The Last Time Oil Crashed

The last time oil prices dropped this fast was in 2008.  Remember 2008?  We have not recovered from it, if we ever will.

I posted this article in Market Talk and got some great feedback on the article.  We are all enjoying cheaper fuel at the pump right now as that frees up money for other purchases.  When gasoline drops in half in a short period, that event is going to affect a lot of other things, too.  It could also be a sign of some very bad things to happen.

"There has only been one other time in history when the price of oil has crashed by more than 40 dollars in less than 6 months.  The last time this happened was during the second half of 2008, and the beginning of that oil price crash preceded the great financial collapse that happened later that year by several months.

Well, now it is happening again, but this time the stakes are even higher.  When the price of oil falls dramatically, that is a sign that economic activity is slowing down.  It can also have a tremendously destabilizing affect on financial markets.  As you will read about below, energy companies now account for approximately 20 percent of the junk bond market.

And a junk bond implosion is usually a signal that a major stock market crash is on the way.  So if you are looking for a “canary in the coal mine”, keep your eye on the performance of energy junk bonds.  If they begin to collapse, that is a sign that all hell is about to break loose on Wall Street."

E-85 is $1.79 in Blanchester.  That's about as low as its ever been.  My picture shows what it was not too long ago!

The discussion on market talk is very interesting.  I have a lot of farmer friends who post there I trust.  They all have some interesting points.

The point is we are all enjoying this reprieve in fuel prices.  What are the consequences?  In our tightly connected world market, when one thing goes down, so do other things.  Those things may impact our income and even our retirement.

It all looks scary to me.

Ed

History of EWTN

I watch and listen to a lot of EWTN TV and radio.  EWTN has a very storied history.  It falls under the miracle category, too.

"When Eternal Word Television Network (EWTN) was launched on Aug. 15, 1981, many felt there would be little demand for a Catholic network. In fact, when Mother M. Angelica, a cloistered nun, fulfilled a promise to our Lord in the early 1960s by founding Our Lady of Angels Monastery in Irondale, Ala., she had no idea she would one day found the largest religious media network in the world.

Who could have imagined that a cloistered nun would found a global television network? Who could have predicted that a network funded entirely by donations from “people in the pews” instead of advertising would become the largest religious media network in the world? Yet that is the story behind the EWTN Global Catholic Network.

The future Mother Angelica, foundress of EWTN, was born on April 20, 1923 in southeast Canton, Ohio to Mae Gianfrancesco Rizzo and John Rizzo. The couple named their daughter Rita Antoinette Rizzo.

Realistically, no one could have expected the child to amount to much. Her parents were not religious. In fact, when Rita was only 7-years-old, her abused mother filed for divorce, which was quite a stigma in those days. Rita was so poor and her mother so mentally fragile that the child had to go to school and run her mother’s dry cleaning business at the same time. As a result, she was distrustful of outsiders, never made friends and never dated.

But Rita experienced two miracles in her pre-convent days, which changed her life. The first occurred in 1934. The 11-year-old adolescent went running for a bus – and missed seeing an oncoming car. When she finally saw the car, she froze. However, “two hands” pick her up and placed her on the median. The bus driver would later say he had never seen anyone jump so high.

Her second miracle occurred in 1942. For years, the teenager suffered from ptosis of the stomach, which made her hands shake, her left arm go numb, and her stomach spasm, which made it hard to eat or sleep, But after a visit with Mystic Rhonda Wise, Rita experienced a miraculous healing. That healing made her realize that God loved her personally – and she began to love Him back. Her love became such that on Aug. 15, 1944, she entered a Cleveland convent and became Sister Mary Angelica of the Annunciation, a Franciscan Nun of the Most Blessed Sacrament. The order would later change its name to the Poor Clares of Perpetual Adoration."

Look how the prayers of one woman changed people's lives to such a great extent by doing the impossible and going out and actually doing what the answers to those prayers said to do!

Blessed Sunday to you all,

Ed Winkle

Improve Your Soil With Radish

We've talked at great length about cover crops on this blog, especially radishes.  This article and video reminded me of the great topic of radish.

Over the past decade, radishes have been redefined; once known almost exclusively as a pungent vegetable, radishes have recently gained recognition for their cover cropping potential. After reading this article, you'll be able to make an informed decision about whether cover crop radishes are worth a try on your farm.

