Feast or famine
John Schlageck
Saturday, June 21, 2008
While it’s true 2007 was a good year for Kansas agriculture, few farmers are flush with cash. Here on the great High Plains bumper crops with bin-busting harvests aren’t generally a yearly occurrence. In fact, in some areas of western Kansas this year is shaping up like so many before – little or no moisture for this year’s wheat crop.
Kansas farmers aren’t blessed like their corn belt neighbors in Iowa and Illinois where they merely plant the seed in deep, dark soil and wait for the rain to come and bless them with all they need.
Just the opposite is true in Kansas where our farmers are often referred to as “tweeners.” We’re always between feast and famine and Mr. Famine shows up at the farm gate a whole lot more often than Mr. Feast.
Until last year, much of western and central Kansas had been in the throes of drought for three to seven years depending on where you farmed.
Sure there were some stories where a few farmers received isolated, timely rains and harvested high-yielding crops. This was the exception.
Farmers, as a lot, are a conservative, pencil-wielding bunch. Most find it difficult to part with their hard-earned cash, even during those occasional dream harvests like 2007.
While many wouldn’t mind having new tractors, combines and machinery every few years, not many are prone to wear out new paint. They’re often caught in the clutches of catching up from those years of crop failure due to drought.
Hamilton County farmer Steve Hines farms with his two brothers and nephew near the Colorado border. Last year he raised his best wheat crop ever – 57 bushels per acre.
“That was the good, the bad and the ugly,” Hines says in his slow, easy western-Kansas drawl. “We mainly used our extra money to catch up from when we fell behind during the previous five years.”
Hines and his brothers did purchase some newer equipment including a later model combine and a new grain trailer.
Prices for crops were good last year. The Hamilton County farmer says some of the 2007 wheat was sold for $7 a bushel. The majority of the crop was probably sold for $5.25 a bushel or less.
“We didn’t cash in like so many U.S. consumers hear about,” Hines says. “Many of us forward contracted our wheat earlier in the year and we were tickled to death to receive $5 wheat. I never thought I’d see that in my life time.”
Another reason Hines and many of his fellow Kansas farmers aren’t flush with cash after 2007 was because input costs skyrocketed along with the increasing price of their commodities. Fuel, fertilizer, seed and other inputs doubled and in some cases tripled.
Still, with the good crop year in ’07 and the help of irrigation, some farmers are buying new equipment. The demand for farm machinery is up. Some producers have to wait for their purchases.
The main reason some implement dealers don’t have the inventory on their lots is due to a downsizing in the industry during the lean years when farmers didn’t produce crops because of drought, wind, hail and other natural disasters, according to Gerry Heim, Hoxie Implement. Heim’s been in the implement business since 1962 and his primary trade territory is a dozen or more counties in northwestern Kansas.
Heim says there’s some money for Mr. Farmer today with good times in agriculture. His business is brisk. The longtime machinery dealer saw what was happening last fall and placed “relatively heavy orders” for tractors, combines and short-line equipment.
Ordering ahead has risks too. Today’s manufacturing companies want cash upon delivery when they drop a tractor or combine on a dealer’s lot. But after more than 45 years in the business, Heim’s dealership is poised to provide for his customer base.
The northwestern Kansas dealer believes with the pent-up demand, he could probably sell much more equipment if he had it on his lot.
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