by Jerry Clark

Farmers, agronomists and researchers have spent decades and careers attempting to nail down the needs and inputs for numerous field crops. Changes occur regularly on farms as new research, information, equipment and technology are developed. Those changes and their associated costs constantly affect agronomic decisions.

An accurate cost-of-production estimate, along with realistic yields and commodity prices, are necessary to manage agronomic inputs as the growing season gets underway. All those agronomic decisions boil down to capturing a profitable commodity market price or lowering feed production costs.

It can be argued that many agronomic decisions don’t have a direct input cost, such as row spacing, planting date and maturity. For example, if seed is purchased and ready to be planted, planting date doesn’t have a direct input cost (unless fuel and labor cost suddenly change). The cost to plant those seeds doesn’t change if you plant earlier or later.

Research does show, however, that there is a significant yield drop the longer planting is delayed for corn and soybeans, and that is where risk is higher for potential profit loss. Planting corn into late May results in a yield decrease of 1.5% to 2.3% per day of delay.

Variable costs

Seed and soil fertility inputs can equate to nearly half of variable costs associated with establishing a crop. Hybrid and variety selection can play a huge role in the size of the profit margin. In University of Wisconsin crop performance trials, the difference in yield from the top-performing hybrid or variety to the bottom is 70 bushels per acre for corn and 25 bushels per acre for soybeans.

Planting population is another factor in seed costs. For example, Wisconsin soybean recommendations are to target a final field population of 100,000 plants per acre to achieve 100% yield potential. Final stands of 90,000 plants per acre result in capturing 90% of yield potential.

Meeting the crop nutrient needs is a balancing act to produce a productive and environmentally friendly crop. Taking legume and manure credits and considering the impact a cover crop has on those credits or on the following crop needs to be considered and adjustments made to the nutrient application rate. Weather, especially precipitation and temperature, has a major influence on how much nitrogen eventually is used by the corn plant.

For starters, keep in mind that in Wisconsin, soil nitrogen contributes to between 70% and 80% of the corn yield. The amount of soil nitrogen available is determined by several factors, including precipitation, temperature, organic matter and, especially, soil type. Sandy-type soils will not hold as much soil nitrogen as medium- to finer-textured soils. One way to get a snapshot of how much potential nitrogen is in the soil and can contribute to yield is to take a preplant nitrate soil test or a pre-sidedress nitrate test. These tests can help fine-tune nitrogen application rates and reduce the risk of overapplication.

Cost of production

Knowing the cost of production on a per-acre and per-bushel basis for a specific crop is critical for grain marketing to identify breakeven and profit or loss scenarios. UW-Madison Extension has developed a Crop Enterprise Budget Tool to help farmers estimate their cost of production. Once a breakeven price is determined, opportunities to capture a few cents may exist as the preharvest season of grain marketing progresses.

This is an excellent time to review various grain marketing contracts available to farmers. Farmers need to understand the special features of each type of contract and the risk associated with it. Farmers also need to consider the effects of market movement on the contract outcome and which contracts might provide the best price protection regarding market movement.

The UW-Madison Farm Pulse Program features a grain marketing curriculum to help farmers understand these contracts. Farmers are encouraged to fill out this survey to express their crop insurance and grain marketing educational needs.

Clark is the UW Extension regional agricultural educator for Chippewa, Eau Claire and Dunn counties.