Grain planting stays right on track
As the coronavirus pandemic continues to wreak havoc throughout the agriculture industry, grain farmers throughout the region appear to be staying on track with their planned crop plans.
“We are farmers. We’re not going to let it sit idle,” said Mark Wilson, a Smyrna, Del. farmer. “The average farmer is the most optimistic person you’ll ever meet,” Wilson said. “They put more money in the ground in one year than most people put into their houses their entire lives.”
Robert Harper, grain division manager for Virginia Farm Bureau Federation, said of all the farmers he works with on marketing grain, only one has significantly changed his crop plan in recent weeks.
The rest share the thought of what another grower told him recently.
“He said, ‘I’m just doing what I do. I’m working on controlling what I can control,” Harper said.
Harper estimated farmers have about 20 to 25 percent flexibility in their crop plan that can be shifted from corn to soybeans if there are delays in getting corn planted but growers committing to seed purchases earlier in the year for better discounts, sticking to crop rotations, nutrient management regulations and federal farm programs all play into a farm’s crop plan. Harvesting equipment limitations also play a role on many farms, he said.
Harper said many growers take a long view in their planning looking at a five-year average rather than going year to year.
Commodity prices have fallen significantly in the wake of the coronavirus crisis impacted by drops in the equity and energy markets, Harper said.
Plummeting demand for gasoline has idled ethanol plants in the Midwest, and several meat packing plants across the United States have slowed production or shut down from workforce shortages.
Lindsay Thompson, executive director of the Maryland Grain Producers, said supply chains in the grain sector are pressed but keeping inputs like fertilizer and crop protection products moving.
“Our biggest issue currently is the market,” Thompson said. “Ethanol production and blending has tanked. The price of ethanol has tanked nearly 40% in a month.”
If processing capacity in the local broiler chicken market slows even more, it could more greatly affect local prices, she added.
“Nothing is real bright out there,” said Wilson, referring to commodity prices. He said wheat is perhaps the only bright spot in the commodity market now but due to less than great recent growing seasons and stiffer quality parameters, many farmers reduced wheat acres or stopped growing it altogether.
He said delays in planting, as in other years, will likely mean more in determining what changes growers make on acreage.
“They’re sticking to their game plan,” Wilson said. “Right now they’re going to plant corn because there’s less of an opportunity to making money on soybeans.”
Wilson said catching timely rain in the growing season can translate to a larger yield gain in corn over soybeans and potentially get a better return.
“Corn is still king, you’ve got to grow the crop though,” Wilson said. “You’ve got to have the proper nutrition.”
According to USDA’s March prospective planting report, farmers in Virginia intend to plant 540,000 acres of corn, unchanged from 2019.
Soybean acreage in Virginia is expected to total 600,000 acres, up 30,000 acres from the previous year.
In Delaware, corn acres are projected to be down slightly from 2019 but equal to 2018’s 170,000 acres.
Soybeans are also projected to be down slightly, from 155,000 acres last year to 145,000 acres this year.
In Maryland, corn is projected to be about 10,000 acres less than last years 510,000 acres but 60,000 acres more than the 2018 crop. Soybeans are projected to be at 470,000 acres, 10,000 less acres than 2019 and 60,000 less than 2018.
The Prospective Plantings report provides the first official, survey based estimates of U.S. farmers’ 2020 planting intentions.
USDA’s acreage estimates are based on surveys conducted during the first two weeks of March from a sample of approximately 80,000 farm operators across the United States.
Nationally, growers intend to plant 97.0 million acres of corn for all purposes in 2020, up 8 percent from last year, according to the report. If realized, this will be the highest planted acreage since 2012.
For soybeans, growers intend to plant 83.5 million acres in 2020, up 10 percent from last year. Compared with last year, planted acreage intentions are up or unchanged in 22 of the 29 estimating States.
Easton, Md., farmer Greg Gannon said the coronavirus crisis is affecting life in many ways for everyone but in a volatile market, drastic changes may not be helpful in the long run.
“This can only make it worse, logically, but markets are markets and who knows what can happen,” he said. “We’re staying with the same plan we had a month or two ago.”
Travis Hutchison, Cordova, Md., farmer and past chairman of the Maryland Soybean Board said his family operation isn’t planning to make any big changes in crop acres, either, relying on their diversification with multiple processing vegetable crops and on farm grain storage to manage through tough times.
“We find if we try to guess the market, we guess wrong,” Hutchison said. Using grain storage “we have a wider window” to sell the crop, Hutchison said.
Rob Davis, risk and market advisor at Nagel Farm Service in Wye Mills, Md., said some growers have made adjustments to their marketing plans by putting a “double-up option” into contracts. The option gives away some of a farmer’s potential upside in a future year’s production to gain more value this year.
“It’s a way for farmers to in a way play defense for this year,” Davis said.
Harper said his philosophy for advising farmers remains the same: Know your costs and break-even point and don’t hesitate to make small sales above those break even points.
More recently, he said farmers have been contracting a basis price but leaving the crop price open.
“Logistically, they’re staying current and waiting for the futures board to present a rally,” he said.
Davis and several famers said crop insurance, particularly the popular revenue protection option is serving as a good protection tool against more decline in prices.
“That’s a pretty hefty anchor,” Davis said. “That is a bright spot.”
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