Farming Podcast | Crop Planning Mistakes to Avoid In 2026 | XtremeAg

00:00 Marketing, management, manpower, machinery, money, the decisions you will make on all of those topics if you're thinking about switching your 00:00:07 intention on planting and what crops you're going to put in in the year 2026. That's what we're covering this very special episode of 00:00:15 XtremeAg's Cutting the Curve. Welcome to XtremeAg's Cutting the Curve podcast. Where real farmers share real insights and real results to help you 00:00:24 improve your farming operation. And now, here's your host, Damian Mason. 00:00:31 Hey there, welcome to another fantastic episode of XtremeAg's Cutting the Curve. This one might be dated by the time you hear it, but I don't think it is because 00:00:37 we're not talking about just markets, we're not talking about just grain markets. We're talking about this overriding theme that we've heard a lot. 00:00:44 Okay, we've got this turmoil in the Middle East. We've got fertility issues that we may not get supply. We've been hearing this actually for a while. 00:00:51 That's why this topic is pertinent no matter when you're listening to it because in 2018, we had supply shocks with the first Trump trade war. 00:00:58 Then we had the whole COVID thing. We're not going to be able to get inputs '21, '22. Then we started talking about, okay, are farmers going to switch acres? 00:01:04 If you're contemplating switching acres, maybe you've already made your decision, it's spring. Maybe you haven't. Either way, you need to listen to what we're going to say right here because I got 00:01:12 two experts. I've got Adam Ulrich, he's an attorney, but he's also a big farmer in Iowa, and he's also become more and more of a contributor here at XtremeAg. 00:01:19 We had him on at Commodity Classic. He did some great stuff for us in our booth down there. He's joined by Jarred Creed. Jarred Creed is with JC 00:01:26 Marketing? JC Marketing Consulting. JC Farm Advisory. I always forget what it is. Advisors. 00:01:33 Yeah. Anyway, he's the business advisor to Kelly Garrett. Garrett, Kelly Garrett is the owner of XtremeAg. You know him. 00:01:39 He's been on the show a number of times. So what we're talking about, if you're going to switch acres, maybe it's 5% mix, maybe it's 10% mix, whatever. We are recording this on March 31st. 00:01:48 This morning, the Prospective Plantings report just came out. The numbers say that we're going to plant less corn than what was done 00:01:56 last year. Also, what was also already the estimate. We got the prospective planting, the trade expectation, and the USDA estimate. The prospective planting for corn went to 95.3. 00:02:05 USDA estimate ahead of time had been 98.8. Soybeans go to 84.7. USDA estimate before the Prospective Planting report had us at 81.2. 00:02:15 So we're talking about gaining three and a half million acres of soybeans and dropping about three and a half million acres of corn. 00:02:21 Wheat's going to go down by one and a half million acres from the USDA estimate to the prospective planting. 00:02:27 Whatever those numbers are- And Damian, for your listeners, that's your year-on-year change. Year-on-year change. 00:02:33 It's your year-on-year change. So let's get right into it. No matter what those estimates are, let's talk about you and your farming operation. If you're thinking about changing things because of 00:02:41 profitability, et cetera, et cetera, there's the grain marketing, there's the management, there's the money, there's the machinery, there's the manpower. 00:02:47 So I'll start right into it. The first one I was going to do was manpower, the decisions you have to make there. Adam, you're a farmer. 00:02:53 When you start looking at making a change on what you're going to grow. Kelly went almost cold turkey on soybeans a year or two ago. 00:02:59 Went from having them as 40% of his mix to almost none. It changes what your people do. What do you think about when you think about manpower on your farming operation based on what you produce? 00:03:09 Right. So corn takes more manpower, right? It's pretty easy. The change you refer to with Kelly last year, that's a good 00:03:18 example. But that was planned out. I don't want to speak too much for Kelly. Creed can jump in a little bit on that, but that was definitely planned. 00:03:27 He knew he was going to be doing that way before March 31st. Yep. 00:03:32 So, I'm going to say that most listeners, in fact, the farmer in general, almost overwhelmingly, probably not changing a lot of acres right now. 00:03:44 And over the last 20 years, the March report is within about one and a half to 2% of the accuracy of the final 00:03:53 acreage. Yep. So any wiggle room we've got, we probably don't know the difference today to final acreage anyway. 00:04:05 Manpower, you've got to have those guys available if you're going to do more corn, more corn on corn. And they need to be busy right now if we're going to do corn on corn 00:04:14 in our area. Yeah. And of course, this is maybe a decision that you're saying, "Hey, I don't have a bunch of hired help. It's just me and my brother, me and my mom, 00:04:22 dad," whatever that thing is. But the point is, if you're going to make changes, there's going to be the issue of, 00:04:27 do you have more or less labor? What if you're switching off, obviously soybean acres grew, and 00:04:32 there's obviously going to be a lot fewer acres of that. Creed, if I'm going to switch over to soybeans, 00:04:39 or some other crop that produces less quantity, do I go get a part-time job? Do I fire my hired man? What do I do? It's a highly unlikely situation that's going to happen because you're talking 00:04:51 about a snapshot in time one year. And the day-to-day job on the farm is obviously never going to slow down regardless of what the crop is 00:04:58 that's going to be planted. I personally don't know of any stories about that, of even operations that are going to grow a little bit more soybeans that are 00:05:08 already planning on needing less labor. And in today's ag market, it certainly feels like one of the worst things that you could possibly do is shoot yourself in the foot long term 00:05:19 by letting go of some good help. I see that being one of the very last economical expense cuts that an operation may make. 00:05:33 It's tough. It's very tough to find good help on the farm anymore. Even in spite of the automation, et cetera, et cetera. 