Radishes have made rapid inroads as a cover crop for several reasons. First, the radish phenotype is well suited to perform many valuable cover crop functions—provide soil cover, scavenge nutrients, suppress weeds, and alleviate compaction—while creating few of the residue management challenges associated with many other cover crops.

Second, recent research including many on-farm trials has documented beneficial effects of radish cover crops on soil properties and subsequent crops. Third, the seed industry has ramped up production of radish seed, brought new branded products to market, and promoted radish as a cover crop. Fourth—but perhaps most important in terms of the exponential growth in interest by farmers—radish cover crops have become a hot topic of discussion in rural coffee shops and on-line agricultural forums. Between 10/1/2011 and 12/1/2011, there were 51 threads about radishes in the Crop Talk forum of New Ag Talk, with over 500 responses and more than 240,000 views.

Radish have been one of the fastest adopted ideas I've seen in my lifetime.  There must be good reason for so many to try them and keep planting them.  When an old friend even plants them on his alfalfa hay farm, you know their characteristics must have spurred some interest.

We've been blessed to travel around the world to see radish seed production and meet the producers.  We haven't made a one of them rich but we have made their industry viable just like they are improving our crop production and soil health.

When I planted garden radishes as a child I never would have dreamed that plant family would have turned into something like this!

Ed

US 52% No-Till

"Soil health improves when farmers refrain from disturbing the soil. While no-till production systems are increasingly used on land in corn, soybeans, and wheat -- the three largest U.S. crops by acreage -- they are not necessarily used every year.

Field-level data, collected through the Agricultural Resource Management Survey, show that farmers often rotate no-till with other tillage systems.

Farmers growing wheat (in 2009), corn (in 2010), and soybeans (in 2012) were asked about no-till use in the survey year and the 3 previous years.

No-till was used continuously over the 4-year period on 21 percent of surveyed acres. On almost half of the cropland surveyed, farmers did not use no-till.

Some of the benefit of using no-till, including higher organic matter and greater carbon sequestration, is realized only if no-till is applied continuously over a number of years.

Nonetheless, because tilling the soil can help control weeds and pests, some farmers rotate tillage practices much like they rotate crops."

That's higher than I would expect, especially with all the tillage you read about and see.  If this is true, it is a good trend for soil conservation.  With the Marestail problem, I know a few who have went to some tillage just to try and control it.

I can see where today's economics help push no-till, because it's a potentially less expensive way to farm.  Less trips means less inputs into growing a crop.

Do think this number is fairly accurate for your area?

Ed Winkle

Global Meat Demand

Highlights from presentation by Brett Stuart, Global AgriTrends.

Demand side

·         Asia has more people than the rest of the world combined.  This population continues to grow and their income is also growing quickly as they become economic powers.

·         China has recently passed the US as the world’s biggest economy.

·         Demand comes from an increase in population and an increase in income – both are happening in Asia.

·         We (farmers globally) will need to produce more food in the next 50 years than the total food that has been produced over the last 7,000 years.

·         Global need (demand) will be 9 million more tons of beef over the next 10 years.

·         China has 300 million people in their middle class (equals total US population) and this will double by 2022.

·         Sheer numbers – the wealthiest 10% of China’s population represents more people than the total population of Japan

·         The Middle Class is globally 2 billion people today and is expected to be 4.9 billion by 2030.

·         The demand for beef is not only steady but growing.  As people move into the middle class, they want to buy beef.

·         China’s own beef production has kept up with demand in the past.  This is no longer the case.

o   Because of income growth, demand for beef is up 42% in China over the last 2 years.

o   Chinese consumers want to see white fat beef, not yellow fat beef, so they want grain fed and not grass fed beef.

o   China’s corn policy has their corn prices at $9.70/bushel to encourage their farmers to plant corn – this is forcing their own livestock producers to cut back production.

·     

I thought this was pretty interesting stuff, hope you enjoy it!  My livestock friends have been quietly and modestly happy because they quickly remember how it was before $8 corn.  Cost of production is still an issue and we haven't seen people rush in to produce much more yet.

