Will Farmers Reduce Production
Agriculture Online has a good quick article on whether farmers will reduce their production levels in 2010 due to the large crop that was grown in 2009. Corn has rallied about a $1 since early September and soybeans have gone up about $2.
However, the government report on Tuesday led to limit down price moves in corn. Surprisingly to the author, farmers seem to be upbeat this time of year compared to previous years. It seems that the fundamentals of the world grain market may have changed to promote high levels of production since the demand is now starting to keep up with these levels of production.
I think you need to make sure not to rely on this, but rather, make sure you have marketed enough of your 2010 production to cover your input costs. At these price levels, you should be able to still get good pricing to cover them.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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