Farm Journal experts share their perspectives for the year ahead
As the roller-coaster ride of 2011 makes its final plunge, it’s likely that 2012 will bring the same gut-wrenching twists and turns.
"The global macroeconomics have been—and will continue to be—the dominant force influencing
commodity prices, inputs, global demand and virtually everything," says Farm Journal Economist Bob Utterback. "I expect that to continue for the next three to five years."
In 2012, there’s potential for 2 million corn acres. "If we have trend-line yield and a global economy that remains lackluster, we could end up with a 2.1 billion to 2.3 billion bushel corn carryover," Utterback says. "The last time we saw that carryover level, there was a 3 in front of corn prices."
On the policy front, the supercommittee’s failure to agree on a plan to reduce debt by $1.2 trillion during the next 10 years brings uncertainty to the Beltway. One thing is for sure: "Drafting a farm bill will revert back to a "normal" process, which will bring more scrutiny of what has already been accomplished by the House and Senate ag committee chairs," says Roger Bernard, Farm Journal’s Washington editor.
Across-the-board cuts are still possible to the tune of $15 billion for a nine-year period (which is less than the $23 billion that the House and Senate ag committee leaders proposed to the supercommittee), he adds.
Since 2012 is a year divisible by four, presidential politics will be on the rise. Republicans will be throwing sharp elbows at each other to determine who will face President Barack Obama in November. Some think the election could impact the farm bill process, but 2008 included both, so it can be done, Bernard says.
For now, the political watchers expect the GOP to lose five to 10 seats in the House but still retain control. Republicans are favored to gain control of the Senate, but they have only 10 seats to defend versus 23 for the Democrats.
Closer to home, the MF Global fiasco caused a large amount of fear in farmers about the safety of their money. "Couple that with the European situation and farmers are retracting accounts and putting money under their mattresses," Utterback says.
While many of these issues likely seem far beyond your control, you can still be prepared for the maybes and the maybe-nots. To help you get ready for the ride, we asked our Farm Journal experts to share their advice for the year ahead.
Here’s to a happy new year!
The Dynamics of Weed Control
by Ken Ferrie, Farm Journal Field Agronomist
From a national perspective, pesticide resistance is the biggest agronomic issue facing producers. Many farmers, especially in the Midwest, don’t realize how close we are to losing the pesticides we depend on, such as glyphosate. In the South, producers sometimes have to tear up fields and replant crops because there is nothing they can apply to control resistant Palmer amaranth after the crop emerges. Hand-weeding cotton fields is making a comeback in the South to control herbicide-resistant weeds.
Herbicide resistance has been documented in waterhemp, Palmer amaranth, horseweed and several other species. A strain of frogeye leaf spot that resists strobilurin fungicides has also been identified. Corn rootworms are developing resistance to Bt hybrids, just as they did to some soil-applied insecticides. The scary thing is that it took only three years for resistant Palmer amaranth to reach this level of severity.
Weeds have demonstrated resistance to three types of herbicides: triazines, ALS inhibitors and glyphosates. Unfortunately, there are no new products coming to market in the near future to clean up the mess we made by over-using some popular herbicides.
Once resistant species show up, no farm is safe. Seeds of resistant species will be spread by flooding and runoff from neighboring farms.
Palmer amaranth is spread by pollen. If you have just one plant in your field and pollen from a resistant weed blows in from a neighboring farm, you can develop your own population of resistant weeds.
That changes the dynamics of weed control. It means 90% or 95% control is no longer sufficient. Now you need 100%.
Follow your suppliers’ and consultants’ advice to avoid developing resistance to fungicides,
insecticides and herbicides. With weeds, rotate crops and herbicides. Don’t treat every field with one herbicide just because it’s the cheapest route.
Losing products such as glyphosate could add $30 to $50 an acre to herbicide costs. If the price of corn goes back to $3 a bushel, that won’t be affordable. It’s better to spend extra money on weed control now, when commodity prices are high, and prevent resistance from developing.
Start with weed-free fields and keep them clean. Appoint a pesticide boss, and make him responsible for scouting. If you see four or five weeds, such as waterhemp, surviving your herbicide treatment, that could be the start of resistance. Get rid of them. Remove them manually, if you have to. This is no time to cut corners.
Learn from the Past to Advance
Corn-on-Corn Yields to the Next Level
by Missy Bauer, Farm Journal Associate Field Agronomist
Now is the time to evaluate the previous growing season and consider how you can use that information to make solid agronomic decisions for next year. Three factors I would like corn-on-corn farmers to address are: planter preparation, disease pressure and nitrogen management.
