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Why you should focus on profit, not just yield

tractor doing tillage in field
COUNT THE COST: Instead of worrying about yield, why not focus on profit? How much does each tillage trip cost you?
Commentary: Yields make for bragging rights at the coffee shop, but they don’t tell the whole story.

Every community has a coffee shop where farmers go to drink coffee, solve the problems of the world, meet their social obligations, gripe about grain prices and the weather, and yes, occasionally brag about yields. The quality of the coffee varies, but it’s not about the coffee as much as the social interaction, commiserating with your peers, and going back to work feeling a little better about life and what you must face.

Here’s my question: Why do farmers talk about yields? Granted, yields are important. You must produce a product that can be marketed at a price that hopefully produces profit. Yield must be enough that input obligations can be met, with enough left so you can improve your operation and provide living expenses. At the same time, profit can’t be sacrificed just to obtain yields that are fun to brag about around that coffee shop table.

Is it truly possible for every farm to beat the county average yield? Think about it. Have you ever heard someone admit to less than the county average yield? It’s not possible for everyone to beat the county average.

An alternative

Instead of thinking so much about yield, farmers ought to start thinking about their operations from a profit standpoint. I’ve worked with farmers who can provide a specific number for what each operation costs, and others who had no real idea what each tillage pass was costing them. 

What is the value of one less tillage pass? What is the value of one less herbicide application? What is the value of moving your nitrogen application from fall-applied anhydrous to a split application closer to the time the corn crop needs nitrogen? Do you have the numbers to answer these questions on your farm?

Inputs into an operation are just as much of the bottom line as yield and price per bushel at the elevator. Why don’t you sit down during the coming winter and start putting some numbers together on what each operation of your system costs? 

The final cost needs to include both out-of-pocket expenses such as fuel and prorated expenses such as the cost of owning equipment and labor. Many farmers tend to discount their time if they’re not hiring additional labor, but everyone’s time is valuable and needs to be included.

Once you’ve determined a cost for each operation, consider ways to reduce inputs. What is the value of one less tillage pass? How much will one less tillage pass reduce your fuel costs? Will growing a cover crop allow one less tillage pass and one fewer herbicide application? Should you make one change at a time, or can you totally change your system, raise soil organic matter levels, and reduce chemical and fertilizer bills all at once? 

Farmers across the nation who are making that soil health journey toward regenerative agriculture are finding they can consider reducing inputs over time. And they find that if you start farming for profit and not yield, then yield comes along for the ride. Farmers moving to regenerative agriculture systems are finding maintained or improved yields over their previous system. 

Donovan is a district conservationist with the Natural Resources Conservation Service. He writes on behalf of the Indiana Conservation Partnership.

TAGS: Conservation
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