Deere Announces Layoffs

MOLINE – More than 600 workers at four U.S. John Deere factories have been “indefinitely” laid off following a slump in farm machinery sales exacerbated by low grain prices paid to farmers. The announcement will affect employees at John Deere Harvester Works in East Moline, John Deere Seeding and Cylinder in Moline, John Deere Des Moines Works in Ankeny, Iowa and John Deere Coffeyville, Coffeyville, Kansas.

Deere and Company cited the need to align its workforce to meet current demand for agricultural equipment in order to remain globally competitive when announcing the decision. The layoffs follow the hiring of “several hundred” manufacturing employees in recent years to meet strong consumer demand for farm machinery, according to a company press release.

The August 15 announcement came just two days after Deere announced that a slowdown in the farm economy contributed to lower third-quarter profits for agricultural equipment. Net income for the third quarter of 2014 was $850.7 million, compared with $996.5 million for the same period 2013.

“Deere’s third quarter performance reflected moderating conditions in the global farm sector, which have negatively affected demand for farm machinery and contributed to lower sales and profits for our agricultural equipment business,” stated Samuel B. Allen, chairman and CEO for for Deere & Co. “At the same time, our construction and and forestry and financial services divisions had a higher profit, showing the benefits of a broad-based business lineup. Overall, it was a quarter of solid performance, with income exceeded only by last year’s record for the corresponding period.”

Sky the Limit for Illinois Corn Yields?

URBANA – Timely planting combined with July moisture and cool nights have set the stage for bin-busting corn yields, according to Sara Schafer, Farm Journal Media business and crop editor. Schafer notes that Illinois corn yields are expected to reach 188 bushels per acre, second only to Washington state, where yields are expected to average an astonishing 210 bu./acre.

“The overall condition of the corn crop is good to average, while the soybean crop would be average to good,” commented Fred Below, University of Illinois (U of I) crop physiologist. “For corn, I expect to see some very high yields, and overall I expect the crop to be better than normal, maybe even much better than normal.”

While soybean yields are expected to lead the nation in Illinois with a projected yield of 54 bu./acre, the harvest won’t be as bountiful as the corn crop. “The biggest challenge to both crops this year was excess precipitation in June, leading to standing water in parts of some fields,” he said. “Stunted growth and, in extreme cases plant death, occurred as a result of this ponding, especially for soybeans.”

The corn crop could benefit from the recent run of warmer weather, according to U of I crop sciences professor Emerson Nafziger. “Corn moisture at harvest could be on the high side if cool weather continues,” he said earlier this month.

Farmland Price Trends Explored by U of I

URBANA – A newly-issued farmdocDAILY update from the University of Illinois Dept. of ACES provides an up to date analysis of farmland price trends for 2014 and beyond. Speaking at the recent U of I Agronomy day at South Farm on the U of I campus, farm economist Todd Kuethe told attendees that recent commodity price declines have led to increasing concerns that farmland prices could decline due to potential decreases in crop income. Large yields have led to corn prices dropping from over $5/bu. in 2013 to prices in the mid-$3/bu. range this year. Correspondingly, farmland values have ceased the rapid increase shown during the period of 2006-2013.

A recent paper published by Kuethe and U of I colleagues Gary Schnitkey and Bruce Sherrick concludes that current forecasted income, which reflects a decline from recent income levels, is not likely to result in large farmland price decreases. However, capitalization rate increases, which may be commensurate with increases in general interest rates, do pose a larger risk factor, the economists warn.

The full article can be accessed at www.farmdocdaily.illinois.edu/2014/08/farmland-price-outlook-2014-beyond.html.

IFB Port Tour Sets Sail

BLOOMINGTON – The Illinois Farm Bureau 2014 Port and Logistics Infrastructure Tour of southeastern port, lock and dam facilities is underway for a contingent of select Illinois farmers and agriculture officials. Scott Sigman, infrastructure lead for the Illinois Soybean Association (ISA), is among the group that will visit Miami, Savannah and other major port cities for exports.

“(ISA) participation in the Farm Bureau Port and Logistics Infrastructure Tour will enable the stakeholders across a range of agribusiness to gain a first-hand, current understanding of the opportunities that exist that arise from the competitive advantages that the U.S. has in getting crop production to market,” said Scott Sigman, transportation infrastructure lead for the ISA, in an email. “Likewise, farmers-growers and ag professionals will be able to recognize the limitations and threats that exist, that arise from the potential pinch-points, the ports, as a kind of venturi of the hourglass that could be constraints to smoothly moving our agricultural exports, particularly soybeans and soy products to customers overseas.”

Gaining a fuller understanding of the capabilities of the ocean ports and the logistics of transporting ag commodities to those ports is critical for making decisions about the movement of agricultural products, Sigman continued. “With some 60 percent of the grain exported moving by barge down the river system through some 65 river terminals, and with around 40 shuttle train loading facilities around Illinois able to access the coasts for ship-loading, it is important to keep current on the investments and developments across the wide range of logistics channels.”

Illinois Farm Fact:

Lou Lamoreux, a grain and livestock farmer from Lanark, was recently elected to serve as chairman of the Ill. Corn Marketing Board.

(Tim Alexander is a freelance reporter who writes agriculture, news and feature articles for the News Bulletin, Farm World and many other publications.)