1) Planter prep. We have repeatedly seen farmers’ efforts to prep their planter for each field pay off in more bushels per acre. The keys are checking the planter from the hitchpin to the closing wheels and making adjustments before and during the planting season. That means you need to inspect all components involved with the seed transmission (chains, sprockets, bearings, idlers and clutch assembly), seed metering and the meter itself. Other factors to evaluate prior to and during planting include the parallel arms, row cleaners, no-till coulters, gauge wheels, disk openers, seed tubes, closing wheels and seed placement.
2) Evaluate disease problems. Corn-on-corn acres are often plagued by disease issues. In our part of the country, south-central Michigan, common diseases include gray leaf spot, northern corn leaf blight and common rust. Gray leaf spot and northern corn leaf blight overwinter on corn residue. Common rust overwinters in the South and spores blow into northern states with the wind. Further west in Illinois and Iowa, Goss’s wilt was a problem for quite a few farmers this past season.
When you select hybrids for 2012, take into consideration the disease pressure you have faced and even what you expect to face in your fields. Hybrid selection is an important piece of the disease management equation that you don’t want to overlook.
3) Effectively manage nitrogen. If you applied nitrogen this fall, monitor your weather conditions during the winter and spring, as nitrogen loss can occur due to poor environmental conditions. Timing and placement of nitrogen are important. Nitrogen programs that split-apply nitrogen at different times (preplant, at planting and sidedress) can help weatherproof your system.
The least expensive form of nitrogen can become the most expensive if it isn’t correctly placed and timed. When the growing season goes against your nitrogen program, pull nitrate samples so you can make the call to go back in and fix those fields or areas that are high-risk.
Back to the Fundamentals of Crop Production
by Phil Needham, Farm Journal High-Yield Wheat columnist
It’s often the basic agronomic and logistical problems that hijack yields. Don’t let that be the case in 2012. Pay attention to these fundamentals.
1) Soil testing. There is a wide range of standards when it comes to the frequency and quality of soil sampling. Some growers split larger fields into smaller management zones and sample them separately, while others can’t remember the last time they pulled a soil sample from their fields. Soil (and tissue) samples are relatively inexpensive and essential to developing a comprehensive fertility program for each field.
2) Planter setup. Despite the fact that most growers have all winter to work on their equipment, there are too many who wait until the week before the planting rush. Start early by determining the necessary planter adjustments and have a professional calibrate seed meters for the seed shapes and sizes that you are going to plant (allow two to four weeks for part orders, depending on workload).
3) Hybrid/variety planning. Take time to analyze the performance of the corn hybrids and soybean varieties you planted in 2011. Couple your results with local trials and research plots to determine which hybrids and varieties to plant next year. Don’t be afraid to try a new hybrid or variety on a few acres as well.
4) Equipment capacity. Lots of producers have expanded their acreage without proportionally upgrading their equipment. Consider your planting window and determine if larger sprayers or planters are justified.
5) No-till benefits. While no-till is not practical everywhere, it needs to be considered by more farmers as a tool to reduce passes and compaction plus significantly cut fixed costs and labor requirements per acre. No-till can also improve soil quality, reduce soil erosion and increase yields, especially in lower-rainfall areas or areas that miss out on timely rainfall during the hot summer months (which includes most areas of the country).
When it comes to no-till equipment, setup is especially important. There are producers out there who have not been successful with no-till, primarily because they wrongly assumed they could use the same management practices that they used with conventional tillage with the no-till system.
6) Labor and training. Skilled labor is becoming more and more of an issue, especially as planters, sprayers and combines become more complex to operate. Make sure your workforce
attends training events hosted by local machinery dealerships.
Protect Profit Margins while the Getting Is Good
by Bob Utterback, Farm Journal Economist
As I look to the 2012 marketing season, three dominant themes come to mind: 1) Expect the cost of inputs, such as cash rent, fertilizer and interest rates, to be firm to higher. I suggest locking in inputs as fast and for as long into the future as possible. 2) The global macroeconomic picture will be increasingly fluid and difficult to predict. 3) The U.S. dollar is likely to come under pressure.
In the short term, these three factors will benefit agriculture prices until demand is negatively impacted. I believe political pressure will result in inflationary pressure. Since 2012 is a presidential election year, I would not be surprised to see the administration make every effort possible to stimulate economic activity regardless of cost.
It has been said that "the trend is your friend." Right now it appears that corn, soybeans and wheat are balanced. Both the bulls and bears are weary and taking a break, but they will resume their annual struggle soon. Expect grain prices to rally based on seasonal pressure in April and May to assure adequate planted acres. Will there be new highs in 2012? I believe it will occur only if we see a major yield reduction event.
My biggest concern is that producers filled their grain bins to the brim, hoping for a return of 2011 summer prices. The market cannot be squeezed for long, so be cautious if you go this route.
