In our weekly series From the Furrow, host Mike McGinnis and fellow grain geeks shed light on current market conditions and how grain producers can take action to manage their risk.
This week, Mike is joined by Doug Martin, co-owner and operator of Martin Family Farms. With improved seed technology, do optimum planting dates still matter? How does this year’s planting activity stack up against 2023? And what new challenges are corn and soybean producers facing as they head into growing season? Mike and Doug discuss those topics and a whole lot more.
Questions or comments? Topics you’d like to hear us discuss? Contact us at Insights@Ever.Ag.
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00;00;00;13 – 00;00;15;00
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00;00;16;22 – 00;00;39;04
Hello and welcome to From the Furrow, brought to you by Ever AG Insights. Each week we talk with subject matter experts on news and topics affecting the grain markets. I’m your host, Mike McGinnis, and we get started today with a review of the markets. It is May 7th, 2024 and July corn is down a bit at 470, the July soybeans down a half of a cent at 1248.
00;00;39;11 – 00;01;04;21
Meanwhile, July wheat up a penny at 649. In the past ten days or so since April 30th. July corn has added $0.14 and July soybeans has added $0.85. So we’re seeing an uptick in the markets finally, or at least some volatility moving in these markets. That hasn’t happened for quite a while. New crop soybeans at 1227. New crop corn is trading around 491.
00;01;04;21 – 00;01;20;22
It has reached near $5 in the last couple of days. That’s your market update. Our guest today, Doug Martin, a farmer from Mount Pulaski, Illinois, will appreciate this movement in the markets because we haven’t seen one for quite a while. Doug. Thanks for joining us today. Hey.
00;01;20;22 – 00;01;21;17
No problem. Glad to be.
00;01;21;17 – 00;01;44;15
Here. You bet. You. And we’re going to go right to the furrow. We’re going to get some ground truthing here, so to speak, with a farmer, a real live farmer that is battling all the elements this planting season. First off, Doug, describe for us and for our listeners the planting progress on your farm in Illinois, in your county and in your area, how it’s going this year versus last year.
00;01;44;19 – 00;02;00;22
We’re off to a really slow start. So we were super dry all winter, early spring, March. You know, we were able to do a little odds and ends field work stuff in March even though it was cold, you know, leveling off some ground or whatever you had to do. And then it’s turned wet and cold in April and it’s still wet.
00;02;00;22 – 00;02;24;11
It’s warmed up now, but so last year we finished our planning on May 1st with everything. But as we sit here today, we are about 80% done with our being planning. And then we basically haven’t platted any corn. So we planted one small field yesterday that had been pattern tiled before we got some more rain. But there’s a lot of guys that haven’t done anything around this area, so it’s, slow, slow start to the 24 growing season.
00;02;24;12 – 00;02;54;26
That’s right. You’re not alone. The USDA crop progress report numbers for Illinois showing that 32% of the corn has been planted. However, that compares to 64% last year. So just half of your progress this year compared to last year, and on average, around 41% planted there in Illinois, of course, or the country, the 36% of the crop has been planted as of this week, and that is ahead of last week, but behind a five year average of 39%.
00;02;54;29 – 00;03;09;20
And then for soybeans for the nation, we are 25% planted. That is ahead of last week’s 18% and slightly ahead of a five year average. But in Illinois, and I’ve heard this from others, Doug, that your area is the wettest in the country.
00;03;09;21 – 00;03;25;08
Yeah, I firmly believe so. You know, we have a lot of flat black ground around here and years like this that’s not tiled. It’s too flat. We get a lot of ponds and our creeks and streams were flooded outside the banks here last couple weeks. And it’s been, some Facebook memories popped up in the last time that happened.
00;03;25;08 – 00;03;37;21
And it was four years ago. So we’ve had a couple pretty good years, and then we’re battling the elements again this year. So a lot of a lot of weed pressure coming in the fields, even the ones that had some fall burned out on them and then just a struggle to get things going here.
