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December grain contract crunch

Year in review: Corn takes the spotlight, high input costs not yet forgotten

Kyle Stackhouse 2

December 30, 2022

2 Min Read
Unloading corn from semi at elevator
Getty/iStockphoto

Happy New Year! Wow, it’s hard to believe this is the last blog of 2022!

One of our drivers retreated to Texas shortly after the completion of harvest. The other driver wanted some time off last week and this week, so he only drove a couple of days each week. This pushed dad and I into the semi trucks to finish filling grain contracts for the month. Local basis for corn remains strong but will drop 15 cents at the end of this week. Soybean basis has fallen off a little bit with this latest run in the market.

Traditionally, my last post of the year is the ‘best of’ post. Maybe this is more of a ‘year in review’, but, here it goes…

Year in review

Even though uncertainty was very high headed into 2022, the end result was generally good. The start of planting was delayed a bit. We made it through a couple of dry spells during the growing season. In the end, soybeans disappointed a little bit, but corn made up for it.

We did our best to weather the high fertilizer and chemistry prices. We purchased product early and were open to using alternative products. The price for both fertilizer and chemicalas have started to come down for 2023. The word ‘shortage’ has been heard less this fall/winter, though some chemistry is still ‘tight’ and KMag is hard to get.

Seed prices however are on the way up, manure has doubled in price, and equipment is still hot. You can’t walk into a dealer and expect to find much in stock. You can’t order anything and have it by spring.

Probably the brightest spot of this year is the grain markets. Markets are higher than they were last year, providing an opportunity to cover some of the input inflation rather than fearing those increased costs would come out of equity or working capital. Markets will need to remain strong until some of these input costs fall back into a ‘normal’ range. More likely, markets may have to adjust to a ‘new normal’ to compensate for increased production expenses.

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