Even though their attention is focused on this year’s harvest farmers are thinking about 2012 and beyond, says Brent Griffin, Prairie County Extension staff chair for the University of Arkansas Division of Agriculture.
“When the combine starts to run, a lot of decisions are being made for future growing seasons,” he notes. “We have folks farming today making plans as far out as three to four years, not even knowing if they will survive the current year.”
Among the challenges: higher fuel prices, higher fertilizer prices and a very volatile commodity market. There are additional pressures to make decisions earlier – prompted by discounts from seed companies and the need to lock in fuel and fertilizer prices before they move even higher.
“Discounts are offered if farmers will lock in a particular seed variety by an early order date, usually Nov. 1,” Griffin notes. Such discounts will vary from 5 percent to 20 percent, depending on the dealer.
“Then you have to throw in the early pay -- or cash discounts -- or special financing terms offered to further entice growers,” he says. “All this being said, the producer is locked into next year even if commodity prices fluctuate.”
“Commodity prices really collapsed in September,” said Scott Stiles, University of Arkansas Extension economist. USDA’s Supply/Demand and Crop Production reports released yesterday now shed more light on what to expect.
For farmers it’s a market gamble and they need a good line of credit to make it all work. “Farmers today are more mindful of break-even commodity prices and forward contracting,” Griffin says. “A few hit a home run and a few strike out.”
But, crop farmers can obtain help from the agricultural economists, such as those at the University of Arkansas. Online crop budgets can help growers plan for the future.
“Crop enterprise budgets for 2011 are the culmination of a two-year effort to provide enhanced services to producers,” says Archie Flanders, assistant professor-agricultural economics for the University of Arkansas. “The new program combines skills of state and county faculty to provide economic analysis to farm operations which was previously not available at the individual producer level.”
For more information on crop production, contact your county extension agent or click here.
For information on crop budgets, click here.
Source: University of Arkansas Division of Agriculture