Putting a value on crops in 2000 is difficult to do this far
in advance, but production and financial planning requires that at least tentative decisions be made about what crops in 2000 might be worth, says George Flaskerud, NDSU extension crops economist.
Assuming normal
weather and looking at historical price trends combined with current supply/demand estimates, Flaskerud suggests the following planning prices for the fourth quarter of 2000: Spring wheat, $3.15; milling-quality durum,
$3.35; malting barley, $2.20; and $13 for non-oil sunflowers. For winter wheat, feedgrains and oilseeds, the loan rate is relevant, he says.
Could warm, dry winter spell b-u-l-l?
The same type of winter
that's ruled thus far in 1999/00 was similar to the drier and warmer winter of 1986-87, notes Farmland-Atwood grain merchandiser Don Wille, Minneapolis. And we all know what kind of crop production season followed in
1988. A lack of snow cover in much of the winter wheat growing area, along with up-and-down temperatures, could make things interesting for the wheat market closer to spring. Still, recognize that potential
bulls face a big bear in a wheat stocks estimate of close to 1 billion bushels. "Don't get bulled up, look at the downside risk as well as the upside potential," he says.
Three critical elements to marketing strategy selection
According to marketing expert and ag consultant Joseph Dial, whatever marketing strategy you select, make sure it focuses on three critical elements:
1) Make sure your plan reflects your emotional and financial tolerance for risk. If not you will be unable to exert the discipline necessary to make it work.
2) Your goal should be to incrementally
increase your net worth by securing revenue, in spite of bad weather and/or low prices. Your goal is not to try to predict the weather and to chase commodity prices in the false expectation that such a foolish exercise
will cover your yield and price risks. Remember, waiting to top the market, means you won't!
3) Someone in your family should be using a computer to keep and analyze your financial records and to gain access
to the Internet for valuable information. that will help you develop and implement a written marketing/risk management plan.
Key USDA market reporting dates
Grab a pen and write the following potentially
market-moving USDA reports on your calendar:
Feb. 11 -- Crop prod. and S & D estimates
Mar. 10 -- Crop prod. and S & D estimates
Mar. 31
-- Grain stocks report, Prospectiveplantings report
April 11 -- Crop prod. and S & D estimates
May 12 -- Crop prod. and S & D estimates
June 9
-- Crop prod. and S & D estimates
June 30 -- Acreage report, Grain stocks report
July 12 -- Crop prod. and S & D estimates
Aug. 11
-- Crop prod. and S & D estimates
Sept. 12 -- Crop prod. and S & D estimates
Sept. 29 -- Grain stocks report, Small grains summary survey
Oct. 12
-- Crop prod. and S & D estimates
Nov. 9 -- Crop prod. and S & D estimates
Dec. 12 -- Crop prod. and S & D estimates
