Like a lot of farmers in my area, I can say our yields were better than expected in 2017. “Better than expected” is a tagline I’ve heard from many farmers. As I reflect on harvest, I’m trying to pinpoint why yields were better than we thought. I’ve concluded that it was a combination of early planting, cool July weather, and rains at the right time. We didn’t have record yields, but yields were good across most farms. I also think we better managed our dry fertilizer and nitrogen applications. As much as we like to think we are in control of final yields, Mother Nature is really the key.
I’ve written several times this year about how the economics pointed toward planting more soybeans. We did, in fact, plant more soybeans in 2017 and also marketed a big percentage early in the year. Selling early was a good move, but I wasn’t prepared for an 80-cent soybean basis swing during the first month of harvest. I learned some hard lessons about basis risk and managing basis in the future.
I’ve also written about cover crops. It seems like people are on one spectrum or the other about cover crops; cover crops are either ridiculous or the best thing since sliced bread. We transitioned 25% of acres to cover crops in 2016, and 70% in 2017. The neat thing about farming is that you can raise a crop using a dozen different tillage methods. But, on our farm, we see some short and long-term reasons to use cover crops.
Crop marketing brought its own challenges, which included falling futures prices, low basis levels, and not much carry in the market. I contribute low futures prices to big production nationwide coupled with bearish USDA reports. I can’t do anything about these prices, but plan to sell grain from the bins when we either need revenue for cash flow or prices reach my target levels. Some inputs have dropped for 2018, and we are planning to move forward into 2018 cautiously optimistic.
The opinions of the author are not necessarily those of Farm Futures or Farm Progress.