Farm Management Minute: Counting our blessings
As 2014 draws to a close, we need to count our blessings. In February, a new farm bill was signed into law which will continue to provide subsidized crop insurance and a financial safety net for ag producers. Throughout the spring and summer, most areas had adequate moisture and were able to produce above average yields. Though grain prices dropped, there was still ample opportunity to sell grain at a profit. Livestock producers were blessed with all-time high prices for hogs, feeder and fat cattle. And some of you will even be blessed with an income tax problem this year, which you may not agree, but I would argue that this a good thing! And for those of you who got the opportunity to work day in and day out with a parent, child, or spouse in your operation, then you are truly blessed.
So after we get done counting our 2014 blessings, what’s next? There is still counting to be done in 2015. I believe that you can count on it being a tighter year, for both livestock and grain operators. It appears that the livestock market should still be strong, but probably not at the levels we saw in 2014. Grain margins will be tight, so you need to know your expenses and have a marketing plan in place. In regards to marketing, you can count on another year of volatility and moving prices. I cannot stress enough the importance of making a plan of when and how you plan to sell or protect the commodity. If you don’t have a plan, I think you can count on being disappointed just as you were in 2014 if you had not forward contracted any grain.
Finally, you need to count on managing your farm or ranch better than you have in the past to be successful in 2015. Though things will be tighter, there will still be opportunities to be profitable. To do this, you will need to make timely and educated decisions based off your numbers from your operation. Just to be clear, I said numbers from your operation, it does not matter what your neighbor says or does, you need to know your numbers.
At the South Dakota Center for Farm Ranch Management at Mitchell Tech, we have instructors who work with farmers and ranchers every day to help them keep accurate records and then use the data to make decisions. If you would like more information on how you could work with one of these instructors, please contact us at 605-995-7196 or firstname.lastname@example.org.