Ed

60 Years Left

"ROME (Thomson Reuters Foundation) - Generating three centimeters of top soil takes 1,000 years, and if current rates of degradation continue all of the world's top soil could be gone within 60 years, a senior UN official said on Friday.

About a third of the world's soil has already been degraded, Maria-Helena Semedo of the Food and Agriculture Organization (FAO) told a forum marking World Soil Day.

The causes of soil destruction include chemical-heavy farming techniques, deforestation which increases erosion, and global warming. The earth under our feet is too often ignored by policymakers, experts said.

"Soils are the basis of life," said Semedo, FAO's deputy director general of natural resources. "Ninety five percent of our food comes from the soil."

Unless new approaches are adopted, the global amount of arable and productive land per person in 2050 will be only a quarter of the level in 1960, the FAO reported, due to growing populations and soil degradation.

Soils play a key role in absorbing carbon and filtering water, the FAO reported. Soil destruction creates a vicious cycle, in which less carbon is stored, the world gets hotter, and the land is further degraded.

"We are losing 30 soccer fields of soil every minute, mostly due to intensive farming," Volkert Engelsman, an activist with the International Federation of Organic Agriculture Movements told the forum at the FAO's headquarters in Rome.

"Organic (farming) may not be the only solution but it's the single best (option) I can think of."

Now I know most American farmers don't trust the FAO but you really have to think about their point.  The point is we still lose too much topsoil even with the advancement of reduced, minimum and no tillage.  I can lose a ton of topsoil a year with my no-till method but cover crops helps reduce that while providing other benefits.

You and I don't have to be overly concerned about 60 years from now but I do have 12 grand children.

I do care and I am concerned.

Ed Winkle

Indiana Illinois Farm Show

Next week is the Indiana Illinois Farm Show at the State Fairgrounds in Indianapolis.  It is held Tuesday through Thursday just like other farm shows like Farm Science Review.

"36TH INDIANA-ILLINOIS FARM SHOW SET FOR

DECEMBER 16 THRU 18 2014

WHEN THE 36TH EDITION OF THE INDIANA-ILLINOIS FARM AND OUTDOOR POWER EQUIPMENT SHOW MOVES INTO THE WEST PAVILION OF THE STATE FAIRGROUNDS, INDIANAPOLIS, FOR ITS ANNUAL 3 DAY RUN, TUESDAY THRU THURSDAY, DECEMBER 16 THRU 18, IT WILL GIVE AREA FARMERS THE OPPORTUNITY TO SEE EVERYTHING THAT’S NEEDED FOR THEIR FARM FOR THE NEXT PLANTING AND HARVESTING. THE SHOW WILL FEATURE OVER 350 COMPANIES SHOWING EVERYTHING THAT’S NEW; LONG LINE FROM YOUR JOHN DEERE, CASE AND CAT DEALERS, SHORT LINE, SEEDS, SUPPLIES, CHEMICALS, LIVESTOCK EQUIPMENT, GRAIN HANDLING, STORAGE, BUILDINGS, REPLACEMENT PARTS AND ALL THE NEW TECHNOLOGIES SO VITAL FOR PROFITS FROM COMPUTER SOFTWARE TO GPS SYSTEMS, PLUS GREAT DISPLAYS OF SELF-PROPELLED SPRAYERS, SEED TENDERS AND AN OUTSTANDING SELECTION OF OUTDOOR POWER EQUIPMENT.

ACCORDING TO SHOW MANAGER RICHARD SHERMAN, “ALL OF OUR EXHIBIT SPACE IS SOLD OUT, THE FULL 170,000 SQUARE FEET, WITH SOME COMPANIES EXHIBITING FOR THE FIRST TIME,

WE WILL AGAIN HAVE A GREAT FREE SEMINAR SERIES COORDINATED BY GARY TRUITT OF HOOSIER AG TODAY, WHICH WILL FOCUS ON TWO OF THE HOTTEST TOPICS IN AGRICULTURE TODAY, DRONES AND THE NEW FARM BILL PROGRAMS. HOURS ARE FROM 9:00 AM TO 4:00 PM ON TUESDAY AND WEDNESDAY AND FROM 9:00 AM TO 3:00 PM ON CLOSING DAY, THURSDAY, DECEMBER 18. SHOW ADMISSION IS FREE BUT THERE IS A $5.00 PER VEHICLE FEE TO PARK ON THE FAIRGROUNDS."

