Tough Decisions Ahead
When I asked a dairy farmer friend recently what would make a good topic for an article during the new year season, his quick answer…
When I asked a dairy farmer friend recently what would make a good topic for an article during the new year season, his quick answer was that Americans need to be thankful for all that they have in this country. It was a positive answer from someone faced with much lower milk prices next year and sky-high property taxes that will take a real bite out of income.
It is the time of the year when people often do much reflecting on the past year as well as on the new year. While the past year may not have been as good as many farmers would have liked, especially those with much corn and soybeans to harvest and sell, the year is past. No one can bring it back, but one can learn from it.
At the same time, most farmers are thinking about the year ahead. They have some decisions to make fairly soon. For example, those who depend on growing grain to make a living will need to decide if they are going to plant corn or soybeans next spring. Which one will bring in the most profit?
It won’t be an easy decision. As they study reports on supplies in stock, foreign stocks of both corn and beans, export possibilities and their costs to produce those crops, they will make some decisions. They need to order their seed and fertilizer before too long, if they have not already.
Most grain farmers will look at what they got paid this fall for their crops, consider the labor involved, try to look at the big picture, and then make their decisions. Some smaller growers may get out of corn and beans altogether.
Dairy farmers are also faced with a different decision. Milk prices in the coming months may get down as low as $15 for a hundred pounds of milk. That would be $8 to $9 less than they were paid this past year. Prices like that will be a tough pill to swallow for most of them.
One thing in their favor, which is what hurts grain farmers, will be the lower price for feed. Since much of the grain is fed to livestock, lower grain prices will keep feed prices down. Feed is one of the major costs for dairy farmers to produce milk.
So, one can say what is not good for one can help another one.
Another dramatic change that everyone has been enjoying is the lower price of gasoline. It has helped put a bit more money in everyone’s pockets. Farmers, both grain and livestock, are major users of diesel and gasoline fuels, so the lower prices can help the farm costs.
As they look ahead, many farmers will be watching their expenses very carefully in the coming year. They may not be buying much new equipment or spending money on big ticket items like new tractors, combines or other equipment unless absolutely necessary.
Something else that would help next year, and local farmers can’t do much about it, would be dry weather at harvest time. One farmer said to me recently that this fall was the third year in a row that he had to harvest crops in the mud. So, a dry harvest would really be helpful.
As people do their reflecting about last year and next year, let’s be thankful, enjoy what they can, change what they can and accept what they cannot change.
Happy New Year to all.
Parker is an independent agricultural writer.
