There’s no question the markets are faced with uncertainty as the trade war with China marches on. Still, three Iowa State (ISU) economists say there’s no need to panic, but to instead plan ahead to find profitable marketing opportunities and make sure there’s open lines of communication with your farm’s key stakeholders.
“When we're looking at a time like this where we have been delayed in the field for a little bit here, [it’s] a good time to sort of sit down and think about ‘Okay, what do I need to be doing marketing wise,’” Chad Hart, ISU economist told U.S. Farm Report host Tyne Morgan. “Not only for this year's crop but thinking forward in the next year's crop. When we look at the carry in the markets we've got right now, we do have some opportunities to put in some price protection you know, underneath this year, but more importantly looking forward in the next year.”
Hart says some of the cash bids he’s seeing for 2019 crop are at break even or better.
“Don't panic, but the longer it takes for these trade deals to get done, the more uncertainty there is and the more nervousness there will be about what the markets for the United States look like in the future,” economist John Crespi warned.
According to Steve Johnson, economist, communication with your farm’s key stakeholders is key.
“I think it's important that you're communicating with the input suppliers, your primary ag lenders, and your cash rent landlords,” he says. “That you're open and honest of what your intent is. I think things will be much more positive in six months from now, but again, we need to put this crop away and we need to generate the necessary cash flow. So, the importance of communications and cash flow are key, this fall and winter.”
Rain, Sleet and Snow Affects—Harvest and Prices
Data Drives Customized Crop Insurance Plans