From The Ground Up: Dealing with low commodity prices

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When commodity prices are low as they are now, about the only strategy a farmer can have is to do everything possible to produce a better than average crop. John Malazzo farms in Burleson County.

“You know every year when you budget a crop, and it’s during the winter time and you’re crunching your numbers, it’s kind of hard to say, well, I’m only going to make an average crop this year, or I’m going to have a poor crop. You’re always shoot for a big crop. We plant for a big crop. We fertilize for a big crop. We irrigate for a big crop, and especially in low price situations like we are now.”

Malazzo says the only way a farmer can hope to deal with low prices is to produce big yields.

“But I will say that if we were at eight dollar a bushel corn, I’d still be pushing this corn because its’s a great opportunity if you can combine the high price with the high yield which hardly ever happens. Most of the time when we have low yields, it creates high prices. If you have great yields across the country, it’ll create low prices, so what you hope you can do is have a marketing scheme and just make a big crop.”

Malazzo is hoping that this year’s corn crop’s yields will offset the low price of corn.

“We’ve got a set dollar amount of operating costs, and once we can accumulate enough bushels to cover our operating costs and our land rent and our interest costs and everything else, then every other bushel is considered not free, but, well, it’s considered profit. I think with a great crop like this, if nothing happens to it, we may be able to count on a few bushels to be above our operating costs.”