Future Money

Future Money

David Sparks Ph.D.
David Sparks Ph.D.
DTN Markets Editor Katie Micik and I chatted about what's going on with farmers in terms of their confidence in the market futures. "Right now in the near-term, this month, next month, to a year out, farmers are saying we have such an oversupply of corn, beans and wheat, especially wheat in the world markets that there is not much chance for a change right now. I think long term, most producers would say they are very bullish about the future of agriculture. You have mentioned an overproduction of wheat, I know there are quite an abundant number of potato acres planted in Idaho, why not change crops to something less abundant? That's a really good question because I think most farmers it depends on their location and the type of soil they have. I think what we're going to see is a lot of wheat growers this year are going to try and look at some alternative crops like sorghum in Oklahoma, Nebraska and Kansas where the land is more marginal and suited for something like sorghum. For a lot of the producers in the corn belt area, it doesn't make sense for them to plant anything other than corn or beans simply because their land is so rich and they can get the best yield on those acres. A lot of the farmers I talk to are saying that their whole strategy this year, even though prices are low, is to be as on top of their inputs as they can, use as few as they can and get the biggest yield they can because for them, a bigger yield per acre, lowers their breakeven cost on that crop and gives them a better chance of making money."
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