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Farm Outlook 2003: The business side of farming
By Jim Muchlinski
Marshall Independent

MARSHALL -- Global economics and worldwide farm production affect southwestern Minnesota every day.

Speakers at the recent 2003 Farm Outlook at Southwest State University looked at these and other aspects of the farming industry when telling farmers what to expect this year for livestock sales, crop marketing and farm profits. A point made throughout the day is to map out goals in a way that is suitable for the 21st century marketplace.

"In a free market, there's never a guarantee that we'll be able to make money or become successful," said farm economist Roger Wallace, who spoke about livestock marketing. "We have to put a lot of effort into business planning in order to keep doing what we do."

Wallace, who has a graduate degree in agriculture economics from Kansas State University, was one of the founders of the DTN agricultural information service. He served as DTN's chief market analyst until it was sold in 2000.

He also operates several farms in Nebraska with corn, soybeans and a large cattle feeding operation.

He said all of the major meat commodities have shown constant improvement in production efficiency at a time of less reliable market demand.

He sees potential opportunities in 2003 because of balanced supplies and a price structure that is more favorable than what was seen for much of the 1990s. Depending on what happens in the next few months, there may be greater potential than usual for extra income through livestock feeding and finishing.

Wallace said taking advantage of potential price opportunities depends on someone's approach to a marketing plan.

Jerry Gulke, the market analyst and owner of Strategic Marketing Services in Rockford, Ill., an agribusiness research and information services, said the same basic planning principles apply to corn, soybeans and wheat production.

He said many farmers and marketers are watching trends in 2003, such as a limited reduction in production carry-over from last year, a combination of static yields and modest prices for soybeans and high worldwide production with especially significant production growth in South America.

He said he has seen some instances of production plans based on all corn for 2003, largely because of the ability to try for high average returns for each acre. With any crop plan, Gulke said, it is critical to consider all of the factors that shape the market opportunities available after crops are harvested.

"There often aren't enough buyers when a large amount of commodities come on the market," Gulke said. "We have to watch for reactions. In a limited market, it's important to do something about protection by marketing in a way that should produce some type of return.

Gulke also operates a 2,000-acre corn and soybean farm in northern Illinois.

In discussing long-range farm goals, he said business plans along with land price cycles influence whether farm operations can generate the capital needed for success.

"It always takes time," Gulke said. "We all want to get to the point of being debt free. Then it gets much easier to compete in the marketplace."

Several hundred audience members from eight states attended the seminar. Money raised through the program helps to provide scholarships for SSU students. The Schwan Food Company matches all proceeds.

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Southwest Minnesota State University
1501 State Street · Marshall, MN 56258
Phone: (507) 537-6226
Fax: (507) 537-6147

Last updated: February 1, 2006