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Corn+Soybean Digest

A Game Plan For Southern Soybeans Many growers need to rethink their strategy

Last year was one that most Southern soybean growers would like to forget. Drought lowered yields while poor prices and high costs further deflated profits.

The mood among some farmers for '99 is that it's not worth it anymore; they'd rather let fields lay fallow than plant beans.

There's no doubt that '98 was tough. If farming can be compared with playing football, last year was a losing season for most Southern soybean growers.

What does a football team do when it has a losing season? The coaching staff has to examine its entire scheme of things, both offensively and defensively.

To bring back profitability, the Southern soybean farmer must do likewise. There are no magic bullets to bring a quick turnaround. Here are some aspects of the mental approach to producing and marketing soybeans that may have to change for profits to improve significantly.

Over the years, Southern labor has generally been plentiful and cheap. A farmer would simply tell his No. 1 tractor driver to go plow the back 40 and it would happen with no problem. Today, reliable labor that can adequately perform tillage, planting, spraying and harvesting operations is hard to find.

But it seems some growers haven't caught on. Many, for example, still rely on a $6/hour driver in a $160,000 combine equipped with a yield monitor and GPS unit to harvest a 500-acre crop worth more than $100,000. They may ask the same guy to go spray Roundup on Roundup Ready beans, but some non-Roundup Ready beans get sprayed by mistake.

Those are examples of the "plantation" mentality at work, and the picture is sometimes not pretty. In addition, other labor-related headaches seem to dog lots of Southern farmers.

What to do? One solution is to hire a few qualified people who can do a myriad of things, pay them well (including fringe benefits such as retirement and health insurance), and offer to cut them in on the farm profits. These types of incentives will help secure farm labor that will stay around and perform duties with timeliness and efficiency.

Another possibility is to cut the equipment inventory and try to be more efficient in assigning crop management duties. For example, a move to more conservation tillage and drilling could reduce the need for both labor and equipment.

Most successful Southern cotton farmers closely monitor all facets of their production, including variety selection, tillage, scouting and pest management, harvesting, etc. What kind of soybean managers are these same farmers?

Most give soybeans the same kind of attention, but others have a mentality that soybeans are a low-value crop and should be treated as such. They basically plant them and forget them. It's a formula for failure!

Soybeans are a crop that responds well to management, just like cotton. But lots of Southern farmers have never given the crop the attention necessary for high yields and profits. This is why the South lags behind the rest of the country in per-acre yields. The crop seems to gravitate toward the bottom rung of the management ladder and then, often in subtle ways, it turns on the farmer and causes serious losses in income.

In fact, at a production meeting several years ago, some farmers referred to soybeans as the "silent killer." If farmers continue to treat this crop as the red-headed stepchild, it may well be true for some.

Often at meetings, farmers are heard complaining about the costs of a new drill or perhaps a deep tillage implement. Some may have driven a new $25,000 pickup truck to the meeting, or bought a new $65,000 tractor because it was just time to get one.

This example perhaps is a little too simplistic, but capital expenditures may be another mental facet of the game that Southern growers should analyze.

The expenditure of capital is the old way that ag productivity could be improved. Many of the newer technologies, however, are designed to make the farmer more efficient and improve sustainability. Yes, there are some needed capital investments, such as for a drill or yield monitor. But the big investment is probably going to be in management; more specifically, retooling or retraining to be a better manager.

Rather than hard capital investments, it will be investments of time. Farmers who embrace this mentality will be the ones who survive with higher profits.

Finally, soybean growers who survive will have to become better market-risk managers. There are many ways to avoid selling crops at the elevator for typically the lowest price of the season. Forward pricing, options and other tools are available, but farmers must again invest their time in learning about these methods.

Land-grant universities across the U.S. are gearing up to provide more market-risk management advice in workshops, shortcourses, etc. But farmers must take the initiative to inquire at their local extension offices about what help is available.

The world situation with soybeans is complex and very volatile at times. However, a farmer can become an expert on the soybean price situation and outlook by subscribing to one of the satellite networks providing regular market and production updates, weather, ag news and other timely information.

Subscription prices are reasonable and the impact on profits can be tremendous, regardless of the commodity.

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