Long-term, I am concerned about what will transpire from 2013 through 2016. Remember the market commotion from 1981 to 1985 (after the 1974 to 1980 time period)? If we get a weather scare event in May or June, use it to sell expected multiple-year inventory at a profit.
While the grain sector has enjoyed price volatility, the cattle market and, to some degree, hog market have enjoyed a strong, consistent rally since 2010. I see limited excitement about herd expansion, which is as bullish as it gets.
My biggest worry is how much higher cattle and hog prices can be pushed before consumers revolt. Up until now, domestic and foreign demand has been strong enough to support sharply higher values. It is time for livestock producers to think about floor protection, such as a long put on violation of support. I wouldn’t get too excited about selling futures or cash, because the price trend is still positive. It is a good idea, though, to lock up profits for as far into the future as
cash flow allows.
I strongly believe that only so much profit will be allowed. The objective for now and in the short term is to protect profit margins against what could be volatile and negative macroeconomic
influences from 2013 to 2016.
A Positive Spin on a Gloomy Situation
by John Phipps, Farm Journal John's World columnist
Due to the U.S. election and turmoil in the European Union, the world will be anxiously debating various political and economic predictions in the year ahead. As was demonstrated by Philip Tetlock in his rigorous statistical study Expert Political Judgment: How Good Is It? How Can We Know?, these predictions will be useless. His conclusion—that the more well-known and widely quoted a seer is, the less accurate his predictions—will be verified. And ignored. We will be buried in prophecy and especially warnings of doom.
After four years of economic malaise, more coping mechanisms will appear throughout our culture and economic system. Farmers will be forced to make fewer adaptations, but they will be affected by their linkages to non-farming family and friends. The coming year could therefore be the year many farmers slightly cut back on whining about their problems.
Technology will finally be seen in the cold light of reality as the people-replacer it truly is, and more producers will wonder if they are a potential "replacee." As a result, user manuals will be cracked open for the first time, and hands-on training seminars will become wildly popular.
The percentage of features actually used on cellphones will slip below 2%, even as more users text and master up to three apps. Meanwhile, the amount of time spent playing Angry Birds will rise from 200,000 person-years (a real number) to more than 1 million.
The number of small wineries will mushroom, until one of every three wedding receptions is held at a vineyard bistro. Weddings themselves will supersede auto manufacturing as an economic
activity, just below political lobbying.
To the surprise of most, ordinary courtesy and civility will flourish as anger and outrage are simply exhausted and hassle-avoidance becomes a priority. In short, things might not get much better in 2012, but we will.
Machinery Technology Takes Center Stage
by Dan Anderson, Farm Journal In the Shop columnist
Kinze Manufacturing opened the door in 2011 to the next big thing on the mechanical side of production agriculture when it unveiled robotic driving systems designed for tractors. The first response from farmers was, "Why? I like to drive tractors." The second response was, "Hmmm. Maybe …" The third response was, "How much will it cost?"
American agriculture is primed for this next phase of automation. Many farmers have already invested in the GPS- and auto-steer-related hardware necessary for remote-control farming and have years of hands-on experience with the intricacies (and frustrations) of precision farming technologies. Once basic questions about how well robotic tractors dodge mudholes, rocks, tile blowouts and other unexpected field obstacles and the legal liabilities of "robotic tractors gone wild" are answered, farmer acceptance might be seen as an evolutionary step rather than a revolutionary leap.
On the other end of the precision farming spectrum, many farmers who have dragged their feet to get onboard with yield monitors, autosteer, swath/row control and other precision farming systems will finally discover what their neighbors have been talking about. Profitable commodity prices in 2011 encouraged a lot of equipment trading, and the early generations of tractors, combines and other equipment equipped with precision farming technology are waterfalling down through the used equipment network. Folks who swore they’d never give up driving their own tractor will discover it’s more fun and relaxing to ride than to drive.
In 2012, farmers will begin to learn the cost and complications associated with exhaust filters, exhaust regenerating systems and all the technology necessary to meet the Environmental Protection Agency’s (EPA) Tier 4 exhaust emission guidelines. We got used to the expense and hassles associated with EPA gadgets and gizmos on our cars and pickups—I guess we’ll get used to them on our tractors and combines.
A more subtle shift on the mechanical side will continue to expand in 2012 as farmers tackle fewer repair and maintenance jobs on their farm equipment. Computerized engines, high-tech electronics and the need for specialized diagnostic and repair tools are slowly eroding the ability of farmers to work on their machinery. Oil changes and basic nuts-and-bolts maintenance and repairs will always be a do-it-yourself option, but the days of farmers "splitting" their own tractors and replacing clutches are probably history.
- December 2011