00:05:41 If you've got to have hired people in this business, then it's the kind of thing where at this point, it's more specialized. 00:05:46 We're not talking about bringing in somebody to pick cherries for a week. We're talking about somebody that's probably with you year-round in this scenario. 00:05:53 Correct. Adam, machinery. You always said in one of our prior recordings, "I'm not a machinery guy yet." There's still a picture of a tractor 00:06:02 behind you. There's a picture that some little kid drew of a combine behind you. You're a machinery guy. 00:06:07 If you're going to make a decision on your cropping, and again, maybe it's not this year. Maybe you're just thinking long-term here. 00:06:12 Machinery's obviously a very expensive line itemIt's a depreciating asset, which is neat to have the depreciation on your taxes when you are in a really flush year, but we're kind of in a more challenging year right now. 00:06:24 Do you make machinery decisions now? Do you make machinery decisions moving forward and say, "We're going to change our cropping system to get rid of some machines or to pare back 00:06:32 expense on machines"? How do you think about machinery as an item on the cropping mix? 00:06:38 Well, I have that tax hat on quite a bit, so I probably think about the tax side of it too much. With 179 in bonus, 00:06:48 equipment's attractive if you need it, right? But I would say- To the person who doesn't know what you're talking about, 179's a tax code, and it 00:06:57 speeds up your depreciation on your taxes. Is that the right- You can take... So instead of a five-year class life on a new 00:07:03 tractor or a seven-year class life on a used tractor, you can take it all at once, or you could put 70% of it up front. 00:07:10 You can kind of do whatever you want to do. But outside of that, we don't want the tail wagging the dog on the machinery. So I think right now 00:07:22 we want to focus on efficiency rather than the growth of the equipment line for most people. So I'm not real concerned about going out and 00:07:33 now's the time to buy another tractor, especially with all the tariffs and what's going on overseas. I think you want to be a little 00:07:40 careful with equipment. If you don't absolutely need it, I would hold off. 00:07:46 No matter what your cropping mix is. Right. I don't think that... And especially March 31st, today, you don't want to be the guy that's in a big hurry to go buy that tractor. 00:07:57 I think if it's something that you're going to be looking at long-term, fine. Trading, absolutely. But you probably want to negotiate hard. 00:08:05 The thing that puts this equipment market in kind of a weird scenario is we've got tariffs on the new stuff. 00:08:13 So dealers aren't really wanting to back off of that too much, but they've also got a glut of inventory. 00:08:20 So that late model used, you could probably find some deals in there, but it's held pretty strong. I think with that new coming way up, used market stays 00:08:31 strong. So corn on corn obviously takes more equipment. Yeah. But you might want to look at, what can I rent? 00:08:39 They've got stuff sitting around. You could go to that dealership and say, "Hey, let me rent one of these for 100 hours. Let's do 00:08:47 a low-hour lease." That's way better, in my opinion, today, a short-term horizon than sticking all that money 00:08:55 into equipment or borrowing the money to do the same. Jared, what are you telling your clients right now? Obviously, you advise farm operations in multiple states, and 00:09:04 it's on the business side, the money side, et cetera. What are you telling them about machinery? I'm going to make a call. 00:09:09 It doesn't need to be tied into whether you're switching acres- Yeah 00:09:13 ... like you said. By the time someone's listening to this, their acre decisions may or may not be made, but it's still very pertinent moving forward. 00:09:19 A couple comments, and then I'll almost flip it back to the question a little bit to Adam here. 00:09:25 The farmer, in general, held off marketing a lot of the 2025 crop for an extended period of time, and we raised a lot of it. And at the same time, maybe a little bit of a price increase, 00:09:37 but a whole bunch of different fund sources to a significant piece of Midwest agriculture, from ad hoc programs, maybe crop 00:09:48 insurance monies, farm program monies at the end of the year, coupled with the price increase, coupled with 00:09:55 probably a little bit of a heightened sense of I need to market more of this next year's crop a little bit sooner after last year's February highs, never been done, and go 00:10:06 lower. What I'm getting at here is I can already sense there's going to be this wave of cash income that the farmer's going to receive in 00:10:17 2026 from old crop, new crop, and all this other stuff that they probably need to speed up or push up their pre-tax appointment just a little bit 00:10:28 earlier than years past. Because one of the first questions, Adam knows this, he's been in the business long enough, farmers like new 00:10:36 paint. And that might be one of the first avenues that many individuals go chase, take away Uncle Sam. 00:10:45 And I still think that the big boom year, whatever you want to call it, from 2021 to 2024 00:10:53 timeframe, there was probably upgrades that were made that were a little overkill, and buying them in the good, paying for them in the bad, 00:11:05 resulting in much elevated equipment expenses in the here and now. Now, there's still always that argument, "I need it. I have to have it." That's one thing, 00:11:16 but the efficiencies that Adam mentioned is probably more important than anything, of making sure, 00:11:22 A, do I need it? And B, what other avenues do I have to, again, chase away Uncle Sam without hindering myself in the future? So again, comments and question 00:11:33 back. I don't know if Adam is sensing that yet, because again, it's March 31. 