It was snowing this morning when I hit the morning air with my usual exuberance on my way to attacking the standing corn. For some of you in Western Canada that might not be too unusual, but November 13th in southwestern Ontario it’s quite a stretch. In fact across the greater corn belt Arctic temperatures have come very early. I guess it is just my turn.
It just so happens that there was just enough snow on the corn stalks to make it miserable to pick. As every farmer knows who has picked corn in the snow, sometimes it will go inside your combine and at certain temperatures glaze things over. At a certain point you start throwing more corn out the back and that defeats the whole purpose. Let that temperature raise a few degrees and then everything works. It is just another thing in 2014, which has gone wrong. However, with all the trouble I’ve had in 2014 it certainly has been a learning year. The question is what did I learn and how can I fit that into my management decisions for future years.
I think from a marketing perspective what I learned the most was that rain doesn’t necessarily make grain. In 2014 we had a very cold summer in Ontario and Québec. However, this translated into a moderate summer for the greater corn belt, which translated into record corn and soybean crops. In the past few years’ American corn production has actually been going down, except for last year and this year. Temperatures above 80° at night have been part of their problem. So along comes the summer of 2014 when it’s cold in Ontario but moderate in places like Illinois. That has translated into a 200-bushel plus average corn yield in 2014 for Illinois. Ditto for much of the US corn belt. As they always say, everything in moderation including temperatures and rainfall. Is certainly lead to good things on the production front.
Of course it has also sent prices down, but one thing that I have learned this year is that there can be an October rally in grains. Seasonality is important and it looks like grains reached their lowest in early October. Added to this was a Canadian dollar that has been dropping into the 87 and $.88 cents range. This has mitigated much of the price drop and taught us once again, that nobody knows what the price of grain will do. For those especially in Canada who feel they know what futures will do, Canadian grain basis price discovery will often surprise you. 2014 has certainly being a laboratory for that. Across Ontario and Quebec, the increase in cash grain values because of the drop in the Canadian dollar surprised many who hedged the futures earlier.
I’ve often said that managing our grain marketing risk takes daily market intelligence. Standing orders for grain are great tools, but they are not the only tools on the farm that makes us successful. This past year I found the increased use of fungicides as well as guidance equipment on my farm aided me greatly in the management process.
I ended up with the highest yield in wheat on one particular farm that I had ever achieved. I credit this to good soils but also to a doubling of fungicide application at a couple of different times. It’s certainly interesting for wheat, but what we are finding in Ontario this year fungicide application is leading to huge yield gains in corn. Yes, it is probably about 2014 being somewhat wet that fungicides helped. However, it is something to put in your back pocket for next year, even with lower prices for corn fungicides may becoming an even greater management tool to increase revenue.
On my farm I did several things new this year based on my adaptation of guidance equipment for planting and harvesting. I don’t steer anything anymore. Yes, my row crops our rifle straight and having the ability and to do that has enhanced my machinery management and my greater efficiency. It even makes me feel better at the end of the day, which as I grow older is increasingly rewarding. As I look to the future, that technology alone should foster even greater efficiency, while boosting crop production. So with more production, it brings you back to the daily market intelligence. No matter how well I marketed my crops this year, in 2015 it’s a new day and I need to do even better.
So these are just some of the things that I learned from my experiences in 2014 on the farm. The challenge for all farmers is to do the same exercise on their farm. Geography may mean that your challenges are much different than mine. Who knows, I’ve got 125 acres of corn left to go and when the snow melts, I may learn a few more things. Now, back to that daily market intelligence. With the bears on the run, at least for the moment, I’ve got to get back to hedging my bets.