers.
In Washington, D.C., heavy decisions are being made involving the Renewable Fuel Standard and whether farmers' corn and byproducts can expect a viable, growing future. With the U.S. selling 10 percent blends of ethanol, the market is about 5 billion bushels of corn.
But it's March.
In Agweek country, it will soon be time for most farmers to put aside the concerns of state and national politics, and get to the business of planting wheat, sugar beets and other small grains. It's time to maintain the machines and make final preparations for crop inputs.
With price projections less favorable, farmers will have to hope for opportunities in price volatility. Farmers chatting at recent winter shows have privately confided they're already feeling extra pressure from lenders. Fuel prices have gone down, but that's become a smaller part of their inputs than it used to be.
Land rent, fertilizer, chemicals and seed prices have not come down much, but two big plants are planned in the region, adding to a brighter long-term picture. One octogenarian at a show bragged to me about his farmer son, but confided he was glad the kid in his 50s wasn't here to spend money.
I don't know about you, but I've been to the meetings and didn't hear a lot of hope. I think we'll have to wait to cheer up when we smell the soil again. I'm thinking April.