Delaware Farmer's Forecast: "I'm Not Scared of 2018"

January 22, 2018 12:07 PM

Farming in Delaware has its own set of challenges, but local farmers are discovering diversity is key. TJ Schiff owns a country elevator, farms corn, soybeans, wheat and barley, while owning and operating a feedlot. He’s also invested in residential housing.

While diversity is helping him weather the financial headwinds, big yields in 2017 also helped provide financial cushion this year.

“I would say yields in 2017 we're a saving grace,” said Schiff, a farmer in Harrington, Del. “We had a super soybean crop, and that brought cash flow to farmers that was really an unknown on where that was going to come from.”

Standing outside Schiff’s elevator and seeing the bustle or trucks moving grain is proof that despite bigger yields, demand remains strong

“We're basically a community that supports a chicken industry,” said Mike Asche of Atlantic Tractor Company. “Pretty much all of the corn, which we’re a big corn growing area, goes to the poultry industry.”

The biggest challenge of farming in the DELMARVA area is the size of farm fields.

“I would think you could easily say our average field size is 30, 40 to 50 acres,” said Schiff. “

It’s the need to cover a variety of acres spanning over several miles creating demand for large horsepower tractors.

“I think the 8000 series tractors have brought a lot of versatility,” said Schiff. “They can do the small job and on other days they can do the big job, and that's been important to us.”

It’s that type of equipment driving business for Atlantic Tractor Company, an equipment dealer that’s footprint spans across Maryland, Delaware and Pennsylvania.

“Large row crop tractors are critical for us,” said Asche. “Farmers in this area use large row crop tractors 12 months out of the year.”

The need for larger equipment hasn’t changed, but how often a customer chooses to upgrade has evolved the past few years.

“For customers that were trading combines every year or every two years, they're used to 1,000 or less hours,” said Asche “Now they've run them for three or four years, and they're in the 2,000 range, and those customers are starting to think about upgrading to either a lower-hour used one, or they want to get back in the new cycle to get those hours back down.”

It’s the surprisingly strong finish to 2017 that has the interest of Machinery Pete.

“The one thing I'm wondering about is if and when the price of corn does go up just a little bit, it's almost like we've set this pressure valve to pop,” said Greg Peterson, host of Machinery Pete TV. “That will be new sales and used sales, so until that happens, it's still a great opportunity to upgrade.”

Search traffic for planters on Machinery Pete’s website was up 25 percent during the months of November and December. However, for someone in the market to buy, he says it’s still a good time to take action.

“Used planters, there’s a lot of them out of there,” he said. “Values are a little bit softer, although I would say the summer picked up a little bit, and a large tillage up over 50 foot, there's some really good buying opportunity there.”

While the story of 2018 is still unwritten, used values continue to find solid ground.

I think we're two years into used value stabilizing,” said Machinery Pete. “As we look ahead, I would say probably a continuation of that.  We tend to see in the middle of the year—from about St. Patrick's Day through October—values tend to weaken a little bit, so if you're looking to buy, that would be maybe the time to do it.”

That slight optimism is creating a better outlook for equipment dealers and farmers.

“I see both as a grain buyer and as a producer we're having opportunities to lock in grain prices that work in our area,” said Schiff. “The prices either guarantee a breakeven or a profit. So, I think if you know your true costs and know when you’re ready to sell based on their financial situation, there's opportunity there. I'm not scared of 2018.”  


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Spell Check

bad axe, MI
1/24/2018 06:44 AM

  He'll be scared when the government crashes the stock market to take the equity out of that to start to pay down on the FED's part of the 70 trillion dollar credit market debt. Trump is going to Switzerland to tote America First that's only because last October the IMF and the World Bank gave China preference as the world's reserve currency. The dollar wright now is free falling in value because of this and our crop prices aren't rising I would be scared . 70 trillion in unserviceable debt I would be scared , that's a lot of why were 70 trillion in debt is because of our arrogance as a society.

Eastern, NE
1/24/2018 09:00 AM

  This individual also owns an elevator. I remember an elevator operation in my area. Farmers were struggling, but the elevator wasn't. The owner was screwing his customers. While farmers were selling out, he amassed quite a land holding to which his descendants still live quite comfortably today off that land. The elevator was sold when more competition arrived. The guy in this article is more diverse than most and has better control over his prices than the average farmer.

m s
cambridge, MD
1/24/2018 07:11 AM

  Being in the residential housing business has nothing to with agricultural farming. Residential housing? Few farms have this kind of sideline to subsidize their ag operation. Many farms are doing their best to make a go of it in these tough times with only ag production. They live conservatively, buy wisely & sell at better prices. That kind of business behavior is what really needs to be respected. Don't confuse a positive ag future with some other successful operation.


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