Each year, summer brings a fantastic slate of conferences and meetings, most of which bring in some nice speaking talent.
A couple weeks ago, I attended Wyffels Hybrids' Corn Strategies conference in Decatur. Once again, the speaker panel was great. Lots of tips, tricks and good old advice worth pondering.
During this particular meeting, I enjoyed hearing Michael Swanson, Wells Fargo's chief ag economist. After reviewing my notes, I found three tidbits of wisdom worth pondering.
1. In Illinois, Swanson typically sees a $30 to $50 spread on cash rent rates within a particular county. However, he sees a 30 to 40 bushel corn yield difference attached to those farms. Therefore, he thinks the best operators are willing to pay for the better ground, even if it costs more. "Learn to stay off the marginal ground in your market," Swanson notes.
2. Swanson also spoke about purchasing inputs in advance. Then, he says to sell a corresponding amount of corn to lock in a profit. He calls this "margin management" at the farm level.
While I've heard this strategy from a number of experts, I still wonder how many farmers are actually doing this. A while back, I told Holly Spangler, Prairie Farmer's field editor, that one expert mentioned you can't lose money you never had if you abide by this strategy. Coming off the heels of last year's $7 corn, Holly responded, "Yes you can."
3. Lastly, Swanson spoke about financing an asset according to its useful life. Thus, if you buy a tractor, lock in a fixed payment structure according to how long you think it will be on the farm. Seven years of use = seven years of financing.
According to Swanson, a longer interest period leaves less risk for bad years. I'm sure there's a lot of hog farmers out there who can see the logic behind this.
With summer meeting season in full swing, what's the best advice you've heard thus far?
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