NE
Pro Farmer had a corn yield of 172.0 bu/a corn and 49.7 bu/a soybeans. This compares to the Aug WASDE of 175.1 on corn and 50.9 soybeans. It is important to remember, in 2022 USDA gave a final corn yield of 173.3 bu/a compared to the 168.1 bu/a in the 2022 Pro Farmer crop tour results. Heat and drought could drive national yield lower, or it could not.
Barges are already having to limit load size due to low river levels. With little rain in the forecast, this could negatively impact basis in the middle of the country as we stockpile crop.
The Fed met last week and mentioned again the U.S. economy isn’t slowing down. After the meeting closed, chances for a rate hike in November went from 10% to 42%.
SW
Consider this scenario:
A $400,000 new tractor purchase having a standard 20% down payment on a 5 year loan. You can depreciate this and it may reduce repair expenses on an older piece of equipment. (No trade-in with this scenario.)
80a farm purchase at $10,000/a with a standard 35% down payment on a 30 year loan. Interest is written off and there is additional income produced by the asset.
Look how the the loan payments impact cash flow.
If you are in the market for farm ground or trying to expand the operation, equipment purchases can be a crutch. Yes, we all need equipment to farm and newer technology makes a world of difference. This is just something to consider.
Have a great week!
Grant Wiese