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Corn+Soybean Digest

It's All About Profits

Every year I take a week away from my desk to ride through Iowa's farmland in RAGBRAI, an annual across-state biking event. It gives me a chance to see farming at a leisurely pace, rather than the deadline-driven road trips I'm more used to.

As I rode across Iowa this summer, I was thinking that there just has to be an easier way to honor the old weight-loss maxim: eat less, exercise more. The mind does tend to wander when you're biking up to 100 miles a day into 20 mph winds.

With seven days to appreciate Iowa countryside, you also start to appreciate some of the minutiae of the view. For me, this year, I seemed more focused on all the different signs for corn and soybean seed companies.

Obviously there are a lot of different options for you to try to maximize corn and soybean yields. That thought was still wandering around in my brain when I returned to my office and found new data that shows just how critical those choices are.

If the key to farm profits were reduced to four words, just like the weight-loss rule, they'd be “low costs, high volume,” according to the most recent analysis of Illinois Farm Business Farm Management Association data.

Of the 585 farms examined in the study from 1995 to 2001, high-profit farms tend to be larger, have slightly higher yields, lower costs and rent more farmland with share rental arrangements than less profitable farms.

“Low-profit farms in one year tend to be low-profit farms in all years,” points out Gary Schnitkey, University of Illinois (U of I) farm management specialist.

Schnitkey claims it's difficult to stay in the top one-third category once you make it there. In fact, only 5% of the farms stayed there all of the years studied. However, 36% of the farms were in the high-profit, one-third category more than half the time.

On the flip side, farms in the lower income groups tend to be smaller than the high, one-third farms. Also, farms in the higher-profit group tend to own less farmland.

So as you gear up for harvest, pay particular attention to practices giving you bin-busting yields that will bump you up into the high-profit group. It might be what seed sign hangs next to the field, your tillage practices, your herbicide programs or all of them.

For a full look at the U of I study, log on to and look under “Illinois Farm Economics: Facts and Opinions.”

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