Ag Ramble: Earlier Planting, More Bankruptcies, Good Used Tractor Sales…

South Dakota farmers are getting into the fields at a better clip than usual, and certainly better than last year’s rainy spring. According to the USDA National Agricultural Statistics Service, as of May 17, we’ve planted 67% of our corn, 40% of our soybeans, 91% of our spring wheat, and 17% of our sorghum. Last year at this point, corn was at 15%, soybeans 3%, spring wheat 63%, and sorghum 1%. The five-year averages are corn 59%, soybeans 27%, spring wheat 89%, and sorghum 12%.

For those of you hoping to get meat from somewhere other than the packing plant, the green grass beckons! Only 1% of pasture and range is in poor condition. 34% is fair, 54% is good, and 11% is excellent.

That we are ahead on average plating seems all the more remarkable given that on May 15, the USDA designated 17 South Dakota breadbasket counties as primary natural disaster areas due to excessive moisture and flooding. Producers in Aurora, Bon Homme, Brookings, Brown, Brule, Charles Mix, Clay, Davison, Douglas, Gregory, Hanson, Hutchison, Lincoln, Miner, Turner, Union, and Yankton counties, as well as contiguous counties, and wade in to their Farm Service Agency office and see if they qualify for emergency loans.

At the same time, as of May 12, Miner, Hanson, and Davison counties are on the south end of a lobe of abnormally dry conditions, according to the University of Nebraska–Lincoln Drought Monitor:

Alas, even if they can stay not too dry and not too wet, some of those dry farmers may not stay in business long enough to harvest their robust early plantings. Farm Bureau economist John Newton says coronavirus is piling economic strain on top of yeas of low prices and Trump tariffs:

“What we’ve seen is over the last 12 months ending March 2020 is Chapter 12 bankruptcies in the United States totaled 627 filings, that was up 23 percent. While it’s well below the levels we saw in the 80’s, it’s still the third-highest that we’ve seen in the last 20 years, so it’s a concerning trend.”

Newton says those bankruptcies occurred prior to the coronavirus pandemic, which has resulted in steep declines in commodity prices [American Farm Bureau Federation, “Pandemic Likely to Increase Farm Bankruptcies,” Hoosier Ag Today, 2020.05.19].

Nonetheless, ag auctioneer Steffes Group reports continued healthy demand for farm equipment, especially older machines:

During the first four months of 2020, the company conducted 170 auctions, all of which were successful. The company is conducting online auctions exclusively during the “shelter in place” period and has conducted online-only auctions for 11 years. Demand was strong for tractors, combines and sprayers throughout the period, regardless of the auction method. The company says well-maintained equipment with low hours commanded a strong premium. Even older machines did well in many cases, with sharp rises in tractors 15 years and older, showing great care [Todd Ingstad, “Farm Assets Resisting Coronavirus Impact,” NewsDakota.com, 2020.05.19].

Farmers may be able to spend more on those tractors if they can pivot themselves out of the ag-industrial complex and back to feeding their neighbors:

The weather is in growers’ favor in northeastern South Dakota. Many farmers in that area are finished planting before fieldwork could even be considered a year ago. Todd Hanten at Goodwin, which is near Watertown, South Dakota, is encouraged by a gentle rain, waiting for his late April-planted soybeans to come up.

…Hanten has delivered contracted fed cattle to his packer, although about 20 days later than he had planned. Hanten’s phone “is ringing off the hook” from people wanting locally processed beef [Tom Steever, “With Rain, South Dakota Farmer Says ‘Everything Will Be Perfect’,” Brownfield Ag News, 2020.05.19].

Plant the right crops, raise the right critters, and you’ve got buyers right down the road….