00;03;37;21 – 00;03;55;21
So yeah, and those are the ripple effects of people don’t really pay attention to or, you know, it’s hard to get in, to spray, to get to plant, but also to control the weeds. It’s still too many. You have some fields that may have some heavier soils that maybe you can get into, but give us a feel for your attention on optimum planting dates.
00;03;55;23 – 00;04;07;05
You know, we hear a lot of people say that because of the seed technology and its improvement so much that some feel the planting dates are not as important anymore. How do you feel about this idea?
00;04;07;06 – 00;04;21;03
You know, we’ve switched to plant beans more first last couple of years. And it’s really we think benefited us and we flip flop to plant corn later. We’ve just seen where the yields have been better. We’ve just kind of switched how we do things going that way. Does that make sense?
00;04;21;04 – 00;04;41;04
Yeah, I know that they’re still very important for a lot of people, but the idea is that, you know, because the seed technology has improved, it can handle some more stress, maybe toward the end of the season. And I think that’s where maybe the point comes in. But you do see a lot of folks still following those planting parameters now so far this year.
00;04;41;05 – 00;04;56;07
Tell us, Doug, what are your biggest challenges? I know I’m going to list a couple off. you can either choose these or others, but you know, your pricing inputs. Have those been your biggest challenge or getting the crop in that you had planned and have your acreage splits change due to the wet planting season?
00;04;56;07 – 00;05;14;23
So I’ll start off with the inputs. A lot of those were purchased, you know, last fall when we had higher grain prices. So a lot of those were locked into. And so we’re kind of dealing with those combined with the market drop. So that’s kind of the financial and it’s kind of a challenge right now hoping that we can get back to a profitable level on the market.
00;05;14;23 – 00;05;33;26
And then on top of that, now trying to produce the the crop so we can have the bushels to to make that all work. So it’s kind of a combination of things right now. This last couple days, market rally has been nice. Hoping we don’t give it back, but we still like to see build from here. So there’s just, you know, a lot of challenges this year.
00;05;33;26 – 00;05;35;02
It looks like you’re shaping up.
00;05;35;02 – 00;05;42;01
And are your acreage splits changing yet due to this wet planting season, or you’re still maintaining your same plan going into the season?
00;05;42;08 – 00;05;53;26
Yeah. Not yet. You know, with the increase in corn yield, we’ve seen maybe from planting a little bit later in the last couple of years, we’re still sticking with our rotation and probably will until we get up to the 1st of June or so. Then we’ll see where we’re at then.
00;05;53;26 – 00;06;11;20
Well, let’s switch from the field to the markets. We’ve talked about this before, but your local basis markets may have to do a little more work this year to get some of this corn and some of the beans out of the hands of farmers. Could you explain how this year, as far as basis is different than last year?
00;06;11;23 – 00;06;32;05
Yeah, basis as well. The last two years has been pretty standard. I’d say right now, you know, we’re we’re forecasted as well right now looking ahead to fall. Things are pretty normal forever at this time of year. And you know, two years ago man, we had some really good basis in this area. You know, you were bidding up well over the futures price on a lot of things and a lot of to do some good marketing for a couple of years.
00;06;32;05 – 00;06;42;26
But now we’re kind of flip back this year where we haven’t sold ahead as much as we wanted to and or have traditionally have. And we’re just kind of taking a wait and see approach, I guess, to see what happens here as we go through the growing season.
00;06;42;26 – 00;06;54;15
And I know that you sold a lot of your grain last fall across the scales. That was making it one of your best marketing years in a while. How do you approach a year like this one? That appears to be much different price wise.
00;06;54;20 – 00;07;10;23
Yeah, we don’t know. Yeah, we’re taking it day by day. And actually my brother Derek just hopped in here and we’re we’re heading up to a little marketing meeting with one of our grain merchandizers now. And so we’re, we’re we’re working on that. So things are, you know, close to being at a break even or a little bit of profitable level if we can raise a good crop.