00:11:39 But there's this whole big bucket of income that the farmer does not have the ability to manage when he receives it 00:11:49 because of crop insurance and government money- Yeah ... with the adoption of all these different programs. So of course, your bigger point here, Jared, is you think there's going to be a 00:11:59 tendency for some operators that were concerned a couple of months ago, "Oh my God, I'm not going to have any money." Then we got some commodity price rising because 00:12:07 there's some turmoil in the Middle East, right? So there's going to be rising commodity prices. They're sitting on stuff that was unsold from last year's crop. 00:12:13 They're going to sell that into a profitable situation, and then they're going to- No, I'm not talking about being cash flow positive in such thing. 00:12:21 There's a critical difference here. There's no doubt about it, the margins are still incredibly razor thin, if not negativePlenty of operations across the US, not to skip ahead to 00:12:31 money, but talking about equipment, I don't even want to guess what the percentage of US operations are that did not fully pay back 2025 operating money. 00:12:40 Yeah. It can be in roll form. But there's still the tax situation versus dealing with the banker, and those are two different pieces. 00:12:50 And I guess all I'm getting at is once the crop is planted, take a good look at what you have in front of you and go ahead and get that 00:12:58 pre-tax appointment scheduled now- Mm-hmm ... rather than dealing with it at the end of this year, because I can just see the writing on the wall. Good crop, decent prices, maybe we make some 00:13:08 money and have all this other money that comes into us, and we just- Other money being some crop insurance or maybe this $12 billion from the federal 00:13:16 government in an ad hoc payment, there's going to be another one possibly by the end of the year, and you think there's going to be this tendency to want to get 00:13:22 that burned off so you don't have a tax liability. Potential. Not for everybody, but potentially, yes. And the tendency is to go and buy machinery. 00:13:31 That's usually the tendency. Farmers love the iron, and you said that. I'm taking that picture down for next time. 00:13:40 But that's the first place they go. But that's a great point that Creed made about do that pre-check a little bit sooner because 00:13:52 they love to go buy that equipment. They can be stuck with that. It's a depreciating asset. There's a lot we can do. 00:13:57 You can do deferred contracts. Right. We can prepay. Farmers have so many options. It's not just equipment. It's not- 00:14:05 They like to buy equipment and then justify and pretend that they had no choice from a financial situation. But the reality is, as we said when we were down there 00:14:13 in San Antonio, Adam, we were right there by our friends at Fint, across the aisle from our XtremeAg booth, and I told our friends, Brandon Montgomery over 00:14:20 there at Fint, I said, "You want to sell equipment?" I said, "Let me just help you out here. Get the biggest thing that you make," because farmers not only love iron, 00:14:27 they love bigger, and the bigger the better, right? And I said, "Then put a trophy for high yield as the hood ornament." The biggest piece of equipment with a trophy 00:14:37 for high yield as a hood ornament, and then if you could put something about thank a farmer on the side of it, you wouldn't be able to make these tractors 00:14:46 fast enough. Anyway, I do digress. I would say if you're on the equipment, if you're going to spend the money on the equipment, maybe you start with precision. 00:14:57 More of the precision over the iron itself. And we saw a lot of that at Commodity Classic, right? There's so much that can be done with precision. 00:15:06 Yep. So let's focus- If you're going to spend money on machinery, make it stuff that's maybe not great big iron stuff, but more importantly, the precision stuff that obviously reduces 00:15:15 your input spend, et cetera. I like the fact that I still say something every now and again that makes Jarod laugh. It makes me think I still got it. Anyway. 00:15:21 I think there's one other thing to add into the equipment space. And again, this is all recent, end of last week into March. 00:15:29 There's still possibilities coming here from regulating diesel exhaust fluid and the farmer's right to repair- 00:15:37 Yep ... that perhaps some of those changes can come down the pipeline. That's going to not only have an impact on used machinery expenses- 00:15:47 Yep ... but at the same time, maybe extend the life of some of this equipment that the farmer can't actually carry. 00:15:53 So that's a story for another day, but it seems like we're maybe trying to make the proper steps there, even though that's a huge hill to climb. 00:16:02 I want to get into marketing, the category that Jarod is best known for. Before I do that, I want to ask you a question. 00:16:08 Farmers, if you are listening to this or watching this, we do hope you watch it. We got this on YouTube. Go to XtremeAg's channel. 