Georgia, Alabama, and Florida producers: extra complexity, longer growing seasons

Shay

Foulk: And it all comes down to this. Two on, two out, bottom of the ninth. The Farmers lead by one.

Chris

Barron: Full count, here comes the play at the plate, and it's the Ag View Pitch! To another episode of the Ag View Pitch, and today you've got Chris Barron and I'm here with Dennis Jones, and we're going to start with you. And we're actually in South Georgia, and today I had the opportunity to visit with you and a lot of your clients that you work with and a couple of your associates here. So Dennis, why don't you go ahead and introduce yourself and then we'll go ahead and introduce some of your counterparts here that we're working with today.

Dennis

Jones: Chris, we sure appreciate you and Shea coming to South Georgia and doing a conference for us. I'm the SAM that works Georgia and part of Florida. And again, we had a good meeting today and we thank you for coming.

Chris

Barron: Yeah, well, so you're a SAM, so that's a Tell us what that is with Pioneer.

Dennis

Jones: Well, here in the Deep South, the SAM is the guy or gal that works primarily with farmers at the farm gate, you know, in regards to helping to recommend hybrids and varieties as well as agronomic advice and helping the person to do a better job growing corn or what have you. And we also get involved in other crops as well.

Chris

Barron: You bet, you bet. We'll get to that here in a minute. So let's, let's introduce everybody that we got here today.

Cameron

Prince: Yeah, so my name is Cameron Prince. I'm the field agronomist. I cover Southwest Georgia, Lower Alabama, and also the Florida Panhandle.

Kevin

Phillips: And, uh, I'm Kevin Phillips. Uh, I'm the Pioneer field agronomist. I work East Georgia and the peninsula of Florida.

Chris

Barron: Sounds good. Well, let's, let's, uh, kind of have a little conversation to start with. Tell us a little bit, um, any one of you guys kind of tell us a little bit about the farming down here You know, we do a podcast and it gets around the, around the US and stuff, but it's really— don't do as much down in this area. And you guys have some really interesting farming down in this area, a lot of diversity, a lot of, you know, corn and cotton and peanuts and all kinds of things going on down here. So when you guys want to give us a little background on kind of, kind of the crops, and I guess we'll pick on the agronomist in the group here.

Kevin

Phillips: Uh, yeah, Chris, uh, Georgia agriculture really consists, uh, year to year of about 1.2 to 1.4 million acres of cotton. Uh, we'll have anywhere from 500,000 to 700,000 acres of peanuts and about 400,000 acres of corn roughly. And, uh, and this year we dropped to a— past year in 2019 to a low of about 100,000 acres of soybeans. So, you know, we have specialty crops like Vidalia onions that are grown here, watermelons, a lot of vegetables in Dennis's territory in South— deep Southwest Georgia, a lot of sweet corn as well, pecans or pecans, whichever you prefer, so really becoming a really good crop for us as well. Tree tree nut crop. So we have a variety of things going on here in Southwest Georgia other than just corn and soybeans.

Chris

Barron: Well, I like learning how to pronounce pecans or pecans, I guess. That's good to know. It's kind of like yesterday I was with a grower in Alabama and I said something about going to Albany and he said, no, you got to say it Albany, right? So when we get here, I made sure I said Albany. Is that right?

Dennis

Jones: That's correct. You are correct.

Chris

Barron: Okay, that's good. Make sure I say it right.

Kevin

Phillips: Benny and Tom built the city, and when they got through, Tom said, "That's all, Benny." Okay, that's all, Benny.

Chris

Barron: That's good. We want to make sure we pronounce this stuff right. So you guys tell us a little bit more, you know, we got the agronomy perspective. Tell us a little bit more about agriculture down here, if you guys want to.

Dennis

Jones: Well, like Kevin said, we just have a wide sundry of crops. I mean, And here, you know, something can happen in the markets and somebody can decide they're going to do something totally different than what they planned 2 weeks ago. Really, there's not a whole lot of months out of the year where something's not growing here.

Chris

Barron: We noticed that because you drive in here, you know, we're sitting here in January and everything's green.

Dennis

Jones: It's 70 degrees today. It's 73 degrees. And what have you. You know, we grow everything from carrots to cotton down here. And, uh, you know, in fact, there's some people now growing some citrus here in a few counties in southwest Georgia. And that aspect is growing.

