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Commodity Prices May Force Adjustments for Ag Producers

By John Nixon

12/01/2014

(KLZA)-- Excellent yields have been reported by area farmers. In fact, some farmers are still wrapping up harvest. However, excitement over excellent yields is tempered by low grain prices. There has been a drastic decrease in prices for the sale of corn, soybeans and winter wheat.

As the time is here to start planning for next year, University of Missouri Extension Agronomist Wayne Flannery says producers need to give careful consideration to managing expenses. He says some adjustments will likely need to be made in most producer budgets and operations moving forward.

Cost reduction is a much different approach than continuing to look for ways to increase crop yields. Cash expenses such as fertilizer, seed and agricultural chemical are often the focus of managing costs. One thing that should be considered by landlords and tenants is a flexible cash rent. Flexible cash rents means both parties share in the risks and in the rewards. Having a good relationship is good for both parties.

It will also be important to consider the potential value of each crop input. Flannery suggests growers consider the risk and reward of various agronomic practices.

Another suggestion is utilizing the Extension Services in your state to help find ways to adjust their farming operations. Extension services has templates for flexible cash rents.

For more information you may contact the University Extension Office in the county where you live.

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