Cropping Plans 2008
Decisions, Decisions . . .

Who would have thought one year ago, that commodity prices would be where they are today? We are living in interesting times. It is refreshing for grain farmers to actually see the potential to make a decent profit this year for a change. These prices are long overdue. One thing is certain, it seems volatility in the marketplace is here to stay for the foreseeable future. There is no doubt that the "green revolution" of biofuels is largely responsible for this shift in prices and hence the marketplace volatility and explosive pricing runs. Think about it - when in the history of modern agriculture has there been a dynamic introduced that creates a vacuum for what we can collectively grow, consume it, and ask for more? Usually when a new opportunity arises to grow "Product X.", we as farmers jump on the bandwagon, produce product X until we quickly achieve market saturation, and lament about the poor prices.

Biofuel production, however, has created the opportunity for farmers to produce huge volumes of product, get paid well for it, and then within the year, have all that product used up, requiring more. How long will this last? When will the bubble burst? Right now, nobody knows, Agriculture has for once, caught the wave and is riding the tide of popular environmentalism. Poll after poll has shown, consumers all over North America admit that they are willing to pay more for fuel that comes from environmentally sound practices as opposed to conventional fossil fuel. For now, farmers need to take advantage of this for all it's worth, as I am sure it will be here for only a few years.

What do we grow in a volatile year like this one? There are so many opportunities out there. Do we grow, what is hot right now? Or do we avoid being like a bunch of sheep and following the crowd; instead, growing, what isn't as popular at the time, with the idea that it will be in demand later as not enough acres were seeded. There are many strategies, but in the end they have to be profitable for your farm. At the time of this printing, indications were that canola and hard wheat acres were going to be significant with some of the "sleepers" so far this spring included flax (which can be locked in for just under $17 per bushel in the fall). A point to make here with flax is that you typically use half the fertilizer that you would with canola. Another "Quiet Giant" this spring is Barley ($5.20 per bushel fall delivery), and believe it or not ... Oats! Yes oats! A crop that only requires a small amount of nitrogen and phosphorus fertilizer, chemical costs that run about $4-$6 an acre and on irrigation at typical yields is 135 to 150 bushels per acre. Fall pricing for oats is around $3.30 per bushel. The key point to take away here is this - All things being equal, you stand to make a decent return per acre on basically all crops. Grow what works best for your farm, and your management style - and not what the neighbors are doing. If you are unsure, give us a call. We have spreadsheets that we can run different cropping scenarios with you right over the phone to help give you more accurate information.