Conversations with a Nebraska farmer

One of my farmer friends from Nebraska called me Friday.

We only chatted for about ten minutes. He was driving from Michigan back to Nebraska and was approaching the Mississippi river.

Our conversation covered a lot of ground. Farmers can be very economical with their words.

His family's operation is not huge by mid-Western standards but it spins off enough profit to support a couple of families with a very modest living.

They are going to do "OK" this year. Hail flattened crops three miles north of them. He said that he and his brother did a "drive by" after the hail and you could not tell a newly plowed field from a corn field from a bean field in the areas with the heaviest damage. The hail damaged one corner of one of their fields. Weather can be a very local phenomena.

Some of the farmers replanted. They put in soybeans which are less sensitive to shorter growing season than corn. My farmer friend was ambivalent about their chances. Corn fields get fertilized with large amounts of nitrogen. Replanting with beans in that field can lead to very lush, highly vegetative grown and minimal amount of pod-set. Dry-down will take forever.

He was irked by the amount of misinformation floating around. Many agricultural "reporters" or rewrites for the popular press get things screwed up. The latest cockamamie interpretation was a series of articles claiming that it was "against the law" for farmers to grow two crops a year in the United States.

His gut feel is that the rumor started because there are cut-off dates for the purchase of crop insurance based on the crop and the latitude of the field. In Eaton County, Michigan, a farmer cannot buy crop insurance for corn after June 6. There is just too much risk of their not being able to get a crop when planted later than that.

Farmers will sometimes risk planting beans after taking off a crop of wheat in July IF they have soil moisture and they got the wheat off early and have the labor to run the planter while continuing to harvest wheat. Even then it is a flip-of-the-coin that they will get back the price of planting the beans. Obviously, they cannot buy insurance for such a high-risk enterprise because they are planting after the cut-off date.

My Cornhusker friend told me that in spite of reports of farmers changing plans, he didn't know of anybody who planted beans instead of corn due to fertilizer prices. Nor did he know any farmers who backed off on nitrogen application. There are a host of other costs in planting, growing and harvesting a cornfield. It is stupid to back-off on N to save a few dollars if it impacts your yield by 10%-to-25%. That impacts your gross revenue in a very big way.

Finally, he said most farmers expect prices to be in the $6 a bushel-to-$9 a bushel range. Farmers who are capable of physically delivering last-season corn to feedlots are currently getting $8.50 a bushel now but corn stocks are scraping bottom just ahead of the 2022 harvest.

Then he pointed out that consumers blame farmers for high food prices. He said a 14 ounce package of Doritos has about 5 cents of corn in it when corn is $4 a bushel. That package of Doritos went up $2.50 when the cost of the corn went up to ten cents per package.

It is highly probably that the cost of the multi-color, metalized, mylar package the Doritos are sold in cost Frito-Lay more than twice what they paid for the corn. Furthermore, the advertising probably cost twice as much as the corn and the package combined.

It isn't the farmer who is raising prices.