00:16:14 Just go on YouTube, type in XtremeAg, hit subscribe. Doesn't cost you anything. We put our stuff out on Acres TV, and obviously we're on all the audio platforms, 00:16:21 so do check this out wherever you get it. So anyway, you're a farmer. I want you to imagine knowing your soil as well as you know your fields. 00:16:27 With Earth Optics, you get the most precise soil insights in the industry. Clear, accurate data on fertility, biology and compaction. 00:16:34 Big one there, compaction. No more guessing, just the information you need to make smarter decisions, optimize your input costs and boost your 00:16:41 yields. Earth Optics puts the full picture of your soil right in your hands so you can farm confidently and profitably. 00:16:48 Unlock healthier soils, stronger harvests, and a better bottom line. If you want to learn more, go to Earth Optics. 00:16:53 Earth like the place where you live, optics like your eyeballs. Earthoptics.com to learn more. All right, 00:17:00 marketing. You're supposed to be what? 35% sold for the current year by March 31st. I think I heard one of our friends say that. Is that accurate, Mr. Jarod? 00:17:11 There's probably some truth to some of those ideas. I think that maybe we are back in an environment where we have to respect a calendar. 00:17:18 Maybe we are returning to a little bit of an old school seasonal pattern, and a lot of that is based upon a really, really solid demand base with 00:17:28 a high bar set for the farmer to grow another good crop. And that's not just domestically, that's globally. 00:17:33 Now you sprinkle in some of the concerns around fertilizer expenses. It's at least our internal opinion here that the 00:17:40 fertilizer supply is there for the US farmer. It's the replacement cost that is driving up the input purchase decisions for the farmer. 00:17:50 But this can turn into a bigger story in the event we actually created a shortage of fertilizer for Brazil. So again, we're recording this on March 00:18:02 31st. A joke before we got on this, I could put a blindfold on and throw a dart right now to understand exactly what is going to happen 00:18:10 with Iran. Here's the truth of the reality. There is facts that every time crude oil has been 100 bucks, corn's been awfully close to six, if not higher. 00:18:21 We've completely disconnected the grain markets from energy prices presently. Rightfully so, 00:18:28 because we really don't have a supply issue on the energy products. It's more of a logistic issue getting it from point A to point B. 00:18:35 Different type of oil overseas than the type of oil we have in the US.plentiful natural gas supplies in the US. 00:18:42 Why aren't we doing something along those lines to help the fertilizer picture? But you put all that to the side for a second, it's just 00:18:50 my biggest concern from a marketing component coupled with input costs 00:18:55 is we're not going to see these input costs come anywhere near as low as we would like to see them come down in the next 12 to 00:19:03 18 months. And all that's going to do is amplify the marketing picture. And to try to make this short and sweet, we still have to understand exactly what my 00:19:14 insurance is doing for me, what my farm programs are doing for me. The combination of those two still has a larger safety net to the farmer than what 00:19:21 they maybe feel like they actually have. Mm-hmm. And because that safety net is so large, in theory, it kind of opens the door to taking, 00:19:30 I don't want to say more risk, but looking for just a little bit extra. The US farmer, in general, probably needs November soybeans to be closer to 12, 12.25, and 00:19:42 December corn somewhere between five and 5.25. And in those price ranges, at an average yield and today's input costs, it's probably a cash flow positive situation. 00:19:53 That's generalities. Should we get there, the farmer has to start engaging. But go back to the calendar comment. 00:20:01 The odds are incredibly high that South America weather for the Safrinha corn crop, they'll be fine. The US farmer will get their crop planted on time, we'll be 00:20:11 fine there. And you're going to fast-forward to June 1, and you might have a benign weather forecast. 00:20:18 It's going to get tougher to do much after that. Mm. So if there's one, a team's opinion here, it's probably more about the calendar than 00:20:28 anything right now. Somewhere in that May 15th to June 1st timeframe, the farmer's probably going to want to have done what they want to have done. 00:20:35 On a national planting scale, the corn crop needs to be somewhere around 50% planted by May 10th. And if we 00:20:42 are achieving that, it opens the door to achieving trend yield or higher. Beans, obviously a crapshoot telling you what August, September weather are. 00:20:52 So just knowing that whatever pricing opportunities do or don't come, even in a stagnant market for the next 30 to 45 days, there's going to have to be some tougher decisions to be made. 00:21:04 There's a lot of different intricacies of how an individual could go about that. 00:21:09 But given the global dynamics, the strong demand that we have, a perceived reduction in acres as of today from the Prospective Plantings Report, 00:21:19 volatility index is most definitely a lot higher. Mm-hmm. So the cost of doing business for the farmer to be more aggressive is definitely 00:21:26 higher, but there's still opportunities that need to be discussed more on a one-on-one basis with the grain buyer, broker, or crop insurance agent, what have 00:21:36 you. We sucked out a lot of volatility in the marketplace today, Damian. We hardly moved the corn market, and 00:21:46 not to get bit into weeds, I take an at-the-money call and an at-the-money put that expires in three weeks. The corn market didn't change, but the value of 00:21:53 those two dropped by eight cents a bushel. That is a prime example of one hurdle is cleared. 