March 29, 2024

Crop Fair offered market, insurance information

Two speakers part of Newton Club’s Feb. 17 event

“If you want to build a bigger fire, you don’t need bigger matches — you need a lot of wood.”

That’s one of the metaphors by Sciota Trading’s Dan Greder during his presentation at the 2015 Crop Fair, held Feb. 17 at Iowa Speedway’s Newton Club.

Greder, one of the presenters at a unique informational event, titled his presentation “Adjusting Our Expectations — Again,” epitomizing the changes happening in agricultural markets and the forecasts for reduced 2015 farm incomes.

The morning-long event began with a lively presentation from farm and agriculture business management specialist Steve Johnson, whose topic was “ARC or PLC/SCO Choices.” Despite the very business-oriented nature of the topics, both speakers kept things moving along — in completely different ways.

Johnson, a loud, animated speaker, wore in a customized Iowa State University football jersey. The letters “ARC PLC” were imprinted where the player surname would be on the back of the jersey, with one shoulder bearing the number 14 and the other 18.

Johnson went into detail about factors farmers would consider when choosing between 2014 Farm Bill crop-insurance programs. ARC, or Agricultural Risk Coverage, is on one side, with PLC, or Price Loss Coverage) and the SCO (Supplemental Coverage Option on the other.

“It’s a one-time choice,” Johnson said. “Beginning in 2015, the default is the farm is enrolled in the PLC program. I’m not telling anyone what to do, but know what your yields are, and get informed to make a decision.”

He described PLC as a shallow-loss, price-only-triggered program, whereas ARC is revenue-triggered and involves a five-year average. There are pros and cons to each plan, he said. The animated Johnson took a blunt-yet-lighthearted approach toward driving home the importance of the choice near the conclusion of his talk.

“What I encourage you all to do, most of you have not done in recent times,” Johnson said. “Imagine going another 12 years, or 30 years, without updating yields. It’s 2045, and your grandkids realize that you spaced off. You screwed up your FSA.” He ended his talk with “Everyone have a great year — God bless, and go Cyclones.”

Greder’s longer presentation on market expectations used a more low-key approach.

The Sciota Trading representative brought with him several slides of information, including one chart that showed when various commodities peaked in price in recent years.

Gold, silver and copper all peaked in 2011, Greder said. Cotton also peaked in 2011.

Corn peaked in August 2012, although its price remained relatively high throughout 2012 and 2013. Beans peaked in September 2012, followed by hogs in July of 2014 and cattle in in October of last year.

Amid publicity about how the fracking industry affected fuel prices the past couple of years, natural gas peaked in December 2005. Crude oil peaked in July 2008 before falling below $50 per barrel in January of this year.

Greder, in pointing out how the market changes regularly, acknowledged the anxiety some hog farmers might have now.

“If you’re a hog farmer, you probably have not enjoyed the past two and a half months,” Greder said.

There are reasons to be optimistic, he said, including plenty of wheat feed globally and the strong feed demand due to expansion of the poultry and pork industries. He pointed out that after Omaha Corn prices dropped dramatically between August and October, things leveled off over the past four months.

Greder described the Ethanol industry as one that isn’t quite into its second generation, but still a grown-up element of the fuel and agriculture economy that’s here to stay. There is no more growth expected in the near future on that side of operations worldwide.

“As Ethanol matures, it needs to stand on its own two feet,” Greder said. “It’s got its place now — the blenders’ credit has gone away, and that didn’t hurt it.”