ARM Strategic Alliance – June 24
This is the second installment of our newly launched blog. What we hope to do with this is give
guidance on pertinent issues in both the short and long term. Not all discussions/topics will be
of use for all our customers, but we ask you consider and apply as needed.
Crop Status and Market Outlook
The crop is hopefully planted and off to a great start. 2024 holds solid potential at this time for a good
to great crop. What if that happens…..? The amount of marketing you have done between January 1st
and the moment CBOT discovers we have a good crop could be critical to your success this year. How
much 24 crop have you sold? 50% sold is a respectable place to be today. If we are fortunate to have a
big crop this year we could see significant decline in current prices of corn and soy.
Global Competition
Consider the competition overseas. The $USD is currently very strong and still gaining on SA currency.
Until this changes look for China and other fair weather trading partners to go elsewhere for their purchases.
Selling the 23 Crop
Do you have 23 crop left to sell? The window is quickly closing on the rally seen over the past 6 weeks.
Hopefully, you were able to deliver and take advantage of the opportunity. If not, do so at once! When
considering interest cost and reputational risk, holding on any longer is not advisable.
Prevent Plant Acres
Did you prevent plant any acres? If so, contact your agent today if you haven’t already. It is very
important that you do the math beforehand when considering prevent planting options. If you need
to know how to calculate the various options, contact your ARM representative. We should be able to assist.
Equipment Inventory Challenges
You have probably seen the headlines regarding the equipment manufacturers’ current challenges with
inventory. There have been multiple layoffs due to lack of interest in new equipment. Conversely, many
farmers are simply passing on fleet upgrades and even opting to cash out equity on their current equipment
lines to raise operating capital. Crop marketing challenges from last year have created the need for equipment
secured equity lines of credit in some instances. If this is something you are considering, get that done sooner
rather than later. Once equipment inventory reductions start there is a fair chance that values will contract
and equipment equity may not be as appealing to lenders as it is today.
Wise Words
“Crop volume can overcome the lack of price more easily than price can overcome the lack of volume.
“That was said by a late farmer many years ago that was known by his peers as a cut above the rest. If he
were here today, he would encourage getting the most out of each invested dollar put into the crop. Forego
extras this year and hope the good Lord’s favor shines upon you!
In closing, you are encouraged to write in topics you would like to learn more about. We don’t claim to have
all the answers but we know where to look to find them…
I will leave you with a quote from General George S. Patton:
“A good plan violently executed now, is better than a perfect plan executed next week”
Sell some crop! See you next month!