Grain Growers Need to Consider Expenses

All of those in the grain growing industry would love to turn back to the clock to the high prices seen from 2007 through 2012. However, as Dr. Dave Kohl, Globetrotting Emeritus ag econ professor from Virginia Tech explains those were very unusual and we are now in a reset period.

Kohl: "Now what we are into is a reset. The reset actually started in 2013-14 but we didn't really feel it. The period of 2016 to 2020 is going to be kind of a reset period. We're going back to net farm incomes of 2002 to 2006 levels. They will not be the aberration of 2007 to 2012."

Dr. Kohl advises grain growers they may need to adjust their operation's expenses to fit this new normal.

Kohl: "This is a cost issue. There is going to be a three-prong attack. One is machinery costs. Number two is going to be family living costs. Number three — I think the year of 2016 is going to be the year of negotiation. Some of these landlords are going to have to give. Developing a win-win negoation particularly on land rents so you can be sustainable and eek out a profit 2016 to 2020 — those are going to be three primary strategies."