Chris

Barron: And hemp is coming— is down here too.

Dennis

Jones: Yes.

Kevin

Phillips: Yep.

Chris

Barron: Yeah. So sounds good. Well, talk to us a little bit about, you know, your season is obviously, like you said, there isn't very much timeframe where you aren't growing something down here. For the guys in the north that grow corn and soybeans, when are you guys going to be started on— when do you start rolling on corn planting in this area?

Dennis

Jones: We'll start planting corn in Georgia really the last week of February. In fact, the guys that plant sweet corn generally want to start planting sweet corn around Valentine's Day. That's usually the kickoff in that regard. Most of the corn that we plant in Southwest Georgia and North Florida is going to be usually the last week of February and really kick off once you get into March. And we'd really like to have the corn planted primarily where I work by the end of March.

Chris

Barron: What about the cotton and peanuts?

Kevin

Phillips: So cotton, most growers will start about mid-April planting cotton. And really can plant cotton from mid-April all the way to mid-June. So just depending on the maturity of the varieties they're planting. But peanuts are more focused planting window, more first 2 to 3 weeks of May. Like to target those, you know, mid-May time frames for the peanuts. But a little bit more flexibility on cotton., as far as the planting dates, as far as a wider window of planting.

Cameron

Prince: And I would add, you know, with us being so far south that, you know, we'll start planting corn mid-February into March, we can turn around and plant soybeans behind that corn crop late July, early August to get two crops in the same field in the same year too. So that's just an option we do have this far south where it's been so warm for so long.

Chris

Barron: So a lot of double crop. I also heard a lot of guys today talking about COVID crops and stuff, that's pretty common down here, that would you say?

Kevin

Phillips: I would say probably almost 65-70% of our land gets a cover crop. Maybe this year we were dry for quite a period right near the end of July and August and September, and then, then we, we really just started catching rain, so harvest was a little later this year than maybe what we're accustomed to with our cotton and peanuts. And so I think cover crops may be a little bit slow going in, but a lot of our ground does get cover crop, or at least we're not tilling in the fall and letting something, if it's just winter weeds, grow up on the land just for a cover for the ground.

Shay

Foulk: So this is Shay jumping in here a little bit late, missed the introduction. But one thing that we were talking about a little bit earlier is looking at the maturities of this corn on these double crop systems. And being so far down south with the growing season that you have, you can plant 118-day corn, no issue. But when you look at some of the double crop decisions going in, you know, we were talking about 95, 100-day corn. Can you speak a little bit to the decision-making that goes behind that and why producers might want to look at that as a viable option.

Cameron

Prince: Yes, the one thing we've seen is we can grow with the full season maturity and have success growing a double crop soybean behind it in late July. Um, those also are looking at pushing some 100, 700-day corn products to get them out a few weeks earlier, push the population and maintain the same yield level, but also getting those 3 weeks of planting for the soybean crop to push the yields higher on the soybean crop subsequent to that corn crop.

Chris

Barron: Let's talk about weather for a minute. You guys get some kind of crazy hurricane-type weather and stuff down here that, you know, we don't— we have tornadoes and kind of goofy stuff in the Midwest, but We don't really get the hurricane, at least the direct impact, you guys do. Talk a little bit about what the impact of a hurricane really does to the crops, and then we'll get into the economic piece of this as well.

Dennis

Jones: Well, a year ago, October 10th, when Hurricane Michael hit the Deep South, it was the catastrophic event of my lifetime. In Seminole County, Georgia, you had a Class 3, a Category 3 hurricane, and you're 90 miles from the Gulf there or so. You know, it was horrendous. I mean, you had people picking hours before the hurricane, you know, 1,200-pound cotton, and after that storm hit, it was nothing. I mean, it was picked. It was gone.

Chris

Barron: The storm picked it.

Dennis

Jones: It was gone. I mean, like, I mean, it was, it was, and like the timber crop, you know, 30-year-old pine trees snapped off like matchsticks. I mean, it was, I mean, I'm 55 years old and it was the event of my lifetime.

Chris

Barron: Wow.

Dennis

Jones: As far as weather.

Chris

Barron: Right. That's the weather component. There's a huge economic piece to this too.

