Farm Horizons, Dec. 2017

Managing crop input costs

By Dave Schwartz
Certified crop advisor, Gold Country Seed

The farm economy has changed dramatically over the past five years.

As an example, five years ago, nearly all seed sold was paid for by check, and growers were asking for a corn hybrid with the entire trait package.

This year, well over 50 percent of my customers are purchasing seed using our finance program, and only a small fraction of the seed I sell is stacked with all of the traits.

Let’s take a look at input costs and see where we can possibly trim expenses and maintain profitability.

Fertilizer – Growers will get the most bang from their fertilizer dollars if they direct more to fields that are testing low in soil fertility. If soils are testing high to very high for phosphorus and potassium, they are less likely to respond to additional fertilizer. Fields should be soil-tested every three to four years, so growers know which of those fields most need fertilizer.

One other fertilizer topic that deserves mentioning is the use of micro-nutrients. In general, micro-nutrients are expensive, and called “micro” nutrients because they are used at very low levels by a crop. The only micro nutrient to be concerned with in the Wright County area is zinc, and then primarily for corn production. University of Minnesota soil fertility specialists recommend broadcasting 5 to 10 pounds of zinc if soil tests below 0.75 parts per million (ppm).

Weed control – Good weed control usually requires a pre-emerge chemical to control weeds early in the growing season, and then coming back later with a post-emerge product. If we try to cut back and only make one application, weeds will normally win the battle and yields will suffer. Make sure at least one of the treatments is effective in controlling giant ragweed and waterhemp.

Seed – As I mentioned earlier, growers this year are moving away from heavily-traited corn hybrids to save money. For growers who have been using traits for corn root worm and corn borer, it’s possible that insect populations are low enough to enable corn growers to get by with straight Roundup or conventional seed. Talk to an agronomist in your area and get their opinion on insect pressure.

Another way to save seed dollars is to lower soybean seeding rates to 140,000 seeds per acre. Final soybean populations in the 110,000 to 120,000 plants-per-acre range are sufficient for optimum yield.

Land rent – Land cost rose rapidly when corn hit the $8 per bushel mark. Now that corn is under $3 per bushel, land rents need to be adjusted downward. One customer told me he has a system with his landlord where he pays a base rent. If the price of grain improves during the year, the tenant pays the landlord a pre-determined premium. These types of flexible rents are feasible if landlords and tenants can agree on the terms.

I learned in the 80s ag crisis that farms that are in financial trouble need to take action on their debt early and be proactive rather than reactive. Selling equipment, restructuring debt, and letting land go that has not cash flowed well are examples of actions farmers may need to consider, in order that their operations cash flow.

Farm Horizons: Main Menu | 2017 Stories

Herald Journal
Stories | Columns | Obituaries | Classifieds | HJ Home