I will be talking about gypsum and anything you want to talk about at the AgroSoil booth, so look us up!

Ed

Save Your Own RR Soybeans

The University of Arkansas System Division of Agriculture has released its first soybean variety that features Roundup Ready technology.

Division soybean breeder Pengyin Chen said the new variety, called UA 5414RR, offers the weed control advantages of Roundup Ready soybeans without the added cost of technology fees. He said growers could also save seed from each harvest for planting the following year.

Monsanto’s patent on the first generation of Roundup Ready products expires in March 2015, Chen said, and the company shared the breeding material with public breeding programs, including the Arkansas program directed by Chen. He said UA 5414RR fills a niche for growers who want to use the Roundup system of weed control but don’t want to pay the higher cost of the next generation Roundup Ready 2 Yield technology.

Chen said Monsanto’s first generation Roundup Ready products have been replaced by Roundup Ready 2 Yield products and will no longer be offered.

I am surprised to see this with all of the discussions that have been made on Crop Talk.  I know its only one variety that is planted in an area where Liberty Link soybeans have really taken over their market, but still it is notable.

However, this Monsanto release says: 

"Farmers and Saving Seed
The first possibility of planting seeds saved from Roundup Ready soybean varieties will occur in spring 2015 (using seeds from the crop planted and harvested in 2014). Farmers who are interested in replanting saved Roundup Ready soybeans will need to check with their seed supplier to find out if the variety they are interested in can legally be saved and replanted. In addition to the trait patent, most Roundup Ready soybeans are protected by other forms of intellectual property, such as varietal patents. These variety patents will continue to be valid after (and usually long after) the Roundup Ready trait patent expires.

Farmers will not be able to save seed from Genuity Roundup Ready 2 Yield soybeans, either now, in 2015, or for many years beyond that. The Roundup Ready soybean trait and Genuity Roundup Ready 2 Yield soybean trait are protected by different patents. The trait patents on the Genuity Roundup Ready 2 Yield trait are not expected to expire until near the end of the next decade."

Will you plant these soybeans and save your own seed or have you switched to other systems?

Ed Winkle

Adopt A Family For Christmas

LuAnn works with many poor and down and out families at Turning Point.  In recent years, our children has adopted one of those families for Christmas.  They teach their own children the value of helping others and the grand kids get involved.

This year our family lives in an old hotel in Hillsboro.  They are a young couple with a seven year old from a previous relationship and a newborn.  They have basically nothing on this earth.

When LuAnn's staff member asked them if our family could adopt them for Christmas, the young couple just bawled.  "No one has ever helped us" was there response which we hear too often here in southwest Ohio.

Good jobs are few and drugs abound in rural Ohio and many states.  There are a lot of innocent people who suffer because of this and even when the family is in recovery, it's difficult.

I am so proud of my family for thinking of others before themselves.  They find it easier to help a stranger than try to decide what every family member might appreciate from them.  We keep our gifts modest and special.

We give to many good local charities but this is one little special thing our family does in style.  I know they are touching people, I see the result.  I can't think of a better way to celebrate Christmas with blessings our family has.

Have you ever considered adopting a family for Christmas?  There are many LuAnn's in every county who can help you find someone really in need.

It's one of the neatest things I've ever saw.

Blessings,

Ed Winkle

Inoculate

A new report published by Markets and Markets projects the agricultural inoculants market to reach $398.56 million by 2019 with a compound annual growth rate (CAGR) of 9.5 percent from 2014.

“Agricultural Inoculants Market by Type, Source, Mode of Application, Crop Type, and Geography – Global Trends & Forecasts to 2019,” projects that Latin America will emerge as the fastest growing region with a CAGR of approximately 10 percent from 2014 to 2019.

According to the authors, “agricultural inoculants are gaining popularity because of their multi-functional benefits to plants in sustainable agriculture.” Growth of the agricultural inoculants market is primarily triggered by factors such as rise in cost and demand for chemical/mineral fertilizers and pesticides and increasing awareness about the organic farming practices.