Dennis

Jones: Well, I mean, you know, like I say, you, you, you, we lost a big portion of our economic engine in a few hours. You know, in timber especially, the pecan grower, you know, you can't recover from that in a year for sure because, you know, those trees take years and years to manufacture a tree that's viable to grow pecans and what have you. And then the hardware part of it, you know, most of our cropping here is done by center pivot irrigation. You know, you had guys that lost half of their irrigations in a matter of minutes. And it took years to put those pivots up. So it was a huge deal, as they say.

Chris

Barron: What does the insurance, you know, component, does that even come close to covering the crop loss? I mean, obviously you can't make up for the the livelihood and, you know, all the other impacts that that has, but from a cropping perspective, is there insurance that takes care of that? You know, you're talking about, you know, a pretty massive cotton harvest with pretty high-end yields, and then 2 hours later it's gone.

Dennis

Jones: Well, again, I might be speaking out of school, but in a lot of cases, you know, on irrigated farmland, a lot of guys don't do crop insurance. As much as they do on dry land. And Kevin, you may can speak better than that than I can, but in some cases they were not insured.

Kevin

Phillips: That's right. That's right. You know, the cotton crop is— our corn crop is not often affected with a hurricane. So most of ours is harvested in, you know, from late July and August. Really, the hurricane season really affects our cotton and peanut crops more often than it does our corn crop. And really, you know, like Dennis said, the insurance component for, you know, their center pivot irrigation is really their insurance component for yield. So coverage levels probably weren't that good, but I just really think that, you know, it's just hard for an insurance to compensate you. A lot of those growers would have had, you know, if they were, you know, maybe halfway done, they were harvesting really probably some of the best cotton they really had ever had in their life last year, and then the, you know, the post- storm harvest was over, you know.

So a lot of those had kind of hit right near or at those harvest levels that just really, you know, they didn't collect enough insurance from where they were, and they were really had harvested half of the almost the perfect crop.

Dennis

Jones: And really, to add insult to injury, after the hurricane, it didn't quit raining. And see, some people had later cotton that had not opened up yet, that it, you know, the cotton, it kept raining, and so that crop got damaged and taken way back because of the excess raining we had for 30, 45 days.

Kevin

Phillips: Another Effect from the storm is for pecans is the crop is insurable, so we lost the nuts for this year. They were all damaged from the wet and the storm, but the trees that blew over, those were not insurable. So, so, you know, this tree that's been growing for 50 to 80 years, you know, if it blows over, it's just a loss, and there's really not any you know, program that would help cover any of the losses of that pecan grove from losing the trees. You may recoup some of your losses from insurance from the crop, but not the tree loss. And it's very expensive to clean those up. You have big equipment. One guy told me he bought a brand new excavator to clean up his pecan orchard.

Cameron

Prince: So It's going to take you 7 to 10 years to establish a new grove to have it start producing. That's going to be about a $1,000, you know, cost every year to get it to produce. So if you've got $10,000 in cost before you start getting the first dollar back, so it's pretty hard hit there.

Chris

Barron: Well, and also, let's— kind of talk through the acre rotation going into 2020. So, you know, give me again the refresher on how many acres of each crop, and then what do you think that's going to look like going into 2020 as far as, you know, the Georgia area and stuff, and kind of what you guys think you'll be seeing for crops planted this year.

Kevin

Phillips: So, so our general acre mix is about about 1.2 million acres of cotton, half a million acres of peanuts, and 400,000 acres of corn. You know, we're coming off of a pretty low commodity price cotton crop here, fairly low yield, fairly expensive cotton crop to grow this year with irrigation cost being a little higher with the dry weather late. So, most farmers are maybe a little dissatisfied with their cotton crop and economics of cotton at the moment. A lot of farmers are looking to maybe rotate to corn. Peanut acreages have probably been a little above normal, although I think the peanut crop will be fairly average range for us in that half a million acre range, possibly up a little bit. But, you know, if they're not going to make a good cash crop of cotton, they're probably looking to rotate to help take care of that peanut rotation.

And corn is a little higher residue crop to put a little better rotation for a peanut crop. So most folks are looking to rotate. Rotate a little more to corn in our area for 2020.

