At the 2022 National Association of Farm Broadcasters conference in Kansas City, Farm Director, KC Sheperd, got the chance to speak with the Chief Economist and Head of Research for the Farmers Business Network, Kevin McNew about how Farmers Business Network aids farmers in making the best decisions for their operations.
“At Farmers Business Network we are about returning margin to the farm, and my job as head of data analytics is to understand what are their best choices, whether it is buying inputs, or navigating these complex markets that they are facing,” McNew said.
Because the drought has persisted for so long, and La Nina is persisting into the winter, McNew said he does not see much reprieve any time soon.
“But I do think that is going to be supported, especially as we turn our attention to South America’s growing season where they are probably going to struggle with the onset of La Nina in the winter,” McNew said. “I do think corn markets are going to stay very supported, wheat is going to stay a little bit supported, although I think wheat farmers are probably going to come back pretty strong in ’23 across the country with more wheat acreage.”
McNew said 2023 will be a challenging year, but it can be a profitable year for farmers, especially if they can manage the rising costs of fertilizer and chemicals.
“I think those will probably stabilize in 2023,” McNew said. “We are seeing chemical prices start to come down a little bit. Nitrogen based fertilizer probably won’t give us much relief here as we go into ’23, but I think crop prices are going to stay elevated.”
Margins for farmers should be good, McNew said, they just need to be managed appropriately. Going forward, McNew said he is urging farmers to pay attention to what is going on with interest rates.
“The cost of money has gotten so high with inflation and interest rates moving up,” McNew said. “If you are storing physical grain, that may be something you want to reconsider. We have basis levels for corn and wheat that are exceptionally because of the drought in the western plains so maybe let go of some of that grain that is sitting in physical storage to free up some of that cash and pay down operating notes.”