00:22:02 Now we just got to get the crop planted, we got to have a benign weather forecast, and history probably repeats itself. 00:22:07 Back to the seasonal comment. So calendar is arguably more important than anything presently. 00:22:15 All right. You've said that a number of times, Adam, as a farmer, put your farmer hat on, your businessman hat on, put them both together, whichever hats you want to 00:22:21 put on, and answer this. What are you doing? Are you changing anything about how you go about marketing? No. 00:22:28 Based on the volatility, based on the fact that they're talking about switching acres. 00:22:32 By the way, again, we can talk about how this is really timely or maybe we're behind again a little bit. This is an every year thing, right? 00:22:40 It's every year about this time you guys start going through this- It is. It's just the analysis changes, obviously, Damian. 00:22:47 So I guess if I was going to back it off a little bit, Creed does this all day, every day. So general farmer, what 00:22:55 percentage sold are you? What percentage sold had you planned to be? We talked about right here on this program having a marketing plan. 00:23:04 If you didn't do a marketing plan, now is the time. So corn, we're about a million acres over the average estimate. Maybe you want to 00:23:16 catch some sales up, right? Beans, they knock some acres out of that report. You want to reward a rally. We had November beans up 00:23:28 16 or 18 cents here for a while today. I didn't watch it all day, but reward those rallies. But I think you want to have offers in 00:23:36 place. Creed gave out some numbers there. What's wrong with having, you pick the number, but have that order in place so the day that 00:23:46 you planted all day and fixed the planter and ran around and put out fires and didn't realize that the grain market rallied and 00:23:54 then backed way off, you missed your sale. Have those offers in place. Management, our fourth M. 00:24:05 All right, Jared, you talk to your clients all the time. Are you advising any management changes based on, and I 00:24:12 get it, we know it's March 31st right now, recording this, might be different. Have you had people come to you in the last 30 days, 00:24:20 the war in Iran's been going on for 33 days while we're recording this, so there's that. There's diesel changes, which is way up. 00:24:28 We've got some potential fertility that's coming in, and they're saying, "Man, I always turn to you for my business decisions." What are you advising them on? 00:24:34 Are they making any management decision changes? Big management sweeping changes? I think the management changes that are happening maybe 00:24:46 wouldn't get looked at as a true management change, just realizing that we went for 12, 18 months without a lot of 00:24:53 opportunities and managing those opportunities accordingly. Adam Antonelli on the head, not to take it back to marketing, lots and lots of 00:25:02 offers. Get one filled, replace it with another, stack them all up. You know where you need to sell corn to be profitable. 00:25:08 You know where you need to sell beans to be profitable. That is in theory, Damian, itself, that is a management practice change because last year, without a doubt, 00:25:19 2025, whoa. In my career, it was probably one of the toughest just because you set an abnormal high in the month of February, and you never looked back. 00:25:30 And then in the middle of the year, the talks that we've had here internally before about, 00:25:36 they're on this show before about the big, beautiful bill and all the changes that meant for the farmer. That's additional management changes 00:25:42 of understanding exactly what all those implementations mean to the farmer of managing the subsidies you have available to you, managing the structure 00:25:50 of your farm to retain as much government program eligibility as you possibly can. And that's still a wild card out there. 00:25:59 We don't know all the final definitions around all that. So 00:26:04 if anything, it's management of staying on top of all the changes that have taken place 00:26:09 because the list is not short. Okay. Adam, from a farming standpoint, okay, maybe you don't make a lot. Are you making big changes? 00:26:18 Are you changing your cropping mix? That's probably the best place to start. You're not. 00:26:22 No. You're going to do exactly what you did last year. No, we're not going to do exactly what we did last year, but we're not going to change a lot from what we had planned on in November, December. 00:26:30 So we've got some more corn, but I would say looking at it right now, if you didn't do that, this probably has played 00:26:38 into your hand a little bit. So when they did that planning intentions report, and that's based off the beginning of the month. You said it, Damian. 00:26:46 This war's been going on, and this struggle in Iran's been going on for about 30 days, 33 days. Well, here we are. That report, it's already a little old. 00:26:57 Yeah. We cannot stress the timeliness of this. Well, anhydrous prices increased during that time because of this conflict, as did fuel 00:27:07 substantially. So it could be that corn, maybe it was a corn on corn decision in the fall, that may have backed off a little bit. Plus, 00:27:17 we said that that report's typically off one to 2%. Maybe with those factors creeping in, we don't have quite as much corn as what we thought we were going to. 00:27:27 It changes daily. But no, we didn't make any big changes from what we thought we were going to do in the fall. And I'm glad we didn't. Anhydrous increased. 00:27:37 We didn't have all of that bought, but we had most of it bought. 