“Even though there are number of products available in the market, the inoculants market is under-explored,” report the authors. “Lack of awareness among the farmers and prevailing problems within marketing and distribution are restricting the availability of inoculants at the farm level.”
The report is available for purchase by Markets and Markets.

The company I have always used most is ABM or Advanced Biological Management in Van Wert, Ohio.  Their inoculants have made me and my friends money and they continue to lead the field with new products.

I studied inoculants very diligently for many year but found what I liked and kind of gotten complacent the past few years.  I trust my sources and you can't find a better inoculant than ABM's in Ohio.  There are probably several as good today but I have not kept track of them.

Do you use inoculants?  I am not sure I know many who do not today.

Which have you settled on?

The seed dealers have captured a market by selling the farmer a deluxe seed with inoculant, fungicide and even insecticide sealed on every seed with a polymer.

Don't speculate, inoculate!

Ed Winkle

OSU Soybean Performance

The 2014 Ohio State University Soybean Performance Trial results are out.  It looks like we may indeed have a winner with the new Clermont soybeans introduced by the university last year.  Their single year and combined results are impressive.

Clermont is a new 3.9 soybean for the southern tier.  I was impressed with them the first time I walked them in the summer of 2013.  I knew I had to try them.

I did try them this year and they looked good from the day they emerged.  They are just one of those good thriving soybean varieties here and the results in the links proves their potential.  It's really good when a bean looks good and the performance matches their looks.

If you can plant a 3.9 non GMO soybean, I encourage you to try them.  I can connect you with my local soybean seed provider if you are interested.

Look at the yield range from top to bottom!  There is a huge difference between the top yielding soybean and the lowest yielding soybean in these trials.  It behooves the farmer to really seek out the best varieties for his farm!

I have a leg up on you, I walk seed varieties every year and follow their performance.  You need to find someone you trust who does what I get to do.  There are many good people out there but many are stuck selling what they raise or what their employer raises or recommends.  I don't have to do that.  I find them and try them on my own farm.

Consider Clermont soybeans in your lineup next year.  I think they have earned their place to be there.

Don't forget today is World Soil Day.  It doesn't matter what you plant if you don't know your soil.

Ed Winkle

I Have To Get Tougher

I have to get tougher about this farming business.  2013 caught me off guard and I lost money.

Losing money farming is not unusual but when you've really never lost at this game before, it can wake you up.  It woke me up.

What I did wrong is I planted one farm to corn and never priced it.  At planting, I never dreamed corn would go to $3 but it did.  I was distracted for sure but that's no excuse.  Either you are farming for profit or you are not.  I farm for profit but I let my guard down.

I got complacent, money was fairly easy to make farming the past ten years, at least for me.  Everything I spent returned a dividend.  This year it did not.

We made our most money on soft red winter wheat this year and you know how poor that market has been.  I have a lot of interest in our excellent non GMO soybean seed so it may make up some of the difference.  Our loss is in corn and even if I had priced it early, I would not quite made back what we invested in it.

Even if I hadn't planted corn or gambled and sold my production before planting, I would not have broken even.  Inputs were just too high priced this year for the returns.  This is with really good yields, too.

It is impossible to show a profit for corn for 2015 also.  I wonder how much that will affected planted acres.  It really doesn't matter what you plant next year, nothing is very promising.

I hope this all turns around for the young guys because we need them.

No one can work for a loss very long, though.

Ed

3 Million Pageviews

We quickly jumped from 2 million to 3 million pageviews of this blog this year.  I personally thank every single one of you who believe in me to read a snippet of what I think.  That in itself is very humbling.  I don't know if you can see this or not but I will link the total here.

I started this blog six years ago come January 1 on a dare from my wife LuAnn.  I didn't even know what a blog was.  I think she was tired of hearing my stories and wanted me to put them on the Internet so she could distract me!

It's a cold old nasty almost winter day in far southwest Ohio but we are toasty warm with our Merrimack insert and Countryside corn burner.  We like to keep the propane delivery visits down to a minimum and we have done that but that propane furnace and heat pump has kept this old 1880 4 brick home comfortable until I tend the stoves.

I got the Merrimack the hottest I have in its short life here in Martinsville last night.  It was so hot I had problems putting more wood in like I used to on the old Defiant wood stove before we retired to bed.

