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Land Values: Think efficient, not cheap — and ask questions.

February 1, 2019

3 Min Read
young crop in field

By Ross Albert

As we work our way through crop planning season, with the farmers I work with, I’ve come across three areas where we can all improve thin margins for 2019. 

1. Look for creative chemistry plans. I want to be clear that I am not advocating a cheap plan — just an efficient one. Uncontrolled weeds will steal profit, and cheap is not always efficient. I challenge crop managers to understand active ingredients in their preferred pesticides and to see if those same key ingredients can be sourced at a better price point. 

Ask a lot of questions of chemical reps, and read labels closely. Be careful on the formulations and what safeners may or may not be included. When in doubt, go with products with proven performance. If your consultant recommends a product, know why. Make sure the recommendation is best for your farm.

Lastly, don’t be afraid to ask other farmers what works for them. I’ve learned about some very good programs simply because I asked. More experienced professionals can share techniques from years prior that may fit in our world today. 

2. Use integrated pest management. Today’s slim returns mean we need to think in terms of economic treatment threshold. Loosely spending input dollars can create a breakeven that is higher than where commodity prices are. One example that I have implemented is monitoring corn rootworm populations and making plans accordingly.

Last summer my colleagues and I made an effort to monitor rootworm populations more closely on managed farms. This was an effort to determine if we still needed to allocate inputs dollars to controlling corn rootworm. We found that in many situations, our populations are low enough to save those input dollars.

This is an example for just one pest that we need to consider, but this is true for all input costs. Again, ask you self why you are doing something. If there is not a return on investment backing up the purchase, reconsider it.  

3. Be a grain merchandiser. With large production numbers and a surplus of grain, farms with on-farm storage have been able to add to the bottom line. Local basis swings and decent carry in the futures market have helped improve the net price for corn and soybeans. Direct marketing to the end users is also helping to increase net price. It is not uncommon to pick up around 15 cents of basis appreciation, 30 cents worth of carry and 10 cents from direct marketing. That means on-farm storage just added 55 cents per bushel.

If you have on-farm storage, you need to be a merchandiser to make it pay. Talk to your local grain elevator manager and ask him or her for some ideas. Drive the countryside and see what bins are sitting empty — maybe they could be used by you? Again, asking questions can yield fantastic results.  

In the end, be inquisitive in your management. Asking questions is a powerful thing. I hope these ideas can ultimately help you create a more profitable crop plan.

Albert is a farm manager with Soy Capital Ag Services, Bloomington, Ill., and is a member of the Illinois Society of Professional Farm Managers and Rural Appraisers. Email farm management questions to [email protected].

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