Eric Doolittle spent the winter plotting to make the next eight weeks as painless as possible. But even he knows the crop plans his farm team put together might need to be shelved and reworked at least once this spring.
“You think it’s going to run like clockwork, and then Mother Nature throws you a curveball,” says Doolittle, who grows corn and soybeans near Williams, Iowa. “It might rain here and 10 miles away it didn’t rain a drop, so you have to revamp and retool your plans. The ability to ‘make it up as you go’ is real because it can get really chaotic, really fast.”
And for most grain farmers, this year’s chaos is welcome. After two years of rain, delays, a derecho, lockdowns and now a sustained rally, the Corn Belt feels like a powder keg ready to explode.
“With crop prices rallying, it’s going to be like horses wanting to get out of a stall,” says Jeff Tarsi, senior vice president of North American operations for Nutrien Ag Solutions.
Boom times may be here, but there’s always the risk of going bust, which is why getting off to a good start is critical. After six years of disappointing prices, 2021 suddenly looks like a chance to make balance sheets healthy again. While 2020 saw the second-highest prevent plant acreage on record, good fall weather helped many Corn Belt farmers get caught up on fertilizer applications ahead of 2021 planting.
As a result, “farmers are going to plant fencerow to fencerow, swing for the fences — everything they can to maximize yields,” predicts Tarsi.
Farm Futures’ January survey supports that forecast. Farmers said they plan to increase corn acreage 4.1% from the year prior, to 94.7 million acres. If realized, this year’s corn acreage will be the third largest over the past 75 years, trailing only 2012 and 2013. A conservative trendline yield (177.4 bushels per acre) would produce 15.3 billion bushels, besting 2016’s record haul as the highest U.S. corn output on record, says Farm Futures market analyst Jacqueline Holland.
The survey also shows farmers plan to add 1.4 million more soybean acres than last year, upping acreage to 84.5 million. A yield of 52.2 bpa would likely place 2021 soybean production shy of 4.4 billion bushels, the second-largest crop on record, she adds.
Control the chaos
But those numbers don’t mean much right now to farmers like Doolittle, who are just trying to get everyone and everything organized. He and his farm team spent the winter retooling planters, ordering seed and herbicides, and studying yield maps to make sure they’re putting the best hybrid or variety on each field to maximize yield.
“It’s not as easy as it sounds because every farm or field can be night-and-day different, even if they are across the road from each other,” Doolittle says.
It’s no wonder that a grain farmer’s time is worth thousands per hour from March to May. And weather extremes make the job that much more difficult. Midwest land-grant universities study historic spring weather data and conclude there are about seven days on average to plant corn, and seven days to plant soybeans in optimum conditions. Extreme weather conditions have shrunk those numbers closer to six days.
Accordingly, farmers ramped up labor and machinery capacity. However, these days shooting for high-yielding soybeans means planting weeks earlier than what your grandfathers thought was prudent.
“This means we no longer have two separate seven-day planting windows,” notes western Illinois farmer and farm manager Jerry Moss. “Most of the central Midwest will start planting corn and beans on nearly the same date. The penalty to plant corn too early will be weighed against the yield drag to plant beans too late, as we all try to stretch the new, combined seven days total for the greatest yields for both crops.”
Doolittle agrees. “The planting window is becoming more compacted,” he says. “You used to plant corn first, then beans. But with thin margins, we have to do everything we can to win this game, so there are days we’ll be planting beans and corn at the same time. That’s more common the last three to five years and a big shift in the 25 years I’ve been farming.”
Early-planted soybeans double your incentive to ramp up time management in the spring. It will be very tempting to farm fields too wet, run the planter too fast, even forget the importance of details and safety (hint: don’t).
Openly fight these urges as the stress ramps up.
“If you have a cold rain coming in, it’s a 24-hour stop needed for beans and a 48-hour halt for corn to keep these seeds from imbibing the toxic cold drink at germination,” Moss says. “Talk about redefining stress! You may need to shut down the planter on a gorgeous sunny day because of impending bad weather, all while your neighbors are all still going strong.”