I have been crunching numbers this morning and trying to figure out how I dig myself out of the hole I dug this year.  My corn crop was lousy, just too much rain.  I should have made that gut decision I had in April to switch to soybeans.  That would have been a good move.  I never anticipated the $3 corn we had this year and never dreamed our good country could raise 175 bu per acre nationwide but we did.

I am not sure how we are going to do this.  Many farmers are planting all beans next year but that is not what the market is saying either.

I am prepared to plant beans or corn depending on what happens between now and planting time but it is leaning strong towards beans today.  If I can them in on time, I have enough good wheat seed to plant more wheat next fall.

3 million pageviews just blows me away.  That's a few more than the students I taught over 31 years.

Is that anything like 3 million corn stalks?

Ed Winkle

This Ticks The Farmer Off

Farmers are ranting about this article on Crop Talk this morning.  Even if there is a grain of truth in it, it does not represent what most of us posters on Crop Talk do or believe in.

"This has got to be the dumbest Article I have ever read

So your telling me that it takes $435000 to put a yield monitor and auto steer in a combine. HUH. I was thinking more like under $15000

And what's so special about the Tim Kip d bag

I can count 5 operations within 30 miles of my operation that are running 12-20K and I know for a fact not a single one of them would say technology is what puts bushels in the tanks. It's weather. Heck half the time these big guys don't farm a piece of ground long enough to ever get enough data to switch management decisions on fert (LOL if they even use P and K), seed. Etc

There are also farmers in that 1000 or so acre and under category that have more toys and technology than the guys twice or three times their size. WHY you ask. Because the smaller guy is probably pulling down 200K of off farm income with benefits and retirement, owns most or all his land, and needs that technology because he has less time to be in the field

There are smaller operations netting 2-10X more per acre than the bigger guy down the road. When your equipment is lean and mean and paid for, and the land you farm is paid for and in great shape you have a competitive advantage for sure

The article totally missed the trend in AG. The little guy is still going to be around. Matter of fact those 1000-1500 acre and smaller crowd is growing. And yes the big guys are getting bigger and consolidation is happening too. The guy that's going to get squeezed is the all cash, non diversified, very little equity middle sized guy that can't afford to grow any bigger because of the huge capital infusion but is too big to be lean and mean like the little guy "

One of the largest farm operations in Ohio is cashing out this month.  The partners want a new life compared to chasing acres from Liberty Indiana to Madison County down to the Ohio River.  They were always near the top of EWG's famous farmer slam rankings.

This is occurring in other places too and the article doesn't get near that topic.

I vote for the little guy, I always did and yes I am one.

How about you?

Ed Winkle

Scout Your Fields One More Time

I found this article thanks to my friends at AgFax and I like it.  It is about scouting your wheat fields one more time before winter sets in but I think it really applies to any field.  It's the first article in the link but there are several good articles there.

The more time I spend in my fields, the easier it is for me to answer the question of where do I spend my money for next year's crop.  I like the way my fields look today.  I have plenty of residue and few weeds from last year.

Today would not be a good day to this in Ohio.  You might get shot!  It's the first day of deer season and I hope Eric gets one this morning.  He heard some shots close to the farm he is hunting this week last night so I went to check it out.  Whoever shot their gun was gone by the time I got there.

It was hard to pick out just where to put his deer stand but we know the deer's walking pattern on that farm.  There are lots of good spots near the one creek that goes through it and there are several.  It's in a 30 acre woods overlooking a 30 acre bottom.

I liked what I saw on the ground and we covered most of it.  The wheat crop residue is melted down very well with nice soybean stubble sprinkled on top of it.  It is ready to no-till into corn or soybeans.

My corn residue looks good too but it looks old fashioned compared to some of my neighbors.  I have a lot of corn stalk mass sticking up in the air and covering the ground.  You have to scratch to find the soil and I like that.  It can slowly rot all winter until it warms up next spring.

Some neighbors have a chopping corn head now and their fields have no stalks sticking up.  It looks like it has been chopped to the soil surface.  It looks pretty but is not as nice to no-till soybeans into from my experience.

What do your fields look like today.  Are you ready to go planting in April 2015 if weather allows?

Ed Winkle