Steve Johnsons Q&A

Steve Johnson is an Extension farm and business management field specialist with Iowa State University, well known in the community for his work with farmers on marketing and farm management.

He is an Iowa native who grew up on a diversified family farm near Pleasantville, was a 4-H member for eight years and in FFA for seven years.

Johnson went on to graduate from ISU with a B.S. in agricultural education. After a summer internship with 4-H, he taught high school agriculture then went on to earn an MS in ag education, served as an Extension farm and ranch management agent in Colorado for five years and earned a Ph.D. in education with an emphasis in resource economics.

IFT: Tell our readers a bit about the areas you deal with in talking to farmers.

JOHNSON: I specialize in topics related to crop marketing, crop insurance and the government farm program. I started my first central Iowa marketing club in 2000 and now there are three active clubs meeting (in Lynnville, Conrad and Ogden). We have had over 200 club meetings and more than 500 participants over the years.

We started our first women marketing grain sessions in 2010 and have had over 25 sessions and more than 150 participants to date. I also serve as instructor for the ISU Crop Marketing Online Course offered annually in the late fall and winter months.

IFT: What subjects are you addressing at your meetings this winter?

JOHNSON: Initially, the ARC/PLC decisions and then combining that topic with items such as the crop market outlook, strategies, tools, crop insurance and market planning.

IFT: What are the major questions you are getting from farmers this winter?

JOHNSON: Strategies for determining the ARC/PLC yield two-year election and 2019 enrollment before the March 15 deadline. Also, the ability to update the farm’s PLC yield effective for the 2020 crop using crop production evidence for the years 2013 through 2017. And the potential to purchase the Supplemental Coverage Option (SCO) crop insurance for 2020 if the farmer has elected and enrolled a crop in the PLC program.

IFT: How has this year’s economic situation impacted these decisions?

JOHNSON: With improved trade (USMCA approval and the apparent U.S.-China phase one trade deal), the crop market prices should improve in the short run. However, there is a likelihood that U.S. corn and soybean planted acres will increase by roughly 11 to 13 million acres in 2020. Most of those additional acres were prevented planting acres in 2019.

With more normal weather in 2020, expect crop market price pressure by late spring into the summer and fall months. Marketing the 2019 and 2020 crops at profitable levels will be critical over the next six months.

IFT: In your work with farmers, what separated the profitable farmers from the struggling ones?

JOHNSON: The profitable farmers have improved their business skills with good records. They know their break-even. They purchase inputs ahead with volume and cash discounts and then pre-harvest market enough bushels at profitable levels to meet their fall and winter cash-flow needs.

These strategies have resulted in fewer working capital constraints because farmers didn’t store large volumes of corn and soybeans commercially. They often delivered most of their bushels directly to processors where there was a better basis (cash prices minus futures). They also tend to have more on-farm storage capacity, and that provides improved harvest efficiency with lower costs of ownership, including drying and shrink.

They deliver those bushels where and when a better basis exists, and they don’t store their bushels for multiple years.

Sign up for our weekly CropWatch newsletter

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Gene Lucht is public affairs editor for Iowa Farmer Today, Missouri Farmer Today and Illinois Farmer Today.