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Serving: WI

Grow corn for silage to extend harvest window

Josh Hiemstra Corn silage being unloaded
CONSIDER OPTIONS: In addition to corn silage, plant some early-harvested acres to winter wheat to extend your harvest window even more. The straw from wheat acres is a valuable asset and can be harvested and sold. A good straw crop can net more than the grain crop.
Agrivision: Diversifying can also improve crop rotation.

My son and I farm 2,000 acres in east-central Wisconsin, and we do some custom planting and combining. We normally plant half of our acres to corn and half to soybeans. After two record wet years, this year we have decided to grow 500 acres of silage corn for a neighbor who has a big dairy to extend our planting and harvesting windows. He is also spreading manure on our land. We are wondering if it makes sense to also plant 750 acres of corn for grain and 750 acres of soybeans, or plant 500 acres of corn for grain and 1,000 acres of soybeans? We are concerned about rotations, price and yields. What are your thoughts?

Tom Kestell: I think that your cropping decisions have to be based on past history of success with corn and soybeans. Future implications and advantages of selling corn silage for earlier harvest and also applying manure from your neighbor’s dairy farm onto your land will supplement the needed nutrients for growing your crops. How much manure are you applying per acre? How will this affect your fertilizer needs? In my experience, more moderate levels of liquid manure over more acres is a better long-term plan than a lot of manure applied in one year. Also, are you applying this liquid manure with a hose and injectors? Or are you applying with trucks and top spreading? Compaction can be one of our worst enemies in a wet year.

Another thought would be to plant some of the early-harvested acres to winter wheat to extend your harvest window even more. The straw from wheat acres is a valuable asset to the soil and can be harvested and sold. A good straw crop can net more than the grain crop. One obvious consideration is that soybeans do not need the nitrogen from the manure, so plan accordingly. The application of liquid manure on your land might also require you to file a nutrient management plan.

Sam Miller: Diversifying your revenue by adding in corn silage sales can be a good addition to your business. The answer to your question depends on several choices — what are the economics of growing corn versus soybeans and how does this impact your rotation for fertility and weed and insect control? Address these separately by completing a forecast for corn versus beans and analyzing the input costs for each crop. Your agronomist or crop consultant can assist in completing this analysis. A farm technical college instructor or Extension ag agent can assist in the economic analysis. Good luck with your crop plan.

Katie Wantoch: Crop rotations have many benefits. A biennial rotation of corn and soybeans produces significant increases in yields in both crops as compared to monoculture (planting of the same crop in the same field). Annual rotation of crop fields helps to improve long-term soil health, sustainability and production with fewer inputs. Corn planted after soybeans requires less nitrogen fertilizer and may cost producers $25 per acre less than continuous corn. Because of the narrow profit margins in crop production, yield increases and reduced production costs can have a great effect on overall profit. Take time to review and plan out your crop rotations, yield and production costs of each crop to determine a profitable cropping enterprise.

Timing farming retirement

My wife and I are in our late 60s. We milk 90 Holstein cows and farm 220 acres in northeastern Wisconsin. We started thinking about selling our cows in 2014. Then 2015 milk prices dropped and so did cow prices, so we kept milking. Now that milk prices are finally improving, we are wondering if we are better off selling our cows next fall or waiting until next spring? Fortunately, our only debt is $50,000 we still owe for a new tractor I bought in 2014. Our plan is to sell the cows, heifers and machinery. Our neighbor has already talked to me about renting our land. We will miss the cows, but not the work. Even with a full-time hired man, it’s getting to be too much work for us at this stage in our lives. Please advise.

Tom Kestell: Congratulations on a successful and long career in dairy farming. Not everyone gets to choose their exit time and has the luxury of planning it over several years. It is good to be in the driver’s seat as you are. I think I would explore the possibility of selling your milk cows as a group. People today are looking for immediate payback on their investments. Short bred heifers and calves typically do not sell well, and it is not easy to sell them at a profit at this time. If you have the feed available and the desire to feed out your young stock until close to calving, maybe the buyer of your cows would be interested in also buying your future replacements?

I feel the two most important aspects of your retirement are: one, tax consideration, and two, not having feed left over in silos and barns that are hard to sell. Maybe this year you could sell your feed off the field and only hold enough back for your needs until your cattle are sold. Try to make sure that your exit from your dairy career is as enjoyable and successful as it can be — you have earned that privilege. Please talk to an experienced tax adviser who you trust. This can be the best investment in your future. Maybe selling your assets in different years will benefit you financially. Plan ahead and consult several different advisers to choose your best options.

Sam Miller: Your question is really about timing, as you have made the decision to exit the business. Start the conversation with your tax preparer. They will analyze the cost basis for the cattle and machinery, and you can make assumptions on capital gains at various sale prices. Contact reputable auctioneers to ask their experience as to the best time to sell the cattle and equipment. You may find out it makes sense to sell them at different times. It may also make sense to spread the asset sales over two years — such as cattle this fall and machinery next spring. Your accountant can help with this answer. Good luck with an orderly sale and move into retirement.

Katie Wantoch: You’ve probably worked hard over the years and are hoping to sell when the market is at its peak. But I would caution you to take a step back and consider what you need from this sale rather than trying to determine when best to sell. Have you calculated what your family household expenses will be after you sell livestock and machinery? How will you be funding these expenses, with the sale of farm assets or other income? According to the University of Minnesota FINBIN database, total cash family living expenses for dairy farms in 2018 was $50,844. Knowing how much income you will need will assist you in determining if you should sell at today’s prices or wait until prices are a little better, knowing that prices may also decline during that time.

Agrivision panel: Tom Kestell, dairy farmer, Sheboygan County, Wis.; Sam Miller, managing director, group head of agricultural banking, BMO Harris Bank; and Katie Wantoch, Extension ag agent specializing in economic development in Dunn County, Wis. If you have questions you would like the panel to answer, send them to: Wisconsin Agriculturist, P.O. Box 236, Brandon, WI 53919; or email [email protected].

TAGS: Crops Dairy
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