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arm
Also inside:
Producers need
to think like
buyers -- Page 6
Canning provides
fresh food all
year long -- Page 8
Just shy of 90,
Hickel was born
to farm -- Page 9
ioga
Supplement to Journal Publishing Inc., August 24, 2016
ribune
Steve Dhuyvetter and his cousin and farming partner, Chuck Dhuyvetter, walk a eld near Noonan.
1980 was $3.91 per bushel compared to todays price
of $3.45. Figure in inflation and parity, and the true
value per bushel of wheat is the lowest its been as
far back as the Civil War, according to an article published on Smallgrains.org this July. Depression price
values cant even compare with todays depressed
s need to
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vice: Y
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Farmer Ad
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ig
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e
s
r
o
h
be
Collin Ferguson
Branch Manager
Banker A
dvice: Yo
ur finance
high, con
s need to
fidentially
b
tight and
long run s e savings
trong.
The cash flow is negative on a lot of spreadsheets. -- Dan Beyer, Farm Credit Services
rents, machinery purchases, crop insurance, fuel,
repairs, labor, herbicides, insecticides, fungicides,
fertilizer, operating interest: the list is long, and the
cost is high, according to Andy Swenson an NDSU
Extension Service farm management specialist and
author of the Farm Management Planning Guide with
annual projected crop budgets for each crop and
region in North Dakota.
It costs $202.28 per acre on average to raise spring
wheat in northwestern North Dakota, according to
Swensons projections. The five counties Divide,
Burke, Mountrail, McKenzie and Williams average
35 bushels of spring wheat per acre at harvest. The
high cash bid locally is $4.25 per bushel for a gross
profit of $148.75. Farmers, on average, are more than
$50 in the hole for every acre of spring wheat they
farm this year. (They are $20 in the hole for durum
wheat).
While the federal government provides relief payments when crop prices drop below reference prices
($5.50 per wheat bushel) set in 2014s farm bill, those
payments only provide partial protection nowhere
near the actual revenue lost, according to Swenson.
Furthermore, payments are made approximately
one year after the crops are harvested; farmers will
receive payments this fall for their 2015 crop.
The majority of the states farmers are enrolled
in the Agricultural Risk Coverage-County [ARC-CO]
versus the Price Loss Coverage program. Nearly one
third of North Dakota counties and their resident
farmers wont receive ARC-CO payments due to good
yields despite low prices. The remaining counties
will see farmers receiving payments starting at an
estimated $18 per acre this fall.
The Bumpy Ride
If you started farming in 2014, you didnt make
a lot of money, and you may have lost money, says
North West
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Our Main Street businesses can tell the farm economy is down. -- Doug Goehring, N.D. Agriculture Commissioner
and historic perspective on the state of agriculture.
He helped out on his parents farm during the 1930s.
And for him, the 1950s remain his worst decade farming. I put in a lot of hours on and off the farm and
made just enough to get by, he says.
Hickel and his wife, Dolly, held other jobs year in
and year out. Between the two of them, they sold milk
from dairy cows, trucked and hauled coal, changed
oil and washed cars at the service station, ran a
movie theater, welded air heaters, and drove school
buses. Hickel, who made his final land payment in
2008, says the 1980s would have been a lot worse
for him if he didnt have oil leases providing secondary income. That, as well as the free labor force of
his wife and kids and repairing all their equipment
themselves, helped the Hickels survive the tough
times. While todays grain prices dont faze Hickel,
he admits nothing compares to the sticker shock he
sees today on farm inputs.
I went to Stanley to find out how much it would
cost to fix my tractor, he says and rests his hand
on his forehead to emphasize his frustration. It was
going to cost more to fix it than the damn tractor is
worth. So its going to sit there.
As Hal and Donald walk east beyond the farmstead
to examine Hals field of Divide durum wheat, Hal
explains that as a certified seed producer, his grain
marketing is not to the local elevators, but seed
brokers and local farmers. But he, too, has seen
depressing fluctuations in the amount for which he
can sell his seed.
North Dakotas Agriculture Commissioner Doug
Goehring says farmers arent the only ones depressed by the downturn. The declining agriculture
sector will have an even deeper impact on the states
economy than the lagging oil boom. Agriculture,
which maintained its number one industry position
701-664-2516
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grow it, and I do, but the odds of choice durum and
the money you have to dump into it is ridiculous.
He adds that spring wheat is grown throughout the
world, and the supply is too stable right now to see
a huge rise in price. I dont buy into the idea that
we dont have enough food to feed the world population, he says. Unfortunately, we need a disaster to
turn those prices around. Somebody has to lose for
someone to gain.
The Sundhagens try to store commodities that
have low cash bids and hold them until the market
shifts while selling those that are profitable. Being
diverse, he says, Youll catch a market.