00:27:41 Would you advise somebody, like you said, there might be someone that isn't sticking with their November plan. 00:27:46 Would you advise somebody to make a change right now? They're listening to this on April 1st. They're in Iowa, just like you, or Indiana, where I'm from, or Nebraska. 00:27:53 I don't know where the hell they are, but unless they're in the deep down where Matt Miles farms, they probably got lots of horizon in front of them in terms of they haven't even gotten a tractor out 00:28:02 of the shed yet. Do you advise them making a big change? I don't advise a big change today. I don't see enough that's changed 00:28:09 on this end that hasn't been just purely short-term, and beans don't bother me as much as they used to. 00:28:16 So- Jared, you got clients that do more than just corn and beans. What are you advising them? Should they make a change? 00:28:25 The short answer is no, and what I was going to bring up, if you just simply take the soybean price divided by the corn price, that ratio is floating right around 00:28:32 2.4 right now, and that's no man's land. That suggests rotation is king at that point. In years where that ratio is- 00:28:40 Isn't that like the historic average is 2.36 or two- Yeah. In years where you see that ratio above two four, you gain bean acres relative to corn. 00:28:50 In years where you see that ratio below two four, you see corn gain acres relative to beans. And we are just in no man's land, 00:28:59 and quite frankly, I think there's probably already at least 10, 15 million acres down in the delta between corn and 00:29:09 soybeans that that decision is long gone. A lot of planting has already taken place there. Some of our client base is done planting already. 00:29:17 They got a couple week jump start. The conversation's already picking up in the state of Iowa of how soon can I plant beans? 00:29:23 When's my early plant date? What's that mean to my insurance and such? I do think that there's a significant amount of planting decisions 00:29:31 to what Adam mentioned, that it's already been made. However, if you wanted to get very granular, 00:29:38 let's just make an assumption that 25% or 20% of US corn acres did not have their nitrogen prices locked in. So take a 25 million acre pot, more or less. 00:29:51 What percentage of that 25 million acres will legitimately make a change? 00:29:56 It is probably less than 10%. So you're talking a pot of a million and a half to three million acres. 00:30:03 Well, that sounds like decimal point dust, but at least this year, our demand base makes that not decimal point dust. The difference between having 96 million acres of corn 00:30:15 versus 94 is probably worth a pretty penny. And the prospective plantings, again, is not worth the paper that it's written on. The world has changed already. 00:30:29 Dare I, I should have got a tinfoil hat put on for this comment that's getting ready to come, but the bar is set really, really 00:30:40 high for the US farmer to grow what they're going to again. Believe it or not, you know what your fifth largest corn acre stateIts potential perspective to be 00:30:52 Kansas, followed up by that, South Dakota. Mm-hmm. Last year, we proved that both of those could raise really, really good crops. Mm-hmm. 00:31:00 History says they're volatile. Mm-hmm. Up and down, up and down. You all of a sudden have 12%, 14% of US corn acres between those two states. 00:31:11 Yeah. I'm a Kansas native. I already text some buddies from Kansas in the industry that, well, I guess we can officially call Kansas 00:31:19 part of the Corn Belt- Yeah ... because we're planting the fifth most acres out of anybody in the nation anywhere. 00:31:24 And so your point there is, there's this great expectation of us to have massive yields because we were trending. What'd we do? 00:31:31 Like 184 bushel corn, just using corn as the example. And you're talking about those coming from states that are prone to mid-June hail, right? That's what you're kind of talking about. 00:31:42 We get- Flat out- Significant more weather ... it rains 30 days, 30 nights in the state of Iowa. In my hometown, we got a quarter inch during that 30-day, 30-night stretch. 00:31:52 That's the type of events that can happen in the far western Corn Belt. Yeah. 00:31:56 So it goes back to a lot of the different buckets you talked about. The stakes are so high for the farmer, both financially and what the 00:32:04 market has basically put in front of them to accomplish. Hence, the seasonal window may be around. 00:32:12 Hence, understanding the management around all these different pieces that come to the table. 00:32:19 But I don't know if that's enough to actually materially change what our acres look like here moving forward, to materially change what the 00:32:29 employment practices of the farm need to look like. But it can certainly be enough that they need to be on top of it from a financial perspective of- 00:32:38 Speaking of financial thing- ... the bullish market ... I put in my notes to each of you guys. Since you help clients go from their marketing, 00:32:46 to their insurance, to their management of government programs, is there anything that needs to happen on the government program front moving into this season? 00:32:53 If you're changing or if you're not changing crop mix, does it matter? I tell you what. I am guilty as charged. 00:32:59 I farm a little bit myself, and I find myself always asking questions of the farmer, do X, Y, Z at the FSA office. 00:33:05 And I want to apologize to all those farmers because I stepped in there for three hours the other day on a whopping 300 acres. 00:33:11 I'm like, "What is going on? Why does this all have to be so complicated?" Why does it have to be so difficult? 00:33:18 So I think the takeaway from that is the majority of farmers probably don't like talking to the FSA very much, Nathan. 