Greetings from soggy Missouri. It has been a long time since we had this much rain and mud for a harvest. Everyone is digging out our long-forgotten log chains and tow ropes.

We have had abundant rain here and it continues to fall on and off to keep things soft out in the fields. So we all had to learn where the wet spots were again and they have really shown up.

But just now we are getting a one-week window to harvest, so it’s all hands on deck and everyone is moving as fast as the ground allows. We are leaving some ruts in many fields now, but there is nothing we can do. We have also had to leave some crop unharvested in the wettest spots and we will probably have to wait until the ground freezes to get back to these.

Harvest was slow to start this year and it remains slow. We have several demons to work around – wet fields, high moisture corn and low prices for what we are harvesting.

Yields are good to excellent, but even that is turning into a curse as there is not enough storage. It has been estimated that Missouri has 120% crop relative to storage capacity and I certainly believe that to be the case in our area.

Prices

The basis for price is extremely wide compared to the last six years and the prices this week are $2.70-$2.75/bushel (€83-€85/t) in our local market – up from $2.50/bu (€77/t) last week. This is well below the cost of production, which is currently somewhere between $3.25 and $4.50/bu (€100-€139/t) depending on the individual.

When I visited with our grain buyers recently, they said the market had not yet hit bottom. They cannot get rail capacity and their elevators are full, and we have only just gotten a good start on harvest. So it is going to be a little longer finding a bottom – too much of a good thing, I guess.

We have also started harvesting soyabeans, both seed beans and commodity beans, and early yield estimates look a little above average. But they are variable. Where the hail did not hit the crop, we are seeing 55-60bu/ac (and an occasional 70bu or 1.9t/ac crop). Where hail and/or Sudden Death Syndrome (SDS) occurred, the yield monitors are dropping as low as 25bu/ac (0.7t/ac).

A lot of the Midwest experienced SDS in soyabeans with the cool, damper weather earlier. But overall, yields are still about 20% above average at 50-55bu/ac (1.36-1.5t/ac). Price was around $9/bu (€259/t) last week and this is up from $8/bu (€230/t) the previous week.

The strong dollar is not helping our export market either. I never thought the dollar would be this strong and I actually planned on it being weaker.

Fertilizer prices here are still the same as a year ago. This is confusing us as corn is half the price of last year and soyabeans are about two-thirds the price.

So we are trying to decide if it is wise to gamble and hold out until spring to buy fertilizer and anhydrous ammonia.

Inputs are not down either and I hear that the major seed companies (Pioneer, Monsanto and Syngenta) are talking about raising their seed prices this winter.

Machinery

Machinery prices are falling slowly. With the low prices for the grains, farmers are reluctant to spend too much money as machinery debt will be a worse problem verses land debt. Another issue is the depreciation allowance. For the last 10 to 15 years, we have been able to write off $125,000 to $500,000 (€99,100 to €396,330) in depreciable equipment – as of right now, we are only able to write off $25,000 (€19,815).

The machinery and equipment companies are concerned that our legislators will continue to be in disarray and unconcerned and leave the tax rate as is and kill off equipment upgrades. Time will tell on this one.

One interesting thing that I have been hearing in the last few days is that some farmers are now looking to buy tracks for the front axle of their combines to help them stay moving. I was in John Deere last Friday morning and was told that a set of John Deere tracks to retro fit is priced at $129,000 (€101,108) and that does not include installation and modifications of the existing machine.

The same gear purchased and fitted on a new combine is somewhere between $80,000 and $90,000 (€62,700 to €70,540). Secondhand tracks cost somewhere around $75,000 (€58,800). This is a measure of how desperate some people are to get their crops out.

Fuel prices

Fuel is lower, though, and this is always great. Two weeks ago, diesel for the farm equipment cost $3.00 per gallon (€0.62/l) and road diesel for the trucks cost $3.40 per gallon (€0.704/l). These eased back about 10 cents/gallon last week. The difference between the two prices is a result of the 40 cent road taxes which are charged on road fuel. At a guess, I think we are about 15% lower so far this year than last, and this is still falling, but slowly.

Our grain dryers are hooked up to natural gas because it is cheaper. Propane is the most common fuel used in most dryers and it is priced at $1.65/gallon (€0.34/l).

Additional storage

On our farm, we are continuing to enjoy farming, even with all the uncertainty. I guess it just builds character and wisdom. We continue to add slowly to the new elevator we started last year to boost storage capacity.

We added another wet holding tank to help supply the dryer and should have another 100,000-bushel tank (2,500t) in place in a couple weeks to help us deal with the higher yields and lower prices. We will be able to hold all our corn and, hopefully, most of the beans on the farm.

I guess we are hoping for higher prices next summer. All us farmers are gamblers and optimists.

Land prices

Land prices have levelled off, but they have not really dropped yet. There is a lot of talk of rents needing to drop soon. Several of the aggressive high-rent bidders are in a bind as they are in a loss-making situation with the current prices.

I guess I am a little unsympathetic at this time as most of us knew the rents they were pushing were too high and that a day would come when they would be in trouble. It all depends on how long these low prices last.

Planting issues

There is talk of less corn acres and more bean acres next year. I would agree with this opinion. It is a lot cheaper to plant soyabeans right now. However, it’s a long time until spring and anything can happen to change that plan.

We tried a couple of new things when planting corn last spring. We tested corn in 10-inch rows at a high population of 49,000 seeds/acre. This was compared to 20- or 30-inch corn at 28,000 to 32,000 population. We have two fields planted testing these differences, so we await the results with interest. We will know more after we harvest the ultra narrow rows.

Herbicide resistance

At the seed plant we are waiting for the final approval for the 2,4-D soyabean (Enlist, E3) traits. Roundup Ready has worn out its welcome because we have some weed resistance issues and Liberty Link soyabeans are gaining in acres (Basta resistant). So most modern farmers are looking for a couple of different traits to help prevent resistant weed issues.

We are working on contracts for the production of seed with the new traits for next season. This will be multiplied in 2015 and available to farmers in 2016. I think this will be a very good thing for farmers. Monsanto is trying to bring forward the dicamba soyabean as competition, but they have had some drift concerns and the last I heard is that it will be 2017 before we see this trait in fields. So it is going to be an interesting time to see what the farmer chooses for his purchases.

Hard winter

They are predicting a hard winter here and livestock farmers are bracing themselves for another bad one. The cattle guys are enjoying record profits with the cheap feed combined with the extremely high prices for cattle. They have suffered for the past few years with the high-priced grain and feeds, so it is good to see them having a profitable season.

US fuels

Ethanol production continues to be a hot topic and with the abundant supply of cheap corn, we need those processors to be making as much bioethanol as possible.

Shale oil production has become interesting here in the US. This is harnessed through fracking and there is considerable debate in some circles here about its safety. However, it has proven to be safe so far and I am leaning towards this sentiment.

As the US becomes more energy sufficient, it can only help the rest of the world. If we can continue expanding oil production here, its effect should resonate around the world.

If the US needs to import less, this takes some demand competition out of the global oil market and this should enable prices to come down for all oil purchasers.

All things considered, life is pretty good. We are just experiencing the hangover after the party of high prices of the last few years. We all knew those times couldn’t last and that this time would come. We just wish the party had lasted a little longer.

It is interesting to read in the Irish Farmers Journal about the issues that Irish farmers are facing within the EU. And while we think we have problems here, your headaches are ones we could certainly do without.