HOLDREGE, NEBRASKA. It's clear Chris Nelson isn't afraid to make the tough calls. This year, the third-generation farmer took a lot of unusual steps to rein in costs on his 1,800-acre corn crop. None of them easy.
"We made a lot of little cuts. One was on our insurance. We looked for cheaper inputs, price-shopping everything. We took our chemical program back a step, spraying earlier so we could skip using the more-expensive late-season herbicides. On equipment, we didn't trade combines this year."
Nelson says they normally trade about every four years, but he hopes to get through 2020 without trading.
"It's the same story on our corn header. We're rebuilding that instead of trading it," he adds. And, he's cut fertilizer costs about 30% by spreading out the application over the year.
On the positive side, the producer got his crop in mostly on time. He's not expecting record yields, but he's continuing to see success with a high-seeding, 20-inch row-planting system that has him dropping 38,000 to 43,000 seed per acre. The previous no-till and strip-till producer says he believes the 20-inch system has helped boost corn yields by around 10%.
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Nelson wishes there were more crop options in his area but says he is largely locked into corn and soybeans. "For us, it becomes a race every year to figure out how to outgrow what we did the year before. Along with that, you have to be conservative, because you simply can't count on a record crop every year to keep you going."
Before 2019 harvest, Nelson says December futures gave him the chance to lock in some corn at $4.25 to $4.60. Those are numbers he can work with, but he adds that he was afraid to sell too much at that price.
"There's so much volatility in the market, you could really regret a decision like that," he says. "This market has been hard to predict. I think the key for 2020 is to focus on controlling your side of the equation to the extent you can. There are hard choices to make, but you have to constantly adapt to survive."
Corn Outlook 2020 from DTN Analyst Todd Hultman:
> RECOVERY FROM A ROCKY START
The final story has yet to be told for the 2019 crop. After corn growers saw some of the worst planting conditions in the modern era for the 2019 season, it remains difficult for the industry to know just how big the U.S. corn crop is as the season wraps up. Immature corn and wet harvest conditions have been part of this fall's challenges and could put new-crop ending stocks somewhere between 1.6 and 1.9 billion bushels.
> BEARISH NEWS
In early 2020, a bearish factor for U.S. corn prices comes in the form of increased competition from South America. Larger 2019 corn crops for both Brazil and Argentina increased their total corn-export projection levels by more than a billion bushels compared to the previous season. This increased competition has already taken a toll on U.S. corn exports for the 2019-20 season and will make it difficult for exports to reach USDA's projection of 2.05 billion bushels.
> WEATHER OPPORTUNITY
South American weather problems early in 2020 are one of the few scenarios that might allow July 2020 corn to trade above $4.25 by late May, when the next wave of South American crops start to ship.
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