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When's the worst time for poor yields?

To state the obvious: There's never a good time to have poor yields; they're always bad. But are some years worse then others to be hit with poor yields?...

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To state the obvious: There's never a good time to have poor yields; they're always bad. But are some years worse then others to be hit with poor yields?

I ask because uncooperative harvest weather is hurting yields for many Upper Midwest farmers. It's too early to accurately estimate the extent of the losses, but yields definitely will be poorer than they would have been with better weather. Poorer-than-hoped-for yields, of course, come on top of poorer-than-hoped-for crop prices.

I'm reminded of a brief debate between two farmers that I overheard years ago at a grain elevator. Drought had hammered yields in their area, and both farmers were harvesting poor crops at a time of poor prices. And so they talked about the worst time to have poor yields.

The first farmer said that the year's poor yields, while painful financially, would have hurt even more if prices had been good. He said he'd prefer good yields when prices are good and poor yields when prices are poor. "Of course I never want a poor crop. But it's to better have one now than when prices are good," he said.

The other farmer disagreed (quite vehemently). He insisted that poor yields are worst when crop prices are poor. To survive until the next crop year, he needed good yields to offset the poor prices, he said.

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Which farmer was right?

The answer, I suppose, depends on a farming operation's cash flow and overall financial strength. If you're struggling to stay afloat, you probably agree with the second farmer. If you're in a fairly strong financial postion, you probably agree with the first farmer.

As always, your thoughts are welcome. Drop me a line at jknutson@agweek.com

 

 

 

 

Opinion by Jonathan Knutson
Plain Living
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