Nebraska corn grower Roy Smith reflects on things he thought he'd never see...
I got the check for my last increment of 2007 corn today. It was sold for $7.12 per bushel last Friday. The bins are clean. There is no more corn to sell just in case the price goes higher. I can add $7 cash corn to the list of things I thought I would never see in my farming career.
This year marks 40 years of farming for me. When I began, corn was $1, soybeans were $2.50 or less. Nitrogen was about a dime per pound. We did not use any phosphate or potash. Herbicide use was limited, but the total cost of weed control was less than $10 per acre. It usually included one cultivation.
About four years later the price of everything escalated. By 1973, the normal price for corn was over $2 and soybeans $5. Of course, input prices went up accordingly. By the end of the 1970s we were no better off than we had been with lower prices. This assumes that land prices rose accordingly. For those who owned their land the situation was somewhat better then for those of us who rented.
I always figured that the move to higher plateau was a once in a lifetime event. Now it appears that was not the case. The situation today has a lot of similarities to the economic shift of 35 years ago. At least today I have my small land base paid for so I am not affected by land inflation.
Besides the price of corn today, I did not think I would ever see 200 bushel per acre dryland corn in eastern Nebraska. In 2004 I had a field that went over 225 bushels across the scale. I did not think I would see gasoline at $4.00, but it is there. I wonder what the next shock will be?
When I began farming I set a goal for what my net worth would be when I reached age 65. When I reached that birthday, I had achieved more than double what I had set for a target in 1968. However, I have some neighbors who are paying $5000 a month for nursing home care. What I thought was a secure retirement may not be so secure after all. I think I will just farm until I drop and save all of that money for long term care.
It is hard to see what might happen in the near future, let alone in the long term. I sold the last of my corn this week for three reasons. First, for the past several years it has been my policy to have everything priced by July 1. This strategy has saved me from a lot of grief over the years because at some point every summer the trade stops focusing on old crop and looking for new crop. When that happens, the price usually drops. Secondly, the talk of the government changing regulations on commodity speculation is seldom positive for grain prices. Any such action will eventually have a depressing effect on prices.
Third, the Fourth of July weekend has frequently been a turning point for grain prices. Sometimes prices turn higher. More often they turn lower. That is especially true when there has been a sustained rally in June. With prices where they are, the risk of holding through the long weekend is greater than if prices have been working lower through the past month. At any rate, I can brag about selling $7 cash corn for a while! If prices continue higher, I have all of this year's production to sell. Right now the crop prospects on my farm look very good.
This year marks 40 years of farming for me. When I began, corn was $1, soybeans were $2.50 or less. Nitrogen was about a dime per pound. We did not use any phosphate or potash. Herbicide use was limited, but the total cost of weed control was less than $10 per acre. It usually included one cultivation.
About four years later the price of everything escalated. By 1973, the normal price for corn was over $2 and soybeans $5. Of course, input prices went up accordingly. By the end of the 1970s we were no better off than we had been with lower prices. This assumes that land prices rose accordingly. For those who owned their land the situation was somewhat better then for those of us who rented.
I always figured that the move to higher plateau was a once in a lifetime event. Now it appears that was not the case. The situation today has a lot of similarities to the economic shift of 35 years ago. At least today I have my small land base paid for so I am not affected by land inflation.
Besides the price of corn today, I did not think I would ever see 200 bushel per acre dryland corn in eastern Nebraska. In 2004 I had a field that went over 225 bushels across the scale. I did not think I would see gasoline at $4.00, but it is there. I wonder what the next shock will be?
When I began farming I set a goal for what my net worth would be when I reached age 65. When I reached that birthday, I had achieved more than double what I had set for a target in 1968. However, I have some neighbors who are paying $5000 a month for nursing home care. What I thought was a secure retirement may not be so secure after all. I think I will just farm until I drop and save all of that money for long term care.
It is hard to see what might happen in the near future, let alone in the long term. I sold the last of my corn this week for three reasons. First, for the past several years it has been my policy to have everything priced by July 1. This strategy has saved me from a lot of grief over the years because at some point every summer the trade stops focusing on old crop and looking for new crop. When that happens, the price usually drops. Secondly, the talk of the government changing regulations on commodity speculation is seldom positive for grain prices. Any such action will eventually have a depressing effect on prices.
Third, the Fourth of July weekend has frequently been a turning point for grain prices. Sometimes prices turn higher. More often they turn lower. That is especially true when there has been a sustained rally in June. With prices where they are, the risk of holding through the long weekend is greater than if prices have been working lower through the past month. At any rate, I can brag about selling $7 cash corn for a while! If prices continue higher, I have all of this year's production to sell. Right now the crop prospects on my farm look very good.
