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Corn+Soybean Digest

Cost Cutting Kings

'Net income is what we live or die by. So the bottom line, instead of just having the very top yields, is what's really important."

That's the motto of Phil McLain, Statesville, NC, who, with his brother, Mike, won the North Carolina Soybean Most Efficient Yield (MEY) contest in both 1996 and '97. Stingy and untimely rainfall knocked them out of contention for '98.

The McLains have remarkable bottom-line statistics on their three-acre MEY contest entries: 65 bu/acre at a total cost, including land charges, of $1.95 per bu in '96; 70 bu per acre and a total cost of $2.27 in '97.

Obviously, neither the McLain brothers nor any of the state's efficiency contest winners can make those bottom-line figures on their total soybean acreages - or even come close. If they could, Southern soybean acreage would rocket up again. But the principles learned apply.

At McLain Farms, they raise about 1,500 acres of soybeans yearly. They strictly adhere to a crop rotation that includes corn - mostly for silage for area dairymen. But they also grow some for grain, plus they grow wheat, barley, cotton and soybeans.

With mostly rented land for their sizable acreage, the McLains averaged 40 bu/acre for their entire 1,500 soybean acres in '97, 35 bu/acre in '96 - substantially above the state average.

There are several key factors for getting low-cost-per-bushel and high, or at least decent, net profits with soybeans, say Phil and Mike. But at the very top is no-till, with crop rotation probably second overall. They started working into no-till in 1978 and have been 100% no-till for at least eight years.

"No-till is the one single factor over the years that has done the most to help make us more cost effective," says Phil. "That may not be true across the country, but it is for farmers in our area."

Mike agrees. "In no-till, we're making fewer trips over fields, and that alone cuts probably $15 to $20 an acre off our costs. No-till also increases moisture retention, which helps on yield."

When the soil isn't worked up, weed seeds, especially small-seeded annuals, aren't brought into the germination zone. Over time, the weed seed bank is reduced, the McLains say.

"Our weed populations are going down each year, and we're using less herbicide through cutting rates than we were in a conventional system," says Phil. "That's opposite of what a lot of people say. Many people claim the chemical expense will go up with no-till, but in our experience, that's simpl y not true. We have dropped our chemical costs from about $22 an acre to about $15 an acre."

Wear and tear on equipment is substantially reduced, too, with no-till. The residue mulch, which persists through harvest with no-till, provides a surface for the combine head to slip over. That reduces the amount of steel-wearing dirt that passes through the combine with conventional till.

That, plus reduced foreign matter because of cleaner, harvested soybeans under a drilled bean canopy, nets the McLains a premium at their elevator, too.

"Cargill pays a premium of 1% of the price of soybeans for having foreign matter dockage under 1%," Mike explains. "We pick up a premium on most of our soybeans without any problem."

The improved soil structure that evolves with the increased crop residue when using no-till also proves a plus in the planting and spraying seasons, and again during harvest. You can stay on top of the ground for more timely spraying instead of sinking in a day after a rain. Machinery won't sink in as much if weather is wet during harvest, either.

Several other key factors are extremely important in cutting costs or hiking yields, so you have more bushels to spread per-acre costs over. All but one, doublecropping, would apply in the North as well as the South.

Here, the McLains say, are the most important ones:

* Doublecropping. It gives two crops to spread fixed costs over, thereby reducing cost per bushel. Normally, soybean yields are lower with doublecropping because of later planting. But the McLains push hard to beat the late planting yield penalty deadline, usually finishing soybean planting the same day they finish small grain harvesting.

* Rotating crops. It's a must to hike yields, hold down disease and insect problems, provide the necessary crop residue and improve soil condition.

"Crops grow better behind another crop than they do behind themselves," Phil says. "Crop rotation is a very important tool for crop-growing efficiency."

* Selecting the right varieties. "You can be 20-25% better than the state or county average by working harder at variety selection," Phil says.

"For example, there was nearly a 10-bu yield difference between the highest- and lowest-yielding variety in our test plots in '98." "Variety testing on our farm is a lot of extra work, but it's something that has helped us be more profitable."

Phil says the efficiency contests have made the brothers focus on what they needed to focus on - how to squeeze down their production costs.

Both of their efficiency contest wins were with Asgrow varieties.

* Using a stripper header for combining. That's a must to preserve needed small grain residue that can give no-till a big advantage over conventional tillage. With the standing straw left after a stripper header, there will still be residue left for the corn the following year, Mike reports.

* Planting cover crops. With so much of their acreage in corn for silage, Mike says a cover crop is needed to provide residue in the following no-till crop.

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