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One look across a lot of corn and soybean fields in the Midwest these days may not exactly inspire many farmers to break out the checkbook and start stocking up on crop inputs and new iron.
But, despite the lackluster look of the crops at this point in the hot, dry growing season, grain prices are good. So good that USDA-ERS said this week that average farm incomes are almost 20% higher than they were a year ago.
Don't get too caught up in either side of the equation: What's really important, says Iowa State University Extension farm management specialist Steve Johnson, is revenue.
"While most producers are concerned with their shrinking 2011 corn crop potential, keeping their focus on profits margin for 2012 is advised. Trying to pick the highest price and sell all your crops seems futile," he says. "Besides, it’s net revenue; yield times prices minus costs that will determine if you made money from your corn and soybean crops."
Think back to 2008 and 2009: Grain prices were high in summer 2008, and if you sold enough grain and bought enough of your crop inputs in the right timeframe -- before prices fell and farmers lost a lot of potential income -- you made out okay, Johnson says.
"That 2009 crop then provided a record yield at harvest, and cash prices did not recover to those same price levels until 2011 with smaller 2010 and 2011 U.S. corn yields," he adds.
That may mean right now is as good a time as any to make some key purchase decisions on your farm. What is your plan?
"I just went equipment shopping today...Kicking tires more than anything. The JD dealer said if a guy wanted a new planter they wouldn't be able to get it made and delivered in time for next year because demand is so high," says Agriculture.com Farm Business Talk senior contributor Blacksandfarmer. "I don't know if taxes have anything to do with that or if farmers just recognize the need for larger planters to deal with increasingly smaller planting windows that seem to be the norm these days."
"I have made a few purchases this fall, including a new grain cart that was a holdover and the dealer made a good offer to get it off their lot," adds Farm Business Talk frequent contributor SpringBrookFarm. "I'll feel a lot more comfortable with less debt going into next year where I think we have learned anything can have, markets and weather. I also am looking forward to catching up on some maintenence items. I'd rather take care of what i have then add more things to take care of on top of what I have now."
If you are looking at doing some buying, here are a few of the latest Agriculture.com product features.
John Deere recently rolled out its 2012 equipment lineup that includes a new line of combines and some big tractor improvements.
AGCO has unveiled a redesigned line of mid-sized tractors ranging from 170 to 225 engine horsepower (140-180 PTO horsepower).
Dodge has added some new features to its Ram pickups. Check out this up-close look at some of the nuts & bolts and creature comforts
When these were introduced a few years back, there were a lot of doubts. But, see how these power tools are becoming farm shop staples, not toys.
As precision ag equipment and technology advances, farmers are transforming how they put in and take out their crops. See the latest in the precision ag arena.
Big or small, today's tractors are packed with features. While some jobs take more power under the hood, others are easily handled with a smaller machine.