2015 saw some good crops harvested in the Mid-South, but when many growers settled up for the year they didn’t have enough left to “buy a good bill of groceries at Wal-Mart.”
That’s how Hornersville, Mo., producer Steve Droke described the situation in 2015 during the Survival Strategy Summit, a grower event sponsored by BASF in conjunction with this year’s Mid-South Farm and Gin Show in Memphis, Tenn.
During the nearly hour-and-a-half meeting, 16 producers from five Mid-South states discussed what happened on their farms in 2015 and what they’re thinking about as they begin to plant what could be a make-or-break crop for many growers.
“When you’re making a good crop, and you’re not making any money, you’re in a real dangerous situation,” said Jimmy Moody, a cotton, corn, soybean and wheat producer from Dyersburg, Tenn., who began farming in 1976. “Our lending institutions know that, and they’re just as scared as we are.”
Moody wasn’t the only participant talking about fear and farming.
Franklin Fogelman, a soybean, corn, rice, milo and wheat producer from Marion, Ark., said 2015 was probably the second best year he’s had on his farm. But when asked about the best decision he made in 2015, he said, “We went back to farming afraid.
More than one year
“We entered into it thinking it was the first and only year of maybe a farm recession or a decline in prices,” he said. “We attacked it hard. Like a typical year we had several crops that had average production. We were carried by one and possibly two crops. We made some changes like we have continued to do every year. Now it looks like it won’t be the only one like this.”
Attendees at the Summit, which was organized by Delta Farm Press, spanned four generations. Two of the growers – Jimmy Hargett of Alamo, Tenn., and Kenneth Hood of Perthshire, Miss., will plant their 55th and 56th crops in 2016. Others like Moody, Droke and Buddy Pierce, a producer from Jonesville, La., have farmed for 30 years or more.
The youngest person attending, Wells Taylor, hopes to follow in the footsteps of his father, Michael Taylor, and grandfather, Mike Taylor, who farm in Helena, Ark., when he grows up a few years from now. Wells accompanied his father to the meeting.
Hood, who has served as president of the Stoneville, Miss.-based Delta Council and chairman of the National Cotton Council, said the 2015 crop was the first in which he “did not plant one row of cotton. I found out real fast that you can’t go all grains with a cotton overhead. I think that says it all.”
Referring to his and Hood’s 55 years of farming, Hargett said “We’ve been exposed to a lot. We may not know a danged thing, but we’ve had a heckuva lot of experience. And the experience you’re seeing nowadays is very disturbing.
Hargett said his son and his grandson came to him a few days before the Summit on Feb. 27 and told him: “’You’ve got to show us how we can farm in 2016?’ That will shake you up for a little while,” he said. “And what I’ve learned from this is you have a lot of younger generation farmers who have never seen what we’re going through.”
40-percent decline in one year
For several years, farmers received $14 a bushel for soybeans, $6 or $7 a bushel for corn “and a decent price for cotton,” he said. “And, all at once, 40 percent fell away in one year. USDA says commodity prices fell faster in the past 12 months than they’ve fallen since 1919 through 1921.”
Hargett sat down and worked out a budget for his son and grandson’s operations for 2016. “I showed a profit, but it was dependent on two columns – equipment payments and what I call extra-curricular activities. I told them they had to determine what happened in those two columns. I can’t do that for them.”
Not all of the participants had good crops in 2015.
“It started out very wet; then it got very dry,” said Louisiana’s Pierce, a rice, soybean and wheat grower from Jonesville, La. “Our soybeans where we were able to irrigate were pretty good yielding. Where we didn’t have water burned up.”
Pierce and Mike Sullivan, a rice, soybean and wheat producer from Burdette, Ark., said the spring of 2015 was one of the wettest they’ve experienced in 30 years of farming.
“We had a super crop in 2014,” said Sullivan. “So I think a lot of us had to remind ourselves 2014 was an aberration, and we can’t expect to have those kinds of yields every year. 2015 compared to our five-year average.
No tractor in field for month
“We were 10 bushels off our 2014 yield on soybeans and 15 bushels off our 2014 rice average,” he said. “We had a period from May 6 to June 6 where we didn’t have a tractor in the field. We had to flood all our rice. Then we had to drop the fertilizer into the water and spoon feed it because we couldn’t get it to dry out. We felt like we had our hands tied behind our back.”
Responding to a question from moderator Elton Robinson about what he would have done differently in 2015, Sullivan said he and his son, Ryan, and his employees did “exactly the same things we did in 2014. We were counting on those 14 yields because it takes every bushel to cash flow now.”
Missouri’s Droke said 2015 was the first time in his life he filed for prevented planted on cotton. “We had a terrible time trying to get our crop planted because it was wet, wet, wet.”
Traditionally, Droke has been a cotton and watermelon farmer, but, in 2015, “I couldn’t stand it anymore, and I had to put in 1,000 acres of grain. I planted my very best land. We beat our five-year average on cotton, and we got a good price for it,” he noted. “We made our 79-bushel average on beans and had them sold at $9.87.
“We had a couple of 100 acres of milo and had it sold at $5. I had one of the best watermelon crops I ever had, but at the end of the year, I just barely had enough money left to go to Wal-Mart and get a bill of groceries.”
2015 also proved to be a difficult year for growers who made changes to their operations. Bryan Moery, who farms with his grandson, Pete Moery, in Wynne, Ark., has grown seed beans for years, but decided to try planting some early beans last spring.
2016 prices at break-even or less
“They talked me into planting some early beans to get our yields up,” he said. “Last year wasn’t a good year to plant early beans. We had about 30 inches of rain after we got them planted. Our bean yields were down. We had an excellent rice crop. We were fortunate in that we had an opportunity to sell at a higher price (from 2014’s higher prices).
“This coming year I think we can make the same yield, but the opportunity to sell is at break-even, or less,” said Moery. “I can’t find that opportunity out there for booking to get my income up. I know what my expenses are, but we’ve got to get our prices up, and that looks pretty gloomy right now.”
Some participants said it will take more than good crops in 2016 to help them make it to 2017. And they’re unsure if 2017 will offer much in the way of help given the outlook for continued low prices through most of 2016.
“My farm credit lending officer mentioned to me last year that we’re fixing to go through a mud hole,” said Arkansas’ Sullivan. “We’ve got to put it in four-wheel drive and hope we make it out to the other side. It’s not the first time we’ve gone through one – if my son does this for 50 years he’s going to go through some mud holes.”
Sullivan and other participants said farmers need relief on input prices, which they believe have yet to come down despite the sharp drop in crop prices. “We’ve got to have that, and landlords need to be more understanding, as well.”
Farmer landlord's best asset
Landlords, he said, “need to put their farmers in the asset category. They need to understand that the most important ingredient in the ROI or return on investment on his land is the Franklin Fogelman. If Franklin is able to update his machinery and do things in a timely manner that’s doing more the ROI for that landlord than anything else he can do.”
Sullivan and Hargett both said they believe they can survive. 2016. Their big concern, they said, is what happens in 2017.
“We have six problems,” said Hargett, who named six of the major input suppliers serving agriculture today. Some companies serving farmers on the local level have offered to lower the prices of their products.
“We have not got a company that charges a tech fee yet who has said they will lower the tech fee,” he noted. “We’re paying $14-soybean and $7-corn tech fees with $3.50 corn and $8.50 soybeans. Now, you explain how we’re going to do that?”
For more on the farm economic outlook, visit http://1.usa.gov/1p0CTGB.