00;07;10;23 – 00;07;24;21
So we’re probably going to start implementing a few sales here if things continue to trend positive. But, you know, there’s a lot of factors that go into that anymore that, you know, the cost of storage. And now with higher interest rates, the cost of borrowing money and interest. So there’s more than just holding on to the crop anymore.
00;07;24;21 – 00;07;38;04
So we try to take all those decisions and to figure out what the best way for us to go is, even though it might be at a price we want that we know that there’s a lot of extra costs that are not always talked about, or you don’t always think about when you’re forecasting your cash flow.
00;07;38;04 – 00;07;44;14
But lately, the markets have rallied. Do you, your neighbors and other farmers that you talked to see? This rally is one to sell into.
00;07;44;19 – 00;08;01;26
I think there’s a lot of guys that have a whole crop are probably selling into some of this new crop. Guys, I don’t think I don’t know, you know, it’s everybody’s kind of in a little bit of different situation. But I think, you know, traditionally after you have a couple good years like we did and you have such a price drop, I think traditionally farmers are going to try to hold on for a little bit better price.
00;08;01;26 – 00;08;04;24
So I would think if there’s anything done right now, it’ll be very minimal.
00;08;04;29 – 00;08;23;21
Yeah. The new crop beans again, as we mentioned earlier, trading around 1227. New crop corn at 491. And I think the new crop corn contract actually hitting around $5 noon the last couple of days. But you’re right, you’re probably seeing a lot of people taking that wait and see attitude. Where do most crops go from the Mount Pulaski, Illinois area?
00;08;23;21 – 00;08;29;00
Doug. Ethanol plants, processors, river terminals, local buyers give us a feel for where the crops go.
00;08;29;06 – 00;08;45;12
I’d say the majority of our grain goes into a dam in Decatur, Illinois, and a few other markets. Some local vendors. If you’ve got a good rail set up, we’ll go hit some feedlots down South Texas and even into Mexico in some cases. So it just depends on the bed and what the elevators are doing with their railcar system.
00;08;45;12 – 00;08;49;29
But so that’s pretty much it. Most of it goes to Decatur, but a lot of it some of it goes to down south.
00;08;49;29 – 00;09;32;29
While the reason I ask is another big issue has come up in the agricultural industry, and that has to do with carbon sequestration and the new biotech’s fuel that the administration just announced for sustainable aviation fuel has some caveats attached to it, and it’s really something that farmers are going to have to pay attention to. The essential issue here is if an ethanol plant is going to be qualified to be able to receive that tax credit for the sustainable aviation fuel, it will have to get its feedstock from farmers that are using conservation practices like no till agriculture and cover cropping, and also there is an initiative with enhanced fertilizer.
00;09;32;29 – 00;09;48;24
So my question to you as an Illinois farmer and someone that sells to ethanol plants, are you either using some of these practices now or willing to adopt your farming practices to be able to sell feedstock that the ethanol plants will be looking for?
00;09;48;28 – 00;10;04;16
Yeah, it actually touches on a subject that we’ve been dealing with pretty close here on the farm the last couple years. So we’ve been implementing cover crops, and we’ve always been big on conservation tillage and switching, how we use fertilizer rates and things like that. And we are I feel like we’ve got some experience now in this and we saw that come out.
00;10;04;16 – 00;10;18;04
And it’s a it’ll be a good fit for us on our farm. I think it’s going to take some change from a lot of people to get that work on widespread. But I think on our farm, we’ve been doing that already and have implemented it across our whole farm the last couple years and have had pretty good success with it.
00;10;18;04 – 00;10;30;04
So it’s definitely a mindset that you have to change a little bit on how you do things, but we’re seeing some pretty good results as far as soil health and yield and fertilizer levels and all the things that go into that.
00;10;30;04 – 00;10;37;18
Well, for farmers listening, then, Doug, what would be a tip or two for them to be able to begin to think about this or begin to make those adjustments on their farm?
