It has been another wet week here in southwestern Ontario with more rain predicted for parts east in Ontario as the remnants of Debbie are coming up from the American southeast. It’s been a year where I’ve had little control over Mother Nature, and it’s been extreme. I often tell my agronomist friends that fertility is about 8th on my list. I say that because drainage is usually the first seven on my list and that’s exactly what we had this year. I’m never very good at growing crops underwater.
That’s not to say that everything has failed this year, quite the contrary. Farmers always face a myriad of risk at the start of the year and usually we employ quite a few new things to try to mitigate that risk. I did that this year with not only different corn varieties but different soybean varieties as well. Needless to say, soybeans don’t like wet feet, but I surely learned this year that some varieties do better than others in these conditions.
As I’ve told you many times, change is our only constant as farmers. Every year, everything is different, and we have to adjust. We still have many of the age-old agricultural economic problems but adjusting to those things along with change is a never-ending battle. Generally speaking, the newer corn and soybean varieties help mitigate risk far more than the old ones. It’s not a perfect correlation but changing to newer varieties is a management path we all need to heed.
Case in point are the yields that we might hear from USDA come Monday when they release their August WASDE report. On Monday we will hear new production estimates of corn and soybeans based on producer surveys, weather data and other harvested acreage data. Forget everything else, but it’s yield numbers we should appreciate. According to the latest Dow Jones survey of 17 analysts we’re looking at a corn yield estimate at a record level of 182.1 bushels per acre and soybeans to come in at 52.5 bushels per acre. Yes, that’s big supply at record levels and part of the reason that it is this way is because we have had changes to better varieties overtime.
Some would argue we simply are in the agricultural productivity trap. In order to make profits at lower prices we engage in technology to make more yield which essentially keeps this cycle going. Needless to say, we keep embracing change to try and find the profitable road ahead in such a lower price environment, such as we have today.
Needless to say, change just doesn’t happen in our production fields. Changing to new varieties is a good thing but we are also engaging in management practices to cut costs and boost those yields even more. For instance, think about autonomy on the farm and how that might change things. I have been a critic of that in its early days but clearly as I get older, I can see it coming more and more. Those drones flying in the field next to me doing some spot spraying was the stuff of science fiction only a few years back.
Generally speaking,” change is our only constant” is looked at as a good thing. For instance, how often have you heard anybody describe changes in agricultural technology as a bad thing? It’s really in nobody’s best interest to say that especially if they’re trying to sell you some. However, changes ahead are not always positive. One of the worst things I find in today’s society is the plethora of dis-information influencing some in society today. It certainly applies to those in agriculture as well.
With the advent of the Internet and social media there is a burgeoning industry of disinformation almost on any topic coming into your smartphones every day. Discerning the truth from the snake oil can be very challenging for some and it will probably only grow larger. Some might argue it has replaced coffee shop talk, but I would argue it’s much more sophisticated and targeted than any of that. Oftentimes, I shake my head with some of the stuff that comes across my desk from readers. At a certain level it will only make managing our farms that much more difficult in the future.
Keep that in mind when you hear the yields that come up from USDA this coming Monday. They likely will be record yields and they likely will shock you with regard to how productive the American farmer has been on a very tough year in some regions. Also, keep in mind that some farmers who hear that think it is actually disinformation from the USDA. Keep in mind that last week I said the big supply is winning in 2024 and these record yield numbers are likely the truth.
At the end of the day, it means we’ll have to change again to try to figure out how to be successful in this bearish market environment. With corn prices a dollar below cost reduction estimates and soybeans $2.00 below cost of production estimates it’s certainly time for a change. However, I don’t know if that change is coming very soon.