When asked what advice he has for fellow farmers,
Steve shrugs, smiles and says, Pray a lot.
As the Dhuyvetters work on their Peterbilt truck,
Steve admits he may be a bit of a pessimist right now.
Our only hope when prices are this low is to have
the bumper crop, he says.
Chuck, who is trained as a diesel mechanic, shakes
his head and admits theyre maybe a little grumpy
as they sweat with the fan belt. They say you gotta
farm for 40 years to hit a home run. It wont happen
this year, he says.
But ask them if theyd rather be doing anything
else.
Im too old to do something else, says Chuck,
who worked nearly two decades on the oil slope of
Alaska before returning home in 2011 to farm with
Steve. I dont have to listen to all them suits. I can
be my own boss.
When Steve was young he would tell himself that
if farming got really ugly, he could walk away. To see
him tenderly grasp the kernels of durum and count
each precious one is to know he wont be walking
away any time soon.
Its always a welcome challenge to do better
than you did last year, he says. I fell in love with
it, I guess.
Michael Braun
DRILLING PRODUCTION
& GEOLOGY
664 Highway 40
Tioga, ND 58852
701-664-1492
nscoffice@nesetconsulting.com
www.nesetconsulting.com
Supporting Agriculture!
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1-701-664-2008
1-800-452-8968
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Producers need to think like buyers if they want to thrive in todays market
By Sydney Glasoe Caraballo
Producers need to think like buyers, says Dr.
Frayne Olson, an NDSU Extension Service crops
economist and marketing specialist. If you can make
that mental shift, you understand how the system
works.
For farmers who raise crops selling in the futures
market, it is a huge advantage to think this way. Olson
says with wheat in particular, there are years when a
producer could add 80 cents a bushel to the bottom
line just by watching the basis and that relationship.
The basis is the price differential between the local cash price and the corresponding future price.
Understanding the difference between these two
closely related markets is critical. The local cash
price reflects local supply and demand, but what
happens locally can be very different from what
happens nationally and internationally.
I lay awake at night worrying about it, Olson
says. That basis is much more variable here than
in the Corn Belt and Kansas. Our spread has bigger
swings and swings more quickly here than other
areas.
The speed and strength of those swings are because North Dakota cash markets are more dependent upon exports. While domestic mills buy wheat
from Williams and Divide Counties, international
markets heavily influence our grain prices.
If you live in China, the cheapest soybeans and
fastest delivery is from North Dakota, Olson says.
That grain can reach a port via rail in three days
and ship out from Seattle or Portland and arrive at a
major port in China in 12 days. In the world of grain,
that is rocket speed, Olson says.
He compares that transport efficiency to soybean
deliveries out of Brazil that are two months behind
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Hickel
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Fertilizer Plant: 701-568-3344
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Auction
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The view from atop a grain bin near Wildrose as the small grains harvest gets underway earlier this month.
farmers can deliver a quality product.
Several large producers in the global market are
experiencing quality problems, which could boost
local prices on premium graded spring wheat and
durum wheat, according to Olson.
Customers want elbow macaroni, but they also
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10
Looking back, Hickel can see farming was the
most likely and natural occupation. He was born in
1926 to farmers who lived halfway between Ray and
Wheelock. He was riding a horse by three years old,
and while he did chores on the farm, he dreamed
of being a cowboy, not a farmer. He didnt just ride
horses. When he was six, his uncle gave him a bottle calf. Hickel rode the calf out to the pasture to
bring the cows home each evening.
One memory still rankles. His pet calf was taken
away from him in 1933.
The government took all the animals, he says.
Hickel recalls federal government officials confiscating most livestock in the area that fall because
they said there was no crop, hay or winter pastures
on which the animals could survive.
Hickel says before that year, his family put up
Russian thistle for hay and mixed molasses with it if
good hay wasnt available. The gentlest horses (because they could be caught again) would be turned
out on the free range to forage for themselves until
the next spring.
Hickels tone sharpens with annoyance as he
considers the loss of the calf and horses.
You want to talk about government help and
control? he says.
In exchange, the government provided commodities such as blankets and oatmeal.
Before their livestock was taken away, Hickel
says the time of the horse was already passing. He
remembers loading leftover seed grain (about three
bushels) with his brother into a single horse buggy.
They hauled it to the elevator. They sold it for 30
cents a bushel and used the proceeds to buy groceries. They were half a mile from home when they
took a turn. The buggy hooked on a fence corner
post on the prairie trail. The impact tore the shaft
off the buggy. A neighbor with a car rescued the
boys and their groceries.
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11
Donald still has the rst combine the family owned -- an Oliver.
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Donald Hickel, center, with his sons, Joe and Hal, on the farm, in 2002 -- six years before he paid o the farmland he
bought from his parents in 1978.
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