2022 Spring Farm Outlook

Page 4 Spring 2022 Logan County Farm Outlook LINCOLN DAILY NEWS March / April 2022 Spring 2022 Logan County Farm Outlook LINCOLN DAILY NEWS March / April 2022 Page 5 A nother year has passed, and it’s time to once again reflect on the past year and look forward to the year we are in. Uncertainty continues to follow us. If it isn’t a virus, it seems like it is literally an invading army. We are certainly finding out what a global economy we have collectively created. We are also dealing with the greater uncertainty of weather trends, and how they impact timely field operations. Our vocabulary is also increasing almost daily. We still have the covid virus with us, and the numerous variants with it. “Supply chain issues” has become one of those phrases which has been born out of the pandemic. Lay the blame on the supply, or the delivery, but the endresult is a lack of products available for purchase, orthe lack of goods to purchase at a reasonable price. Sure, the crop prices have risen dramatically, but so have expenses. The U of I crop budget updatesfor 2022, from Gary Schnitkey, show $1090 in total income for corn per acre, with non-land costs of $770. This would leave $320 per acre for land costs and operator profit. Take the land cost out, and there isn’t much left for the operator profit – if anything. Soybeans look slightly better with $376 for land cost and operator profit. Fertilizer, pesticides, and seed make up well over half the cost of producing the crop for both corn and soybeans. With the increase in crop prices, there has been a runup in both land costs and in the 2022 Spring Farm Continue 8 associated rents. Another contributing factor would definitely bethe lack of return on other investments such as CD’s, and this factor tends to bring in investor money to purchase farmland. Land values, and cash rents, typically trail the economic climate in agriculture by a year. This means the current prices for land and rent are more based on last year’s income potential than the current year. Technology remains one of the driving forces in agriculture. As an industry, we continue to substitute technology and machinery for labor. Improvements in efficiency continue to drive the increase in size of many farming operations. We continue to increase the size and capability of our equipment. Newer trends include more crop scouting technologies such as fertilizer application based on foliar analysis, increased use of drones in scouting applications, and sensors used in herbicide applications. As technology in equipment has increased, and the labor market has grown exceptionally tight, the availability of certain farm equipment has become very tight. Many advanced machines are a year out on an order basis. This is very similar to the auto market, but on a much costlier basis. Most producers are always looking for a way to increase efficiency. One of the methods to do this is to contract things out. In this case, many of the local suppliers are providing some of the labor for the farming operation. Of course, this also helps the supplier bottom line. Common examples go from simple things like delivering products, to the application of products such as herbicides. Increasingly there are more items such as custom ammonia application, soil sampling, and crop scouting. In reality, this is a way for a group of producers to share the labor of an experienced person. As we look to the coming year, there are many questions. The seasonal outlooks from the National Weather Service have our area in a “leaning above average” area for temperatures. We are also on the edge of one of the only areas in the country to have “leaning above average” for moisture.Timely planting is the first part of being on the way to a good crop. Preferred planting times are now in April for both corn and soybeans, and timely planting is the first step toward a good yield in the fall. The cost, and supply, of inputs we depend on is very unpredictable at this point. Everyone is hopeful these issues will be resolved, but most are planning on disruptions and higher costs. The farming community will probably once again have to prove their resourcefulness and adaptability. We all look forward to having a safe and productive spring season.