Farmer Iron

Planning for 2013

Drought sufferers know there's another year ahead. Time to think about next year?

Combines are still rolling in a lot of areas, but not for much longer. That's when farmers' minds turn to next year's crop. I know, you're probably going to want to rest a bit after you park the combine, but the markets and suppliers may not let you.

Already diesel prices have slid enough that you might want to book some supply for next season. Booking fertilizer may be top of mind too - and I've heard that the best way to book that product is to write a check. Given worries about counter-party risk, if you're paying cash for anything these days know that your suppliers are in good financial health, or you could be out both cash and supplies for next year.

Facts like that have so changed the farming landscape in the past few years. Rising market volatility creates a new level of uncertainty. Those of you who know how to capitalize on that volatility are doing fine; those that don't are seeing a hit to their bottom lines. Going forward, understanding how this rising volatility can crimp your style is a significant challenge.

Yet there's always another year. We have a joke in the magazine business (not nearly as risky as farming - though Newsweek might not think so) that you work and slave over an issue and when you're done…there's another one right after it. While you work on a grander scale, it's the same thing. Even as you're filling bins this fall, you've got your eye on the 2013 ball.

Folks like Elwynn Taylor, Iowa State University, climatologist will tell you that there's only a 1 in 5 chance of another 2012 style drought next year. Already fall rains have helped put some moisture back into the soil profile in some of the hardest hit states; but that Drought Monitor still shows more rain and snow will be needed.

While some of you reading this have probably made some pretty drastic changes in your buying plans for next year - especially livestock producers - crop producers may want to stick with their long-range equipment program. Evaluating this year's dent to your bottom line still makes the most sense, but as depreciation rules change in 2013 you may want to stick to the plan for at least another year if you're comfortable with your farm's debt levels.

Judging from the farmers visiting the three farm shows I got to attend, including Farm Progress Show and Husker Harvest Days, you're forging ahead. And in this business that's about the only way to survive.

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