Cameron

Prince: Yeah, I think part of that's because when it comes to peanuts, the disease pressure we see down here this far south is you can't really have a peanut monoculture. It's got to be rotated with the crop, and if they can't plant cotton because of low commodity price, they're going to plant something else. So it's usually going to be corn from a cash crop standpoint.

Chris

Barron: And one of the things that we've been seeing as we run through Profit Manager and kind of run the numbers. And like yesterday, for example, looking at cotton versus corn with where the cotton price is at, it just didn't look like the economics worked. I mean, it really advocated just looking at that cost of production difference and that margin opportunity was definitely with corn acres. And with that said, you know, in this area right here, correct me if I'm wrong, but the The basis is currently right now as we speak is about 85 over, and it's not uncommon to be a dollar over on corn price, right? So if you're sitting there looking at a $4, you know, futures price, that's, you know, you could maybe lock in a basis and approach $5 a bushel on corn, right? Is that feasible?

Kevin

Phillips: Yes, it is. Yes, especially to the end users. Maybe our elevator basis aren't quite as good for most farmers, but the end users would definitely be higher basis in lines of what you're talking about there.

Chris

Barron: Yeah, so that's one of the things I think that's unique for the growers to the north where, you know, we're, you know, especially further north, you get up in the Dakotas, it can be a dollar the other way, you know, it just just from, from one end of the country to the other. So it's just having a little perspective there and understanding why the acre shift and that kind of thing's important.

Shay

Foulk: Well, in looking at the economics on that, and if you could maybe dive a little bit more into some of the background, you know, what is it that it's, that's affecting peanuts and, and cotton right now? Those are crops that we don't look at, you know, for a majority of the listeners here on the northern side of the United States. What's affecting those markets and what's affecting the decision-making moving into 2020 here?

Kevin

Phillips: Well, our, our really our global cotton supplies is, or American cotton supply is really high right now, so a lot of the weakness in the cotton market is maybe a supply and demand issue, and especially quicker exports, China and those things. But, um, so the peanut market is really not a traded commodity like a lot of those, so it maybe operates a little bit more independently. And, and so the peanut shellers, that, that really set the to-farmer price for the most part. They really just have to compete for acres with, with cotton for the most part. So, um, so, so some of the softness in the peanut market is probably just created by lack of competition from, from the cotton market as well.

Chris

Barron: Okay, another question. Let's, uh, transition over to the economic piece because I always like to kind of hit that and You know, what we've seen for a lot of growers is some real difficult times trying to cash flow and to be profitable since about 2013 with just overall lower commodity prices. And so it's been tough. It's been hard not to burn through working capital. And, you know, so talk to us a little bit, any of you, a little bit about what you guys are seeing, you know, for the farm operations in terms of profitability I mean, are these guys able to kind of maintain and do all right, or is there some tough roads ahead here, or kind of what are you anticipating from the financial side of things? Do you have any comments on that?

Dennis

Jones: Well, again, along with the economic situation with the markets, that compounded with the weather event that we had with the hurricane, since '13, I mean, You know, things have just digressed. But again, you still have to plan for the most success that you can have. And like the old saying goes, you can't save yourself into fortune. You know, you still got to do certain things the right way. And I think at this point in the game that What I've seen that has helped people is getting ready to plant, getting prepared, doing the best you can to get your tools ready and what have you, and looking at every expenditure because there's certain things you can cut out to help the process and help the bottom line. But again, there's certain things you can't cut out.

Chris

Barron: Yeah. Well, and that's one of the things we looked at today, right, at the meeting. We talked a lot about machinery and equipment utilization and efficiency, a little bit about collaboration. And there's just a lot of things that I think a lot of producers can do regardless if you live in South Georgia or, you know, North Texas, or if you're in the middle of North Dakota, there's a lot of things that as producers that we can do to improve profitability. And, and, uh, and like you said, Dennis, plan for success. Because if you don't plan for success, it's pretty hard to get there if you don't have that plan to start with, right?

Dennis

Jones: Well, I think farmers in general are eternal optimists. You know, come the first of the year, people start gearing up to do it. And come springtime, they're ready to burn diesel.

Chris

Barron: That's right. That's right. Any final comments or anything, you know, Shea or any of you guys that we haven't brought up? I mean, it's just kind of a casual conversation here at the table. At the end of the day, having a little beverage here and a little conversation about kind of what we're all seeing in ag. Any other comments?

