I don't know about you, but I'm still eating Thanksgiving leftovers, in a way. Being the child living the farthest away from home, I could only justify taking what no one else wanted: the carcass. I'm also the only one in my family patient enough to wait for a slow boil to pull the rich goodness from the bones into a broth.
To me, patience is an important thing to have on Thanksgiving, after all, no one wants to rush the turkey or cause a family ruckus. But I contend that patience is also necessary for those watching and relying on the corn market. The price pattern has certainly borne the old adage "a short crop has a long tail" true. It's been a rough ride, and unless there's a large crop failure somewhere in the world, it'll be a tough few years.
DTN Senior Analyst Darin Newsom likes to say it's the end of the demand market for corn. That shift is impossible to ignore, especially if you have grain in the bin and need to formulate a plan for next year. While penciling out profits after three years of $6, $7 and $8 corn might be difficult, row crop farmers can make it work with a little resourcefulness and planning.
"This is a period of moderation, not a bust," Purdue University ag economist Chris Hurt told me. "It's a positive in the long run for agriculture to reset the balance between crops and livestock, bring some moderation in prices of inputs, and help farmers become more cost conscious and efficient. That's what all good businesses strive to do."
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Over the Thanksgiving week, DTN ran a series called "Manage Market Transitions" that took a deeper look at the three pillars of corn demand and discussed marketing strategies for stored grain as well as what farmers can do to prepare for 2014. If you missed it, you can find the articles in a few different places. DTN Online subscribers can find them in the "Recent Features" menu under the news tab. It's posted on the "Best of DTN" page, at http://www.dtnprogressivefarmer.com/…, until we update that content on Friday.
The story package also sparked a new DTN 360 Poll question, and I'm interested in hearing what you think (please cast your vote in the poll, but free to explain or offer different answers in the comment section). The question: Given expected tighter margins in the 2014-15 grain markets, what is the most important thing you need to accomplish in the coming year?
-- Find input suppliers who will work with me more on pricing than current suppliers
-- Renegotiate land lease rates for 2014
-- Become more comfortable using futures and options to forward price crop
-- Become more aggressive in using futures and/or options to price farther out than previous years
-- Get control on employee benefits costs (incentives, medical)
-- Cultivate better relationship with lenders to keep capital available
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