Having just returned from the land of cotton and a string of meetings that put me in touch with farmers and top economists from all over the country, it is clear to me that the acreage battle for this spring is far from over. With cotton prices at their highest level since the Civil War (seriously), record corn prices and strong commodity prices across the board, deciding what to plant where isn’t a simple decision.
As one Georgia farmer told me, "It’s been a long time since I had so many choices for making money, and I’m still not 100% sure what to do." Not that long ago, he wouldn’t have thought twice about what to plant. His family grew cotton for generations before economics in the past decade taught them they had to be nimble and "crop neutral." Ironically, we met at the Farm Journal Corn College for the South, where he was fine-tuning his corn-growing skills.
Economists tell me that at today’s commodity prices, 2011 farm revenues are predicted to be 30% to 35% higher than in the record years of 2007 and 2008. That’s tall cotton no matter what crop you grow!
Add in that land values are picking up momentum, and many farmers—especially those who grow crops—have lots to smile about. On the flip side, smiles are harder to come by for livestock producers. High commodity prices pile on more pressure. For both sectors of agriculture, it’s more crucial than ever to stay on top of marketing, risk management and emotions. The volatility, the opportunities and the money on the line can make for what our Field Agronomist Ken Ferrie calls "Maalox moments" if you’re not careful!
- February 2011