Cameron

Prince: Well, I think the collaboration people talked about today is going to be important for us down here, you know, especially for guys that are more set up for cotton or peanuts that want to take advantage of maybe a higher corn price. You know, that cotton picker does one thing, it picks cotton. You know, you can't do anything with corn or soybeans. Same thing with peanuts, you know, they do one job. So it's kind of hard to make an about-face shift on a commodity on a farm when you're set up to do, you know, one crop or two crops. So, collaboration will be key for some guys to maybe make some shifts there to capture some money on the different commodity prices we see today.

Shay

Foulk: Yeah, and I'm really, really glad you brought that up. It is very important looking at the equipment efficiency. Efficiency. And with the collaborative model or alliance or however you can work it out in the region, you know, taking a look at your operation and seeing, hey, where can we improve efficiency? How can we improve our bottom line? And with equipment being, you know, the second largest line item expense on your balance sheet— and this isn't because we're having a seed or a chemical conversation or anything like that— you can change a lot on your seed and chemical some of these other decisions throughout the year and it doesn't affect your bottom line nearly as much as making a 5 or 10% change within your machinery and equipment. You know, so where can you improve on your land? Where can you improve on your machinery and equipment?

And then like you said, Dennis, continue to plan for success. You can't save your way to a fortune. So, you know, we saw that a lot in 2019 with producers producers of looking at decisions on, you know, do we cut the fungicide, do we cut the late-season nitrogen? And in a lot of cases, that was not the right decision to do because you need to provide for that crop and you need to plan for success. You know, so I'm just really glad you brought that point up, and something to consider as we move forward into 2020, especially after a rough season in 2019 on the economic side.

Chris

Barron: Thanks, Jay. Any other final comments here?

Dennis

Jones: Kevin?

Kevin

Phillips: Yeah, I just echo, as far as the meeting today, Cameron's comments. You know, when you guys are collaborating over 8,000 and 10,000 acres, and we just have so many farmers that are 1,000 or 2,000 acres split between 3 crops, and we have, you know, 2 or 3 different harvest machines. Just, it got me excited about the opportunity to encourage folks to collaborate with Quibben, especially in the grain markets here. We do have a good basis, but it's oftentimes hard for our farmers to capture that basis just because we don't have the storage to maybe capture that or have to take it to to the elevator and, you know, have drying costs and all that. So, really the idea of collaborating across those to really give us more flexibility from a crop rotation standpoint is a really good point I took home from the meeting today.

Chris

Barron: That's great. And I think the thing that's interesting for the people in the north to understand is how much diversification y'all have down here. Down here, it's huge. I mean, it's like you said, the 3 primary crops, you know, between the peanuts and the corn and the cotton, but there's some soybeans and there's all the vegetables and watermelon and sweet corn and the list goes on and on and on. Well, all of a sudden you need a lot of different equipment, right? And the collaboration opportunities that we see in your region is definitely huge. So any other final comments, Dennis?

Dennis

Jones: Chris, say I really appreciate y'all coming down. To Georgia. I think it's been exciting today. I saw a lot of excitement in the room today. I mean, it is a topic that a lot of folks don't want to discuss, the business end of it. But again, like a farmer told me years ago, he was talking to his son-in-law, if you don't worry about the business end of it, you won't be farming a long time. And that has stuck with me for a long time. A farmer in Indiana told me that. And I appreciate y'all coming.. And we appreciate farming and look forward to the best we can do in 2020 in helping our farmers and being with them from the bag to the bin.

Chris

Barron: That works.

Shay

Foulk: Absolutely. And I guess I'll just kind of wrap it up here by saying that Southern hospitality is not a myth. You know, thank you. Thank you very much for everything that you've done for us. We're blessed to know folks like you and work with people like you. And if you're listening, you haven't been down to this area, there's a lot of, a lot of good people down here in agriculture that you can come and get out of your backyarditis and come see what they have going on down here south and see how farming looks down here. But thank you for joining us, everyone. Appreciate it, guys. And we will catch you all next time on the Ag View Pitch. Thanks for joining us on today's episode of the Ag View Pitch. As always, you can reach out to us at cbarron@agviewsolutions.com or duanel@netins.net. We'll catch you next time on the Egg View Pitch.