MONROE — Looking ahead to the growing season of 2024, farmers across the region are preparing for a break-even year.

If there is one word to describe the outlook for 2024, it is volatility. Not one single factor is pointing toward an optimistic or pessimistic outlook, but rather a perfect storm of uncertainty as producers prepare for the coming season. The single defining element that will separate success from failure in 2024 will be for farmers to know with intimacy their individual cost of production.

An unseasonably warm and dry February has created genuine concern for a drought year. Historical weather patterns have determined that a warm January, February, and March typically predicate a warmer than average summer while simultaneously, soil moisture is reduced across the region following the growing season of 2023. Certainly, insects will be a problem.

Recent snowmelt and rainfall has been mostly absorbed into the soil due to lack of frost, and with cooler temperatures and rainfall predicted through March and into April, the threat of drought can be substantially reduced. The lack of frost encourages absorption into the soil, rather than contributing to runoff that is typical on frozen ground.

A major cause of concern for growers is the sheer cost of producing a crop. An acre of corn, at current input costs, runs upwards of $975 per acre. A single acre of soybeans will cost $750 to grow. This enormous upfront risk carries no guarantee on yield, or what the harvest value of the crop will be. Although certain input costs, mainly fertilizer, have gone down slightly in recent months, the decrease in input costs have been outpaced by the decrease in the future value of commodity crops. Going into the season, margins will be razor-thin.

Again, there is no single determining factor, and the volatility of farming is directly tied to circumstances that are, at times, global.

Currently, 99% of the Brazilian corn crop has been planted. Weather patterns in Central and South America are pointing toward a bumper crop, which will be harvested in June and July. Because of the overlap in seasons, Midwest farmers will have already committed to, and planted their respective crops, with very little certainty on how competing crops will fare. A bountiful harvest in the Southern Hemisphere will directly impact commodity prices here in the Midwest. Likewise, a shortcoming or disaster in any region affects competing markets, but there is no way to know ahead of time.

Even in a global economy, agriculture remains a non-formulaic, highly individualized affair. Last year proved that neighbors can get drenched with rainfall, whereas fields across the road remain dry and untouched. Harvest yields in Southern Wisconsin in 2023 were, as one insurance adjuster remarked, “All over the board.” This historical volatility contributes to yet another unknown as growers prepare for the next season, in regards to payment programs.

Here, it is worth taking a step back to appreciate a historical perspective. Grade school-level textbooks touch on the American Great Depression, citing examples of farmers taking their livestock to market, only to receive payment that fails to cover the basic cost of trucking. There are now contemporary tools available to farmers to cover such catastrophes, but many government risk programs determine payouts based on the previous year’s yields. Since 2023 harvests were scattered and individualized, there is no formula going into 2024 to set up disaster protocol.

At the end of the day, farmers are tasked with the responsibility of marketing a commodity with no guarantee that it can be delivered. Again, the sheer upfront cost of growing a crop, and the risk thereof, cannot be emphasized enough. Baseline protection exists in the form of Crop Insurance, and for livestock producers: Livestock Risk Protection. These tools are designed to provide bottom-line protection for farmers, who carry all of the upfront cost and risk for a uniquely unpredictable outcome.

Agriculture is an individualized pursuit. Success in 2024 will be determined by knowing, with intimacy, individual input costs, and individual costs of production. Farmers will find success in 2024 by covering their individual baselines, and by marketing their products as aggressively as possible. There will be no blanket or formulaic path to follow in 2024; this will be a buckle-down, protect-your-baseline kind of year.

In the meantime, there is a silver lining to the warmer-than-average, drier-than-usual start to 2024, and it has been the chance to get a head start on pre-planting tasks. February brought a unique opportunity to trim fence lines, burn headlands, haul manure, sow grass seed, and essentially get a leg-up on pre-spring work. Farming requires a tremendous amount of faith, and with the work done, now is the time to have faith that the rains will come.

Protect the baseline, watch interest rates, buckle down, and the rest will fall into place.