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Corn+Soybean Digest

Programmed For The Future

Contrary to their state's "Show Me" motto, Missouri soybean growers have decided it's time to prove that what's good for agriculture can be good for the environment.

They started a project to address water-quality issues, but quickly expanded it into a computer program that will allow farmers to evaluate their financial future for the next decade.

"We were tired of going to all these meetings where people blamed farmers for water-quality problems," says Dale Ludwig, executive director/CEO for the Missouri Soybean Merchandising Council. "It's a lot easier to address environmental issues emotionally than scientifically. We finally realized if we didn't do something about finding answers, it wouldn't get done."

So the Missouri growers anted up $50,000 worth of checkoff funds and joined forces with the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri to use its computer models that analyze financial and environmental viability at the farm level.

The FAPRI staff expanded the effort to include their farm financial system. The result will be an online program, called Farm Financial Forecasting Service (F3S), that farmers can use via the Internet.

Using the FAPRI projected crop and livestock baseline, farmers can evaluate the economic viability of their business through the next decade. Data generated from the environmental program will be available as a tool for farmers to use just as the Universal Soil Loss Equation has been a tool for addressing soil erosion.

"I have good production and financial data, but it's still a hassle to project a management decision out into the future," says Steve Alexander, a Hopkins, MO, farmer. "For the first time, this program will combine economic and environmental computer models so farmers can see the effect of changing tillage systems or using different herbicide programs.

"But the biggest thing about this project is it's proactive stance on environmental legislation. We can go to the policy-makers and back up our position with relevant data," he says. "Before, we were always spending our time trying to start something or stop something.

"You need to be in the lead because once legislation is in place it's very difficult to get changed."

Both the financial and environmental models were used to analyze three representative farms in northeastern, central and northwestern Missouri. The farms were generated with data collected from a panel of farmers and a farm chemical dealer in each region.

Farmers on each panel provided input on crop acreages, farm program history, production costs, livestock enterprises, historical yield and prices, and machinery. Then they combined the data to create the representative farms for the economic and environmental projections.

"The projections showed us we need to make some changes," says Alexander, who farms in northwestern Missouri. "Some of the numbers looked pretty bleak. One thing we need to watch is our machinery expenses."

By next year, Missouri farmers should be able to log on to the F3S Web site, plug their own numbers into the program and get a realistic look at their farms' financial future. If they don't like what they see, the program will allow them to try "what if" alternatives to look for ways to improve their bottom lines.

The alternatives aren't complex. What happens if I use more Roundup Ready soybeans? What happens if I switch to a different herbicide than the ones I've been using? The FAPRI program does not make recommendations, but can evaluate the alternatives.

"It's important to note that this is done in a forward-looking framework," says FAPRI's Peter Zimmel. "Projections of crop prices, input costs and other factors are all used to drive the analysis. This gives producers a tool to analyze how a management decision may impact their farming operation financially in the future."

By using data from FAPRI's environmental model, farmers also can look at ways to change how they farm without hurting the environment.

"For example, consider the new farm program," says Zimmel. "In the past, producers were essentially locked into what they could plant and how many acres they could plant if they wanted to receive the benefits of the farm program. With the new bill, farmers can plant any combination of crops and acreages. The FAPRI models will help measure the effects associated with changing rotations and other management decisions."

"Our whole premise has been that if we can successfully control nutrients, crop chemicals and erosion we'll make life better for farmers and address water quality issues at the same time," says Dale Ludwig. "No one else has this type of data that ties economics in with these other issues. For the first time, we can put real numbers with different farm practices."

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