00:33:26 Mm. But I think it's probably worthwhile a call once every couple months of just saying, "Am I up to date on everything?" 00:33:33 Mm-hmm. What's the status of my farm in the eyes of the FSA today? Because you cannot ignore it. The amount of 00:33:43 money coming to the farmer in the calendar year 2026, it has nothing to do with 2025 physical 00:33:52 grain. It's enormous, and you have to be on top of it. You have to be on top of it. So I guess there's my comment about the government program piece because- 00:34:03 Your point is- I'm going to- Your point is- I feel like I'm pretty good- ... go to the FSA office. Go to the FSA office and make sure you're all current and 00:34:08 you're maximizing your program. I feel like I'm pretty good on staying on top of all these acronyms that we've been- 00:34:14 Yep ... exposed to for the last five years. But admittedly, I'm starting to lose track of them. All right. Last question. 00:34:20 There's a dozen of them. All right. You got anything on that one, Adam? Or we moving? We're moving. 00:34:25 All right. Last one, money. The reason XtremeAg members and non-member farmers tune in to listen to what we say is they want to become better 00:34:33 at their farming, and we are here to help them with that. So we're talking about the business side of it. 00:34:37 We're talking about management, manpower, marketing, your machinery decisions. Now let's talk about money. 00:34:45 You just said that the bar is set pretty high, Jared. We're going to have to really ring the bell and that's what's expected of us. But you could throw some weather volatility in there, particularly as you said, 00:34:53 Western Corn Belt, far Western Corn Belt. I had to pull over once, and I thought I was going to die when I was doing a gig in Western Kansas in late June. Hail came down 00:35:04 and I thought, "My God." Maybe it was Nebraska. Either way, the hail came down so much, and I looked around, and I realized I was about 30 miles from any kind of civilization. 00:35:12 So anyway, I'm not used to being that remote out there. So anyway, what do we think about money? Am I going to make any money? Am I going to make any money? 00:35:21 What do I need to be doing with my money? What decisions should I be making? Should I change my cropping mix? That was the big one. 00:35:26 Corn acres are going down because it's more expensive to plant it. Adam, answer me from a farmer standpoint. 00:35:30 What do I need to know about money and management in this year? I think we can simplify this a little bit. 00:35:37 Jared mentioned it earlier. These inputs probably aren't coming down much very fast. They're probably pretty sticky here. 00:35:45 So that leaves the income side, right? Now, he just mentioned all the things you need to be on top of at the FSA office. Making sure that you're in the program. 00:35:56 Make sure you got the crop insurance. Those are all good. But 00:36:00 to make it really easy, what I would say is stack those offers up. Have a marketing plan. You have got to reward these rallies. 00:36:10 Farmers tend to think when we're at $4.80 corn, we're going to 5.50. Yeah. 00:36:16 Then we're going to 6, then we're going to 7, then we're going to 10. And one of those won't hit. 00:36:22 Jared mentioned earlier, they just sucked all the volatility out of the options. Mm-hmm. 00:36:27 Stack your offers, have them ready to go. You can change them. It doesn't cost anything to change them if you've just put an order in. 00:36:34 Mm-hmm. You're the money guy for a bunch of farming operations in multiple states, Jared. What are you telling them about money? 00:36:41 I think this is a repeat of 2014 and '19 environment. Not exactly the same timeframe, but the environment thatThere's an understanding when the 00:36:53 farmer sits down across the table from the banker and the banker shows them that, "Well, your working capital on backwards XYZ." Well, no explicitive explicitive, 00:37:06 right? What do you expect in the present environment that we're currently in? It's going to happen. However, 00:37:14 what's the farmer and Adam, what are you going to retire on in 20 years? At the end of the day, you're going to care about what your balance sheet shows, 00:37:20 what your net worth is. Right. Keeping powder dry, trying to look for 00:37:30 opportunities to make sure that that does take place. But on top of that, not everybody has aspirations to grow, grow, grow. Not suggesting that. But there's going to be- 00:37:40 You mean expansion of the business, expansion of the farm. You don't have to- 00:37:45 There's going to be, and there still is opportunities to grow that if managed correctly, 00:37:53 speeds up that build of wealth. You talk about money, that's the entire goal in farming is build wealth. 00:38:00 Mm-hmm. And it's not going to be a straight line up, that's for darn sure. So in a roundabout way, it's almost okay. 00:38:08 We look at that prior tough five-year stretch, lots of opportunities presented themselves. Margins are razor thin or negative. But when that next big boom came around, the expansion of the farm 00:38:20 or paying down debt, what have you, it really created a financial boom. Yep. 00:38:26 Next big grain price move that comes around again, coupled with maybe a little bit cheaper input prices than we presently are in, it's going to 00:38:34 repeat itself. We're cyclical. We know that. So not losing sight of maybe a two, three, four year stretch that doesn't look so 00:38:45 rosy in the farming complex can quickly be made up for in a couple years. So it's 00:38:51 winning every 10 year stretch. It's NCAA tournament time. What do you want to do? You want to win every four minutes between TV timeouts. 