View from the Cab: Staying afloat
Low prices, trade disputes and the threat of another government shutdown have many farmers on edge.
We heard about crop production from USDA last Friday, even though the information was supposed to be released in January but wasn’t due to the government shutdown. Trading was actually fairly quiet ahead of that report since traders in China took time off for Lunar New Year celebrations. Another big report is due out March 29 when USDA reveals planting intentions for the coming season. Let’s just hope there is no shutdown in the meantime.
The president had set a Feb. 15 deadline for the possibility of another shutdown. This means future USDA reports would be impacted yet again. Plus, local FSA service centers would likely be closed unless the agency decides to open them. It is getting to the point where we need these offices to be open because another farming season is knocking on our doorstep. Some say the March 15 federal crop insurance deadline could even be impacted should a repeat shutdown occur.
The Wall Street Journal took note of these tough times for farmers and ran an article last week on the large number of farm bankruptcies throughout the Midwest. The article indicates producers are filing for protection at levels not seen for at least the past 10 years. A circuit court district which includes Illinois and two nearby states saw double the number of bankruptcies in 2018 compared with 2008, according to the article.
My recent interview with Agrivisor senior market analyst Dale Durchholz won’t bring farmers any relief. He continues to predict a cyclical low coming sometime in the middle 2020s.
“Right now is the time to start planning ahead,” Durchholz told those attending the Livingston County Agronomy Day in January.
The upcoming period in agriculture may not be so much fun if a grower doesn’t have the proper financial structure. It all comes down to price cycles, in Durchholz’s opinion.
“If I prepare for the worst and it’s not as bad as I think, I’m still better off,” he said.
Good luck navigating the rough agricultural waters in 2019. We could use some positive news in the world, because that is going to be the only thing to keep us afloat at some point.
(The View from the Cab blog is powered by Petersen Motors of Fairbury)