Oklahoma Farm Report masthead graphic with wheat on the left and cattle on the right.
Howdy Neighbors!
Ron Hays, Director of Farm and Ranch Programming, Radio Oklahoma Ag Network  |  2401 Exchange Ave, Suite F, Oklahoma City, Ok 73108  |  (405) 601-9211

advertisements
   
   
   
   
   
   
   

Agricultural News


Spring Agronomy Outlook: A Time to Plant, a Time to Prosper

Fri, 12 Mar 2021 08:20:18 CST

Spring Agronomy Outlook: A Time to Plant, a Time to Prosper Farm supply cooperatives and distributors are positioned to benefit from an active and profitable spring agronomy season driven by high commodity prices, strong input demand and an expected increase in planted acres of soybean, corn and wheat.
After two strong agronomy seasons in 2020, ag retailers and wholesalers begin the 2021 planting season with favorable industry fundamentals and an opportunity to expand profit margins, according to a ’new report from CoBanks Knowledge Exchange

“Barring additional weather shocks, spring 2021 is setting up to be a very strong agronomy season for crop input distributors,” said Kenneth Scott Zuckerberg lead grain and farm supply economist with CoBank. “Improving profits for cooperative agronomy departments should help cushion the negative carry caused by an inversion in futures prices.”

Since last August, prices have increased more than 60% for corn and soybeans and nearly 20% for wheat, in response to tight ending stocks and continued strong demand from both export markets and domestic processors. The cyclical turn in grain prices, combined with robust government support payments, drove a surprise recovery in farmer income, leaving growers in a sound financial position heading into spring.
While some producers may have missed out on the early gains in pricing by selling their corn and soybean crops in late September, U.S. net farm income aggregated for crop, dairy and livestock production grew by $38 billion in 2020. Those gains were driven in large part by historic government farm program payments of $46 billion.

Farm debt and financial leverage ratios continue to increase, however, partly offsetting the positive financial picture for growers. Farmer debt-to-equity is projected to reach 16.1% in 2021 compared to 15.8% in 2020 and 12.7% in 2012, a situation that could become problematic should floating rate interest debt begin rising in anticipation of future inflation.
High grain prices, coupled with favorable supply-demand dynamics, will drive higher planted acreage, resulting in more crop input usage during the spring 2021 planting season. In aggregate, USDA expects slightly more than 10 million additional planted acres this year due primarily to prevent plant acres coming back into circulation.

Given the higher acreage forecasts, farmers are expected to purchase more fertilization products, specifically the principal macronutrients (nitrogen, potassium and phosphorous) during the spring planting season. Rising fertilizer prices are also a positive indicator for new sales and retailer margins.

Inventory levels of seed, fertilizer and crop protection products are largely expected to be sufficient for the projected increase in spring planted acres. However, logistical bottlenecks (mainly trucking and rail) remain as risk factors that could potentially create input shortages or delays in certain parts of the country.

Farmer prepayments to farm supply cooperatives increased during the final months of 2020, as growers bought crop inputs in advance to minimize tax liabilities.

Watch a video synopsis and read the report, Agronomy Outlook: A Time to Plant, a Time to Prosper


   

 

WebReadyTM Powered by WireReady® NSI

 


Top Agricultural News

  • Oklahoma Grain Elevator Cash Bids as of 2:00 p.m, Thursday, April 22  Thu, 22 Apr 2021 15:39:04 CDT
  • OSU's Kim Anderson Gives an update on the Impact of the Freeze on Grain Prices  Thu, 22 Apr 2021 15:37:32 CDT
  • Latest U.S. Drought Monitor Map Has Oklahoma Practically Free of Extreme Drought  Thu, 22 Apr 2021 14:56:14 CDT
  • Thursday, April 22, 2021 Market Wrap-Up with Justin Lewis  Thu, 22 Apr 2021 13:56:39 CDT
  • In Case You Missed It: Here's What They're Saying About the Growing Climate Solutions Act  Thu, 22 Apr 2021 12:13:11 CDT
  • NACD Announces Climate Action Task Force  Thu, 22 Apr 2021 10:06:34 CDT
  • NAWG Launches Special Climate and Sustainability Committee on Earth Day  Thu, 22 Apr 2021 09:58:52 CDT
  • On Earth Day, USDA Invests $487 Million in Rural Water, Energy, and Biofuel Infrastructure $3.8 Million Coming to Oklahoma  Thu, 22 Apr 2021 09:56:50 CDT

  • More Headlines...

       

    Ron salutes our daily email sponsors!

    Oklahoma Ag Credit Oklahoma Farm Bureau National Livestock Credit Ag Mediation Program P&K Equipment Oklahoma City Farm Show Union Mutual Stillwater Milling Oklahoma Cattlemen's Association KIS FUTURES, INC.

    Our Road to Rural Prosperity sponsors!

    Banc First OPSRC ORWA TPAOO TPAOO

    Search OklahomaFarmReport.com


       
       
    © 2008-2021 Oklahoma Farm Report
    Email Ron   |   Newsletter Signup   |    Current Spots   |    Program Links

    WebReady powered by WireReady® Inc.