|You are here: Blog » Farm and Ranch Management » Winners and Losers In a Challenging Season|
June 3, 2019
Those involved in agriculture will long remember 2019. Producers in some areas are facing unprecedented planting delays for both corn and soybeans whereas other locations have planted, but wet weather is slowing crop progress. River flooding has inundated thousands of acres of farmland while also disrupting transportation of ag supplies and grain. Grain markets have been on a roller coaster ride depending on day to day trade news with most of the time being driven lower when no resolution seemed in sight. Nothing is harder on a farmer than to stare out their shop window at another rain storm while the equipment is ready and everyone is chomping at the bit to plant the new crop.
Uncertainty surrounds agriculture at this moment with one of the biggest question marks being what size will the crops be this year with expected acres that won't be planted. Many producers are wondering whether to plant the first crop, a second crop, or to make a prevent plant claim. Financially, expenses have to be paid and rents are due, but revenue is more uncertain than ever with production in question and grain prices reacting in the moment to weather and news. Added revenue will come from the Market Facilitation Program, but it too lends uncertainty until a final determination on how and when it will be paid to producers.
There will be individual winners and losers in agriculture this year. If a farmer or landowner planted their corn crop in a timely manner, they could very likely benefit from higher corn prices resulting from reduced plantings elsewhere and a smaller crop. Those who have to plant each crop late or who aren't able to plant at all, have crop insurance to mitigate much of the loss, but it normally does not make a producer whole compared to producing a good crop.
Challenging weather years, whether too wet or too dry, affect the local land market even though the seasonal effects may be short lived. Buyers generally become more cautious in poor production areas and less likely to bid aggressively for land that comes up for sale. Conversely, if an area is experiencing better than average profits, buyers feel more able to bid on land. In areas experiencing one or more lower profit years, some additional land may also come on the market due to financial stress. We are starting to see both scenarios play out in areas around the grain belt.
Senior Vice President - Real Estate Operations
|Category: Farm Management News|