00;10;37;19 – 00;10;54;06
You know, one thing we tell people is just, you know, take small steps and you’re not going to see results in a year. It’s it’s a process. Right? So it’s not like some magic bullet. We’re going to go out there and spray on the corn or do something different. That’s going to give you a 20 bushel increase. It’s a process you need to implement on your farm and slowly work into your operation.
00;10;54;06 – 00;11;09;25
And and don’t get discouraged and don’t throw it away if something doesn’t go exactly as planned the first year or two. You know, we started this probably five, six years ago, and we’ve changed something almost every year as to how we’re doing things. And but man, have we seen this a huge benefit and some soil health that we’re doing.
00;11;09;25 – 00;11;22;24
And all this rain that we’ve had, we feel we’ve also looking at some of these fields in the last couple weeks that we’ve improved the drainage on some of these farms that don’t have field tile, by improving the soil health through cover crops and reintroducing some stuff into the soil, that makes it healthier.
00;11;22;26 – 00;11;28;19
It sounds like the administration’s biofuel tax rules will play right into your operation then.
00;11;28;20 – 00;11;45;27
Yeah, we feel we’re prepared for anything like that that will come down from the administration as far as what’s required to produce ethanol or what what kind of crops they’re looking for. So we’ve we’ve positioned ourselves. We feel I know we didn’t do that for this reason. We were we’ve been doing it because we thought it was the best thing for our farm in our operation.
00;11;45;27 – 00;11;48;24
And this is just going to be kind of an added benefit thing.
00;11;49;01 – 00;12;07;24
And finally, do you remain optimistic about U.S. agriculture, its competitiveness in the global markets, a lot of competition rearing up both for corn and soybeans right now, especially from South America, but also from Ukraine and others. But what’s your optimism level, so to speak, for global markets?
00;12;07;25 – 00;12;26;27
Yeah, I mean, we’re still trying to to feed the world, right. And I still think we produce a very good product here. You know, I think politics plays a lot into that. But where we are in the Midwest, I think there’s always going to be a demand for what we’re producing. And one of the things that we’re kind of targeting long range with the soil health stuff is we’re producing a better quality grain or product.
00;12;26;28 – 00;12;42;15
So we think maybe we can add some more value by healthier soil produce and healthier plant, which turns into a healthier grain. So we think we may be able to produce more value that way also. But you know, globally, I think we’re in a good position here. South America. Yeah, they say there’s a lot of acres to still be planted down there.
00;12;42;15 – 00;12;46;08
So that’s to be determined probably and probably market will determine a lot of that.
00;12;46;10 – 00;12;52;01
Well speaking of planting, I know you’re stopped out right now because of the weather. What’s the forecast going forward for the next ten days?
00;12;52;01 – 00;12;53;14
Wet wet wet.
00;12;53;14 – 00;12;55;07
So we’re pretty easy to say.
00;12;55;14 – 00;13;12;25
Yeah. You know lawn mowers getting to work out. That’s about it right now. So looks wet. So we’re just hoping we can avoid getting a big rain again. And we can slowly get back into the field and hope a window maybe opens up next week. We can get something done. But we’re to the point now though a week window it’s going to take to dry out some of these farms.
00;13;12;25 – 00;13;16;01
So I have a feeling we’re going to be planting up to the June.
00;13;16;03 – 00;13;20;10
Well, good luck with your planting progress, Doug, and we sure appreciate you joining us here today.
00;13;20;11 – 00;13;22;03
No problem. Thanks for calling you bet.
00;13;22;03 – 00;13;36;06
Doug Martin, Mount Pulaski, Illinois farmer. We thank Doug for joining us today. And if you’ve enjoyed listening to From the Furrow, be sure to tell a friend or two and subscribe to us wherever you listen to your podcasts. Thank you to the Ever AG Insights Crew for their work on today’s show.
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