DES MOINES, Iowa — High prices led to a positive vibe at the Iowa Ag Expo on February 1, but a cloudy future has those in the agriculture industry knowing those good feelings may quickly evaporate.
“There’s a good relationship right now with grain prices, but farmers are struggling,” said Marv Mortenson, a farmer from central Iowa. “They are struggling to know where they are going to spend their money because they know this grain price isn’t going to last forever.”
Mortenson said the looming costs to put the crop in the ground will take what would normally be profitable prices and make things quite tight moving forward for some farmers. That sentiment was echoed by ag economist Jeff Peterson, founder of Heartland Farm Partners and the expo, which ran from Jan. 31 to Feb. 2 at the Iowa Events Center in Des Moines.
“Everybody is upbeat, but there’s some concern,” he said. “Break-even costs are coming up and one of the big questions we are getting today is when they should be selling their 2023 crop and how much.”
Peterson said the first thing farmers should do is figure out what their break-even price is, then look at selling roughly half their crop ahead of what could be a volatile year.
“The market doesn’t really care if we make money or not,” Peterson said. “The reason to make new crop sales is because there isn’t much difference between where the price is right now and what the cost of production is. We are actually at a point now where we recommend being 50% sold on insured bushels with about 90% of the old crop sold.”
One cost-saving focus Mortenson had was to be selective when applying inputs. Make sure they go in at the right time and don’t put all your eggs in one basket.
“Don’t put all your inputs in the field on the front side (of the season),” he said. “We’ll wait until the crop starts to develop and mature. Hopefully more rain will come. Crops are not made in one day, it’s made in a season.”
One of the major attractions to the Expo is seeing new equipment. All the major brands were showing off their new tractors and implements, and David Moline, a territory customer support manager with John Deere, was also showing off upgrades that could be made to already-owned products. This would help farmers who may not want to invest large sums of money in new equipment ahead of a potentially volatile year.
“We are using an older planter and putting a performance upgrade kit on it,” Moline said. “We can take this existing machine and put the latest and greatest technology on it. It’s something farmers could do in their own shop, should they choose to do that, or can be done at the dealership as well.”
Moline said this allows farmers to upgrade at a lower price point.
Workers from John Deere display how they are making upgrades to existing planter equipment, offering farmers a possible way to save money by using their currently owned equipment.
“At the end of the day, new technology on a planter is one of the best investments you can make on the farm,” he said. The return on investment is very quick in some cases. With hydraulic downforce, many tests have proven that helps with even emergence and having consistent emergence is going to bump up yields.”
Another factor driving different approaches in the machinery world is the continued effect of inflation and supply chain disruptions, said Dave Brennan, marketing manager for Case IH.
“Things are improving (in the supply chain) and that’s the best way to describe it,” Brennan said. “As we look through 2023, we expect that we are still going to have challenges, but we are going to get better as the year goes on. That’s not just from a whole goods standpoint but a parts standpoint.”
