FROM THE MANAGER
Dear members
& patrons
w
ith cotton ginning winding down, we can
say for the most part we were blessed with
a bountiful harvest. However, throughout
our trade territory there were areas that did not
receive adequate rainfall at the right time, so yields
there were slim. It appears when we have good
production, prices are terrible and that is definitely
the case this year. We all witnessed profitable prices
early in the year to see them erode as world grain
stocks rose 30 percent. We also watched cotton
prices do exactly the same thing.
We had the chance to protect our corn prices at $6.00 and our cotton prices at $.82. Hopefully, we will get opportunities to price next
year’s crop at a profit. It is imperative that each and every producer
creates a detailed budget and try to figure his or her breakeven price
using an average harvest. When there is opportunity to start pricing
next year’s crop, we must be ready. Our grain division team will be glad
to help you in any way to manage your risk of prices dropping below
breakeven. As we look at December 2015 futures, there is hardly any
crop that can make you money. Input costs will have to drop significantly to help us out. I cannot stress enough that we have to establish a
marketing plan. We will be glad to assist you.
One bright spot is cattle prices, but remember where corn, soybean
and cotton prices were a year ago. If you have a cow-calf operation, or
if you are backgrounding your calves, please get them contracted or
hedged. As some of the folks used to say, there is a lot more air under
these cattle prices than there is over these prices. Cow-calf producers
should be hedging next year’s calf crop.
Just an example, with September 2015 Feeder Cattle futures trading
at $226.40/#, a $2.27 put would