Good News, Bad News, Topsy-Turvy Farm Prospects

Our tenant tells us that the farm's results and outlook so far this growing year are so completely opposite of what he usually expects that he hardly knows what to think about it all. Based on the achieved crop performances and prices, as well as the most likely future results, his best guesses are, well, no guesses at all. He just doesn't know. The following paragraphs should make this clear.

Excellent Wheat Results

The hard white winter wheat yielded 3.1 tons (103.33 bushels) per acre, which was the highest yield in several years. There was no striped rust, and the protein levels were over 13% in every load. The net price of $275 per ton meant that, for the first time in over 30 years, wheat became a cash crop - that is, a crop which provided an overall profit instead of fulfilling its usual role as a rotation crop whose only real value is as a soil improver.

Wheat Straw Sale

As he did last year, our tenant had his wheat straw baled. This year, the straw yield was over one ton per acre, as compared to last year's less than one half ton per acre. The price increased from last year's $65 per ton to $100 per ton. So the wheat straw, while a very minor factor in the farm's overall economic results, represented a startling improvement.

Water Money

The water shortage caused by the drought and the continuing Endangered Species Act nonsense has once again afforded our tenant an unusal income opportunity by allowing him to sell his Federal water allotment to another farmer in the water district. He uses the farm's deep well as the water source instead of using the water supply from the California Aqueduct. In fact, the farm has never even been hooked up to the aqueduct, based on our tenant's judgment 31 years ago that the Federal water supply wouldn't be reliable enough to justify the expense involved in bringing it to the farm. This growing season and last year's growing season have driven home just how sadly accurate that judgment was. You just can't safely place your trust in the U.S. Government's promises.

That's The Good News - Now For The Bad News...

In the glow of all the good news, you might have forgotten about the bad news. Unfortunately, there is plenty of that.

Poor Acala Cotton Stand, Continued Low Acala Cotton Price

Acala Cotton

Our tenant planted half of his cotton acreage to Roundup Ready Acala cotton. ("Acala" is what we in the San Joaquin Valley call our high quality upland cotton.) The complete absence of rain between February 24 and May 25, combined with an unusual cold snap just as the cotton was trying to emerge, caused the stand to be extremely poor. This picture is not a good representation of the true situation, as our photographer just can't stifle his natural inclination to get the best possible shot, regardless of the assignment. The price of upland cotton has failed to join the general commodity price boom, and is hardly better than it has been for several years. To say the very least, our tenant has reason to doubt his reasoning behind this planting decision.

Pima Cotton Stand Also Poor, Price Steady

Pima Cotton

Our tenant planted the other half of his cotton acreage to Pima cotton, our version of extra-long staple cotton similar to Egyptian and Sea Island extra-long staple cottons. Since it was planted at the same time as the Acala cotton, the planting results were just as dismal. Again the picture misrepresents the true condition of the crop, which is poor. Fortunately, the Pima price has held up well, and will probably once again be over one dollar per pound. Oddly enough, because of the increases in feed prices caused by both the ongoing droughts in many wheat growing regions, and the U.S. corn ethanol program, both the Acala and Pima seed recovered from the ginning process has increased greatly in value. While our tenant typically receives just enough for the cotton seed to pay for the ginning, this year he has contracts guaranteeing him between $40 and $50 per bale extra because of the value of the seed. Unfortunately, it doesn't appear at this time that he will have very many bales.

Ongoing General Cost Increases

Further complicating our tenant's farming operations, the costs of everything he needs to grow crops are increasing. Fuel, fertilizer, planting seed, electricity, labor, pesticides, and the provision of farm chemical applications are all more expensive than last year. Fuel and fertilizer are increasing at a mind-numbing rate. This all makes any profit-and-loss estimates so difficult that there is hardly any point in bothering with them. He is reduced to "riding out the storm" and counting up the results later.

Anyway...

HAPPY FOURTH OF JULY!