Plans are nothing; planning is everything. So goes the famous quote by Dwight D. Eisenhower. Never is that more true than in agriculture. Given the extreme volatility seen in both commodity markets and inputs since 2007–08, it would be easy to throw your hands up and say that planning is pointless. In fact, it has never been more important. Though you may have to revisit plans, the process is valuable in preparing you for whatever the markets may throw your way. That’s why Top Producer is bringing you this special issue focused on planning for 2011.
Inside, you will find articles on a wide range of topics, from short-term concerns such as tax planning, input costs, operating credit and market outlook for the year ahead to longer-term factors such as the next farm bill, land ownership and transitioning your farm to the next generation.
We started the process with a survey on AgWeb.com to find out where producers are in their preparations for 2011. The results appear on this spread. Compare your risk-management status with that of respondents to our October survey regarding locking in prices for the year ahead. You’ll see that some already have locked in the bulk of their inputs; others have locked in zero. Consider the difference in potential profits if you priced anhydrous at $550 to $600 per ton versus a scenario where you could end up paying $800 per ton next spring.
We also share some of the first estimates for 2011 input prices and corn and soybean profitability. Most farmers tell us expected profitability and crop rotations are the two main determinants of what they’ll plant next year.
You may not be able to pinpoint where prices are headed, but you can use scenario planning to identify what “futures” are possible and identify your response to each. In this issue, we have drawn together some of the best minds in the business to rate crops as bullish or bearish and identify possible “black swans”—unforeseen events that could derail current fundamentals.
Finally, as you begin your planning process this winter, use the calendar on page 50 as a reminder of events to attend and steps that need to be taken.
We hope your operation was able to thrive in 2010 and that 2011 will be even better.
Top Producer, Mid-November 2010