The 2024 National Association of Farm Broadcasters Convention was a hub for collaboration and conversation about the future of agriculture. Farm Broadcaster Corryn La Rue sat down with Cody Bills, director of market advisory and brokerage with Farmers Business Network, to discuss 2024 market conditions.
Q: Cody, I’m assuming you were probably pretty busy this year and probably years past. 2024 can be safely described as tight for producers. What happened before 2024 and what happened to be able to kind of get where we’re at in 2024?
CB: Yeah, 2024 has been tight. We started out with a lot higher crop prices when people were penciling it out kind of going into the planting, and that margins looked a little bit better.
And I think a lot of these producers were really conditioned on the bull markets of 2021, and they were really optimistic for higher prices. And then when we started to drift and break lower, I think there was a lot of procrastination and waiting.
And so unless you had a disciplined risk management plan that kind of forced a sale, even when you may have been optimistic, a lot of producers are kind of left in a situation where they’re overexposed to this bear market. And so that can be really kind of eye opening. When you get to fall and you’re delivering grain off the combine and you’re saying, holy cow, this is a totally different scenario than I planted in.
Q: We’re talking about 2024. We’re closing out the year. Harvest is rolling in. Combines are kind of getting put up for the year. As we finish looking into 2025, I think it’s fair to say it’s uncertain, and farmers are kind of looking sideways, scratching their heads at what this is going to look like and the level of uncertainty in so many areas. Can you dive into that a little bit for me?
CB: Yeah, absolutely. I think 2025, it’s going to be a challenging year because margins are continued to be compressed here. And when you look at the corn outlook it’s looking relatively balanced in terms of supply and demand and stocks to use.
When you look at soybeans – soybeans is kind of burdensome stocks to use. And price action has really reflected that. It’s just been really heavy price action. And so the way that we’re looking at it is it’s really try and be defensive there on soybeans right now. Maybe some upside there for corn, but for soybeans, it’s just looking very, very heavy.
For wheat, we’re hoping for stability in terms of exportable ending stocks that has continued to decline globally. And so it may provide opportunities to price at decent levels as next year.
There’s so much fuzziness around the Trump administration when that happens in January because the policies have such dramatic impacts on prices. And it can have dramatic impacts on profitability in general. Whether or not will there be federal programs or not, will there be tariffs or not? What will the farm bill look like? There’s so much moving, it can be overwhelming. Just sit down. Control what you can control, and oftentimes what you can control is your costs. So look around for other opportunities, see where the best pricing is.
And fbn.com, which is free to join. So just go to fbn.com and look, they have all kinds of inputs. It’s a really unique buying experience because you can go there and look at the prices. They have price transparency and forecasts for these active ingredients to help you kind of time when you want it. There’s forecasts for availability. That’s a big risk management decision in and of itself. So with all the uncertainty out there, focus on lowering your costs, finding the right purchases, and that can go a long way.
Q: Cody, thank you so much for taking the time to chat with me today. Anything else you want to include before we conclude our interview?
CB: Yeah, the interest rate environment right now is 8% or 9% operating lines. And so it’s expensive to have grains and grain in the bin. So it’s important that if you’re storing grain, you’re storing it for the right reasons. And if it’s a part of your risk management plan and you’re expecting basis increases, that’s one thing.
If you’re storing grain because maybe you didn’t sell as much as you should have earlier on, you really need to look at the opportunity cost for that, those bushels, especially if they’re storage at the elevator.
So right now, cyber days, there’s an up to a 9% cash discount. So say you liquidated some of that grain and you use that to purchase inputs, you could get a 9% discount instead of paying that 9% interest rate when you’re storing. So just think about those sort of decisions. There’s zero percent financing for inputs over at FBN. It’s a great option. And you can experience the AI crop agronomist and chat, ask questions. It’s a totally unique experience. So I just recommend going over there and at least understanding the options.
Q: All right, Cody. Well, options are what farmers are looking for in this next year. So hopefully they find them.
