Most farmers and agri-businessmen would probably agree that it is not "business as usual" in the field of agriculture. The volatile commodity markets, the mess in the financial world and the dramatic increase in input costs have put a new level of stress in agriculture and upped requirements in management skills. One item that probably will not change will be small profit margins. As input costs catch up to commodity prices, we will be back to the typical scenario of small profit margins, but only at a higher plateau.
Developing marketing plans for the commodities we grow is getting more difficult. Marketing tools such as options and the futures marketing are getting more expensive as the markets become more volatile. It is also getting harder to predict seasonal trends in markets because of all the outside influences in the market. It is not uncommon to hear marketing specialists indicate they are unsure of the direction of the market. Most grain was sold last year before the price increase and probably not enough grain was forward-contracted this year.
Renting or buying farmland is certainly not business as usual. The average value of cropland in North Dakota increased to $800 an acre in 2008. That was an increase of 19.4 percent from 2007 and 31.1 percent from 2006. Cash rent increased by nearly 10 percent in the past year and 15.4 percent in the past two years. It is not unusual for farm land to change in value, but once again there can be outside influences that affect the price. These influences can be wildlife interests or individuals outside of agriculture looking for ways to diversify their investment portfolio.
The Ward County Extension office will be holding meetings this winter to address many of these changes in agriculture. The Crop Opportunities in '09 meeting in Kenmare and the annual Ag Improvement Association meeting in Minot will both address budget and marketing issues.
(Mike Rose is North Dakota State University Extension service agent for Ward County.)