Managing for the unknown: Markets and weather
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EmailAmple precipitation and commodity price are two of the primary factors that impact the producer’s bottom line. In the 2012 growing season, we experienced a great deal of variability in both.
While we don’t know what challenges the 2013 season will bring, we do know that when we are armed with knowledge, we can make informed decisions on how to manage for these risks.
Dr. Jim Hilker, ag economist at Michigan State University, provides projections for market prices on commodities. His most recent prediction for corn price is:
“There is a 10 percent chance that the price of corn will be higher than $8.17 and a 10 percent chance that the price will be less than or equal to $6.39. This indicates that there is an 80 percent probability that the price will fall between these two prices. There is a 50 percent chance the price will be less than or equal to (or greater than) $7.22.” Read more on Hilker’s probabilistic price forecasts for corn.
While this may not narrow the field down a lot, it does provide parameters and management decisions can be made with this knowledge.
The 2012 growing season brought severe drought conditions across much of the Corn Belt. The current NOAA drought outlook map, through March 2013, has most of Michigan without drought. The southwest region, where the drought was the worst in 2012, is listed as “drought likely to improve, impacts eased.” Yet seasonal snowfall totals this winter in southwest Michigan are well off the normal pace.
With conflicting signals on the weather front, we know that anything we can do to increase the soil water-holding capacity would be a plus. Even slight increases in soil organic matter and soil structure can provide benefits. Cover crops on the soil surface can help water to infiltrate rather than run off, helping to provide a more even distribution of soil water across the field.
Arming ourselves with knowledge is a first step. That’s why Michigan State University Extension is bringing together farmers and agricultural professionals with interests in various major agricultural commodities to learn more about the changes on the horizon. The Growing Michigan Agriculture Conference will take place Jan. 24, 2013, from 9 a.m. to 3 p.m. at the Lansing Center in Lansing, Mich.
This one-day conference is jam-packed with timely information from MSU educators and nationally renowned speakers that will help Michigan producers maximize their farms’ potential. Two of the speakers will address the risk areas discussed in this article: markets and soil management.
Join us to hear from MSU’s Dr. Jim Hilker and a team of MSU specialists who will discuss volatile commodity prices, increasing on-farm storage capabilities, exports and a structurally changing global feed industry. All of these factors can have an impact on farm-gate commodity prices.
Dr. Don Reicosky, soil scientist emeritus, USDA Agricultural Research Service, will share his expertise on managing soils to increase organic matter and soil water holding capacity. Reicosky has shared his research and practical management practices with farmers around the world. Join us and see if there are things you can do to give your crops just a little extra moisture in those dry years.
The conference registration fee is $50 and includes lunch. You can register electronically by visiting http://bit.ly/MSUGrowing, or you can contact Megghan Honke at honkemeg@msu.edu or 517-353-3175, ext. 229.