Let’s assume you’ve done comprehensive winter equipment maintenance to eliminate downtime caused by worn-out parts. You also need a plan for major downtime contingencies, such as a tractor going down in the field, a seed trailer failure, a highway transport blowout, tillage or planting equipment in the mud, short-cutting of a field entrance, and most critical, failures with monitors, GPS or other tech systems — as well as those rain-out days stuck in the machine shed.
Organizing seed and planting rigs is one thing. The people who carry out the plan is where the rubber meets the road. And it’s harder and harder to find qualified people who want to work those long spring planting hours.
“In the spring, we don’t work 8-to-5 or take the weekends off,” Doolittle notes. “You get a break when it rains.”
With a dedicated, talented team, the owner-operator can focus on solving problems and directing traffic, says Doolittle, who manages as many as a dozen full- and part-time employees during the spring rush.
“I look at them more like teammates than employees, and over time, they become part of your family,” he says. “We keep them motivated and give them some skin in the game. The good ones often use their own instincts in how to manage problems on the go.”
In the end, spring timeliness is worth big, big dollars. If you can’t give people financial rewards, get creative in how you compensate the support team for their “24/7” mentality.
“We take special care to see the night shift is fed better, catered to more, and earns considerably more wage and bonus potential than the eight-hours-a-day employees,” Moss says. “Make the spring push safe and fun, but create a vested interest for your entire team.”
How well do you delegate?
While teamwork makes the dream work, you also need to be able to delegate responsibility for each spring function. That means letting go of some control and trusting others. Period.
Delegation can be a bit of a puzzle sometimes, but with a little communication, matching employees to specific tasks becomes much easier, according to Kansas farmer Lon Frahm. “It’s super obvious who’s interested in what,” he says. “A tech nerd is easy to spot across the room, for example.”
Frahm manages 35,000 acres with 11 full-time employees, plus 16 part-time truck drivers during harvest. Many of his full-time workers didn’t grow up on a farm, which he views as positive because they present more of a blank slate for him to shape.
“I’m all about education,” he says. “My biggest problem is not stepping on each other’s toes. I have multiple people who would really like to be in charge of the same thing, but of course, that’s a nice problem to have.”
Keep an eye on markets
So how do you keep an eye on this bull market as tractors, planters and other implements finally roll?
“A lot of times when you’re planting corn, it’s a good time to sell corn, so you always have to watch the markets,” Doolittle says. “If I’m in the planter with autosteer, I’ll often be checking markets.”
Matt Bennett, an Illinois farmer and commodity analyst with AgMarket.net, says a disciplined marketing approach is a 12-month job. Establish your risk tolerance. What’s the price point you don’t want to fall below? “The market can move quickly and violently,” he notes. “In this market, you don’t have to hit the high to be profitable.”
Farmers who sold early last fall before prices heated up are hoping the bulls keep getting fed this spring and summer. If prices remain strong, you’ll have more bushels to sell at harvest, but right now that’s a big if. Will dry conditions in the U.S. High Plains spread to the Corn Belt? When the race for profits concludes at harvest, what’s waiting for you at the finish line?
Futures prices for corn and soybean contracts spanning the 2021 marketing year are trading lower than those of 2020. This inversion signals that the market is hungrier for corn and soybeans now rather than later.
Farmers would be wise to keep an eye on global fundamentals and these spreads over the next couple months, Holland notes. If South American crops have minimal drought damage, the inversion could reverse, and grain farmers could face a scenario where basis narrows and carry incentive is reestablished in the market.
High corn acreage, as suggested in Farm Futures’ survey, also has the potential to revert soybean futures prices and create more carry in the market.
In either case, the race is about to begin. Make sure you get off to a smart start.
Apply for usda crop programs by March 15
By Jacqui Fatka
Drought is a risk any year, but with high prices, more may be at stake in 2021. So, mark your calendar for March 15.
Up to that day, farmers can make choices for Agriculture Risk Coverage or Price Loss Coverage for the 2021 crop year. The sales closing date — as well as purchase, cancellation, transfer and change date for corn, soybean and spring wheat crop insurance — also falls on March 15. The projected price for crop insurance was set to be announced March 5.
Related: Don’t miss market opportunities