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Thursday, 01 May 2014 00:00

Ethanol, Asian trade influence local ag market

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Farmer Mike Cerny, waiting out the rain last week on his Darien Township farm, says although he’s influenced by markets, they don’t change dramatically year to year. Farmer Mike Cerny, waiting out the rain last week on his Darien Township farm, says although he’s influenced by markets, they don’t change dramatically year to year. Terry Mayer/Staff

STATELINE NEWS -- With a tough winter behind us and an early spring that’s been both chilly and wet, it’s no surprise that farmers are watching the calendar with a little anxiety and anticipation.

"We’ve had an extremely unusual winter, and spring has been very slow to warm up," said Mike Cerny, owner of Frontier Farms in Darien. "I would prefer to have all the corn planted by tomorrow and the beans planted by May 15, but chances of that happening, at this point, are pretty slim. We are behind. We’ve been spoiled by some really nice springs in the past several years. I’m a bit nervous about it."

More than the weather, however, farmers are influenced by the market for their products, whether that market is on the other side of the county or the other side of the world.

 "I don’t vary too much from a rotation of corn, beans and wheat. I suppose things will change dramatically from spring to fall, but its pretty hard to outguess the market," said Cerny. "If I was going to swing one way, I would probably plant more beans this year; they are a bit higher priced than corn."

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Cerny also does some custom farming in addition to working his own land, which brings the total of the land he works to about 2,500 acres. There is some advantage to keeping a close eye on the market to help decide what to plant, but Cerny finds that the mix he currently uses serves him well.

Products to market

When it comes to playing the market, traditionally many local farmers defer to the expertise of businesses like The DeLong Company. The DeLong Company in Clinton, with around 100 years of history in the area, is not only a grain elevator and major supplier of food grains domestically and internationally, but it also provides seed, fertilizer, chemical inputs and services for growers in Wisconsin and Illinois. It offers delivery and storage of feed grains and seed products as well as livestock and pet feed at its mill in Clinton.

It’d be hard to imagine that a farmer working so much acreage also would have time and resources to ship his harvest to Asia, or store such a massive quantity of product until it can be brought to market at an ideal price. It’s for these reasons that Cerny works with The DeLong Company.

"I’ve been doing business with the DeLong Company for a long, long time, probably over 20 years," said Cerny. "Right now they are supplying my fertilizer and chemicals, as well."

On his own, Cerny has about 150,000 bushels worth of grain storage, which seems rather small compared to The DeLong Company’s 30 million bushel storage capacity. The benefits of such a partnership are obvious.

"We purchase the harvest crops in the fall directly from local growers," said Dave DeLong, president of The DeLong Company. "Then we market that grain from that point. For instance, from Clinton, or one of our other elevators, we’ll market it, whether it be directly to export or to feed manufacturers in Chicago, or hog producers in the South."

The DeLong Company offers local farmers the important opportunity to unload their harvest at prevailing rates; the company then stores the large quantity of grain until they can bring it to market at a more advantageous time. DeLong says that the majority of the local haul is exported to Asia and that, much like Cerny’s growing pattern, the markets don’t vary too much annually.

"They aren’t tremendously different from year to year, they are pretty well established and mature," DeLong said. "Not a great deal of new markets have developed. The most significant one in recent years has been the advent of ethanol plants. They’ve created a rather large market for corn."

DeLong notes that a surprisingly large percentage of the company’s stock goes to ethanol production. Several of these plants are local to Wisconsin, like United Wisconsin Grain Producers, Badger State Ethanol in Monroe and United Ethanol in Milton.

There has been some national concern that the use of ethanol may drive the prices of grains up for consumers, and Cerny for one understands it, but isn’t very concerned.

"I understand the concern about using food for fuel, but in my mind we’ve always had plenty of corn to go around worldwide," Cerny said. "The farmer just strikes a balance between what he’s going to make a profit on. Sure, ethanol has been good for the farmer and good for the environment, but I think it’s a mature market. I don’t think we’ll need to produce much more corn than we already do annually, and if we ever get close to needing more, we’ll just plant more."

Recent technology

In our digitized world where start-up companies inflate and deflate on news of new technologies, it’s easy to forget that advancements still regularly shake up professions as old as farming. In response to both weather changes and demand, Cerny and DeLong both cite two fairly recent developments that have changed the way they do business significantly.

"Advances in the genetics of crops like the soybeans and corn plants has been huge," said DeLong. "The genetics of the crops are being developed so the plants will do better in cold weather or to withstand dry or extreme heat conditions in the summer. They’ve improved to the point where we are able to achieve good yields even with later planting dates. Today we can compensate for a lot of conditions, it’s been a pretty substantial development in the last 10 years."

Making use of this technology may be useful this year if planting continues to be delayed. Another development has been simply incorporating the use of what some might consider by now to be a mundane technology; GPS. Through the use of GPS, farmers are able to plan out the planting and fertilizing of their fields acre by acre, even foot by foot, in order to maximize efficiency. 

"I use it in everything I do now," Cerny said. "We grid sample our soils in the fields in small 2 1/2 acre squares and we look into what each portion needs in terms of fertilizer. In the past if we had an 80-acre field, we spread the whole field the same, but now we sample and look at it on the GPS and only put down fertilizer as needed. We can also do it for yields; at the end of the season I can figure out what each individual acre yielded. Now we’ve got it so accurate we can drive the same lines we did the year before. It takes a huge amount of stress off."

Many farmers in southern Wisconsin and northern Illinois are probably tapping their foot right now, awaiting the break in the weather. But they’ve been down this road countless times and will be down it countless more, and many will tell you that it all comes down to good planning. The elements have the final say, but with the advent of new technologies and the emergence of new important markets, each year our farmers get a bit better at playing the hand that’s dealt to them.

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