Farm Horizons, December 2014

Managing crop input costs

By Dave Schwartz, Certified crop advisor, Gold Country Seed

“Got to cut somewhere,” is a phrase I am hearing on a regular basis this fall, as I meet with growers.

When the price of corn drops from $7 per bushel to $3.50 per bushel, it’s understandable that growers will need to make adjustments in their expenses to make crop budget’s cash flow. The challenge is knowing where to make these cuts and maintain profitability.

Land rent is one expense that has risen dramatically the past few years. It is difficult to make crop budget’s cash flow when corn is $3.50 per bushel and land rent is in the $300 to $350 per acre range.

Landlords and tenants will need to negotiate a contract for the coming year that is fair for both parties.

One other option is to go back to renting land on a share basis, 40-60 or 50-50, where the landlord shares in expenses and the crop.

Fertilizer costs are another area where growers may be able to shave expenses to make ends meet.

I recall University of Minnesota research that found the optimum rate of nitrogen for corn in a corn/soybean rotation was 120 pounds per acre. This rate of nitrogen will produce corn yields well over 200 bushels per acre.

Application timing of nitrogen is important, too. Remember that spring-applied nitrogen will normally out-yield fall applied nitrogen.

I have noticed growers have experimented with more micro-nutrients the past few years. Micro nutrients are normally expensive, and returns on the investment are variable, unless soil tests call for micro-nutrients.

One other way to reduce fertilizer cost is to band phosphorus and potassium, rather than broadcast. This will provide growers significant savings.

And don’t forget the residual nutrient value of livestock manure the second and third year after application. Livestock manure is simply the best fertilizer, if it can be applied when soils are dry, to minimize soil compaction.

Seed cost, like other inputs, has risen the past few years. From my position as a seed dealer, I think growers who have been using the corn rootworm trait in the past, can get by one year with only the Bt gene for corn borer, or straight Roundup when planting corn on soybean ground. There has been strong demand for corn with fewer traits that is less expensive, so it may be difficult to find certain genetics. Corn hybrids oftentimes are offered with only one or two traits, so finding good genetics with the right trait package may be a challenge.

Equipment costs are a significant expense for corn and soybean growers. In some cases, it may be more economical to hire a neighbor than go out and purchase new equipment. You may find the neighbor’s newer-style corn planter does a much better job of seed placement and uniform emergence than your worn-out planter.

For information on custom rates for farm equipment, go to the Iowa State website at http://www.extension.iastate.edu/agdm/crops/pdf/a3-10b.pdf.

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