00:38:57 How is that any different than a farmer? You want to win every four year stretch collectively. So your advice is, you referenced two years, 2014, 00:39:08 2019, and you also referenced keep some powder dry. And there's somebody out here who's going to say, "I appreciate that, Adam and Jared, I really appreciate what you're helping me here, but I don't have any powder 00:39:16 to keep dry because things are really tight." You've actually got this prediction that there's going to be an improvement this year. 00:39:22 You said that previously. There're going to be some old crop stuff to sell into a little bit better pricing situation. There's going to be some government programs. 00:39:29 You think that here we are on March 31st, we might have a... You said in the text when we were setting this up- 00:39:36 I think- "Things are going to look a lot different in two weeks." I said, "Well, that's always the case." 00:39:39 That doesn't necessarily mean all positive, Damian. Yeah. Let's just put it this way. You're three 00:39:44 full months into the calendar year 2026. January, February showed a lot of light at the end of the tunnel. Yeah. 00:39:51 March maybe took a little bit of it away for the individuals who had a lot of input price exposure. But everybody, almost 00:39:58 everybody, has input price exposure for the 2027 crop year, and we're three, four months away from making those cropping decisions for '27. 00:40:09 So if I wanted to throw one other piece when you talk about the marketing aspect, don't lose sight of 2027. If you start getting a sniff 00:40:17 on some input prices that you can actually manage- Yep ... and the grain price happens to provide some type of a positive margin return to that, bushels per acre to cover 00:40:28 XYZ expenses. If that ratio can be favorable, you just got to do something about it. It's not the price of either one of them, it's about the net return between the 00:40:36 two. And that's an opportunity that we haven't had for an extended period of time now since the Ukraine-Russia conflict. Mm-hmm. 00:40:44 Haven't had an opportunity to market something 18, 24 months in advance. And knock on wood, those opportunities are 00:40:53 presenting themselves in the next 30 to 45 days. Are you looking out there at 2027, Adam? Oh, yeah. Absolutely. 00:41:01 We talked a lot about equipment earlier. Maybe that's where you look at the equipment. Maybe it's not right here. Keeping that powder dry is not done buying equipment. 00:41:10 We wouldn't have any equipment if I didn't have to have it. Despite that little picture in the background. 00:41:16 It is not- We're going to probably lose our sponsorship from the machinery companies because every time Adam comes on here, he says, "I hate machinery. I wouldn't own it. 00:41:23 I don't understand it." I mean- But I own it. But I still own it. And it's not that- You're not the guy that walks around at the farm machinery show- 00:41:31 Oh ... with the- Nope ... arousal over looking at tractors. Well, so I'll mention the equipment then. 00:41:40 John Deere's got a pretty cool new tractor, right? I kept going over there. Right. 00:41:45 All right. So I just think we don't see a lot of people build a ton of wealth with buying new pickups and buying new tractors all the 00:41:53 time. You got to have them. Yeah. But you don't have to have them all the time. Keep that powder dry. If you don't have the powder, then try to start building some. 00:42:01 That might be by not buying the equipment today. There'll be a day. I think we're going to leave it there. 00:42:07 So we're talking about marketing, management, manpower, machinery, money, and about deciding your planning intentions. 00:42:11 Maybe you're not going to change them, but this is a valuable decision no matter what, and it's a valuable decision moving forward. 00:42:16 So we know you're going to hear this after you've already made up your mind on what you're planting this year, but these are all still key components to running a 00:42:21 successful farming operation. That's why we put this stuff out there. We're XtremeAg. We got a library of videos that the guys have shot in 00:42:28 the field. You can go there to xtremeag.farm and get that stuff for free. Mr. Creed. 00:42:34 Planning intentions. We might know what we're doing in '26. It's not too early to start thinking about what those intentions might need to be 00:42:41 for '27. That's probably more relevant than the here and now. 00:42:46 And that's for your individual farming operation, you mean? Yep. 00:42:50 Yep. And like you said, for the first time in a long time, you may be able to lock in stuff, inputs, and your product for a year and a 00:42:57 half from now. Yep. Yeah. Cool. Anyway, check out our stuff, xtremeag.farm. Go to our YouTube channel, hit subscribe. 00:43:03 Our cool show, "The Grain Room," which is shot at my farm in Huntington, Indiana, has like 45 episodes out. Go and check that out. It's fun. It's like a talk show. 00:43:10 It's like "The View"- ... except for it's watchable. Anyway, so thanks for being here. Share this so somebody can benefit from it. His name is Adam Allrich. 00:43:18 He's an attorney and a farmer. We don't pay him his hourly rate, thank God. We couldn't afford it to have him on this show. He's joined by Jared Creed. 00:43:25 Jared, if somebody wants to learn more about the marketing side of your business to help them, they go to... Where do they find you? 00:43:32 Phone is always easiest. 402-680-1744. We are three of perhaps the best looking guys working in agriculture, and also we're all three very good hair. 00:43:44 You won't get this if you have Kelly Garrett on this episode. Anyway, till next time, thanks for being here. 00:43:48 He's Adam, he's Jared, I'm Damian Mason. Thanks for tuning in to XtremeAg's "Cutting the Curve." That's a wrap for this episode of "Cutting the Curve." Make sure to check out 00:43:55 xtremeag.farm for more great content to help you squeeze more 00:43:59.872 --> 00:44:02.212