MARKET STRATEGY
Growing conditions are only part of the picture when it comes to Iowa farming. Commodities and markets also play a primary role. Right now, Fynaardt says the grain market is deflated, and that producers are currently mapping out a strategy for this year’ s growing season as they face a potential price increase for inputs like seed and fertilizer, with a decreasing return on their investment once the grain is ready to sell.
“ A lot of guys are probably looking at the same— if not a little bit more— for their price of seed from last year, and they’ re looking at probably a dollar less in the corn market,” Fynaardt said.
“ So there’ s been a lot of … I call it anxiety on the grower side,” he continued,“ from knowing that they’ re putting their cash flow sheets together and plugging in a smaller number on the income side, and wondering what adjustments do we need to make? Do we need to try and find things cheaper? Do we need to do something to increase yield? Do we need to make a new market plan? Do we need to look for advice in our marketing? What do we need to do to try and overcome that?”
Fynaardt spends time each winter consulting with local growers and helping them plan and strategize for the coming year. He said that this winter, the process has been slower as farmers carefully weigh their options. Some of his local growers are even contemplating planting corn on the same field for the second year in a row due to a tough soybean market looming. That choice would be a departure from Iowa’ s typical corn-beans-corn cycle, which optimizes soil fertility and yield through nitrogen fixation.
A corn crop requires a large amount of nitrogen to grow successfully. Legumes like soybeans perform nitrogen fixation, which replenishes the soil’ s nitrogen supply between corn crops, which is why farmers typically rotate which crop they plant on their fields every year. A corn-on-corn cycle this year would require more nitrogen fertilizer application and could result in a lower-than-usual yield, but could pay off in a corn market that currently looks more optimistic than its soybean counterpart.
“ Obviously, we don’ t know what( the) harvest price is going to look like yet, but looking at the current market, we’ re feeling a little bit … less anxious about corn than we are beans,” Fynaardt said.“ The bean market is a little bit less bright and shiny. There’ s just not as much profit to be made there.”
THE UNCERTAINTY OF TARIFFS
Adding to fiscal uncertainty for producers is the recent conversation about tariffs in politics at the highest level. As the Trump administration moves forward with enacting tariffs on foreign imports— notably from Canada— Iowa producers look ahead to the summer wondering if prices for inputs like potash fertilizer are about to rise higher.
“ Most of it’ s speculation at this point,” Fynaardt said.“ Probably the one that we’ ll see in the ag industry in … south-central Iowa the quickest will be the tariffs between us and Canada, where we take a lot of potash down from Canada on rail cars because we’ re a close neighbor.
“ There’ s just not a ton of extra shipping and cost incurred there, so depending on what they do with fertilizer going across the border, that one will probably be one that we feel first in the market,” he continued.“ We should be okay for spring for the most part … but as we get into summer and thinking about next fall, we’ ll have to start weighing in what that will do to change the market for us. We’ ll probably see an increase in price. Whether the grain market follows that or not, we don’ t know yet.”
Patrick Hatting, a farm and business management specialist with Iowa State University Extension and Outreach, said that the best way to proceed in the current climate of uncertainty is to keep a firm hand on farming expenses to make sure local producers end up with their numbers in the black.
“ Nobody knows exactly how the market is going to respond or react to the tariffs. As a result of that, trying to control the things that we can control in farming is the best we can do. So what are those things that we can control? We can be very cognizant of our expenses that we’ re doing in farming, and trying to in uncertain times, be very cognizant of our expense control would be paramount … Because if we’ re not going to get the top end of the market, we definitely want to try to be in the black,” Hatting said.
Regardless of market conditions, Iowa’ s farmers will begin planting season toward the beginning of April. Ag experts request that drivers remember to look out for farm equipment and to be mindful of wide turning and safe road sharing as local producers carry out their work.
10 AGRICULTURE MAGAZINE