During his 30 years as a grain crops extension specialist at Penn State University, Greg Roth has seen plenty of ups and downs in the ag economy.

Greg has some thoughts on how farmers can economize. “I’ve pulled these from experience in working with farmers and what they’ve done in previous economic downturns. Many farmers are doing some of these things already. But my hope is that perhaps they’ll pick up a thing or two that’s new,” he says.

“There are two basic areas to think about,” Greg says. “One is fixed costs, which includes things like machinery and land. The second is variable costs, which includes things like fertilizer and pesticides.”

Fixed Costs

Machinery costs can be tremendous, so Greg advises starting there. “Consider postponing machinery upgrades,” he says. “Try to maintain our existing machinery as best we can to get the most life out of it.”

“One approach would be to consider some types of joint ownership,” Greg says. “For example, one farm has the planter and maybe another farm has a combine. That way each farm doesn’t need to bear the total cost.”

“Another tactic would be to provide custom work or rely on custom work from neighbors or landowners,” Greg says.

“In the past that may have created some issues with timeliness. But I’ve seen in the last decade or so that many folks have upgraded their capacity in terms of planting and harvesting. We have larger planters and combines out there that have really helped with the timeliness problem,” he says.

Greg says, “For example in our neighborhood, several 12-row planters plant a lot of corn in a hurry. So it’s less likely that they’re going to be delayed very long until they get to your individual operation.”

Booking seed early to maximize planting date flexibility is smart. “Some folks have talked about making special arrangements for early planting needs—or early or late harvest—to fit into the custom operator’s schedule,” he says.

The other major fixed cost is land. “It’s difficult to renegotiate rents,” Greg says. “Rents in our area are often times all over the board. But we ought to at least look at some of the lower-producing fields and see if they’re really paying the bills.”

“Another related issue is as we get into using more yield-mapping technology, look for areas of fields that are historically low-producing,” he says. “We can consider whether these sections or fields can be converted into another use, like hay or perhaps some sort of conservation program that would take them out of production. Or just retiring those acres altogether.”

“Our corn production has expanded onto fields that are traditionally not suited for corn production. It might be that we need to pull back from some of that at this point,” Greg says.

Variable Costs

It may be easier to control variable costs, such as inputs, from year to year.

“On the nutrient side of things, prices have pulled back a little,” Greg says. “But I still think everybody needs to sharpen their pencil on their nutrient management.”

“Some basic key considerations are to manage individual fields. Our fields often vary a lot in their fertility, based on past history, manure rates or previous cropping history.”

When looking at nitrogen, growers should take the history of the field into account. 

“We should also consider splitting up our nitrogen in corn. Starting with a conservative upfront nitrogen rate and following with a second, side-dress application, contingent on crop and weather evaluations, is a good strategy,” Greg says.

“Increasingly we have some nitrogen modeling programs that can help guide us in that regard.”

Greg says that for phosphorus, soil testing is key. “Many of our fields are at or above optimum based on the manure that’s been applied over the years. I’d still think about being sure I was replacing what I was taking off on lower-testing fields.

“I’d also be looking at avoiding some of the more expensive sources of phosphorus that we can get into, especially some of our starter fertilizers,” he says.

“In our region, in the east, potassium is not buffered that well and it can change rapidly,” Greg says. “So it’s good to test soils pretty frequently, monitoring potassium levels, watching for potassium deficiency in corn and soybeans and making sure these soil nutrient levels don’t drop below optimum levels.”

“As far as other inputs, I would offer a couple of thoughts. If you have a crop consultant, which I encourage, it would be a good idea to pay attention to recommendations especially in this low price environment,” he says.

“Crop consultants tell me often farmers will apply insecticides, herbicides or fungicides when crops are at less than threshold levels. Even though we’re inclined to do everything for the crop we can, sometimes these in-season applications aren’t warranted. So think about thresholds and whether you really need to make a treatment.”

“However, on some of the new herbicide-resistant pigweeds and mare’s tail, we need to have a really low threshold because we really want to eradicate those before they become too much of a problem,” Greg says.

He explains that when crop prices are lower, some pesticide applications are simply not as profitable. “For example, in a fungicide application on corn, previous history indicated a six bushel-per-acre advantage at six dollars per bushel would be a $36 dollar revenue, which would pay for a $30 application. But when you’re at four-dollar corn, that’s $24 in revenue, and that’s not going to pay for the application.”

“We need to be a little more judicious in selecting pesticide applications that are going to pay for themselves,” Greg says. “And it also requires doing a good job of following up on what some of these crop inputs can pay back.”

“That’s where I think precision ag could be utilized more, by doing some pre-plant comparisons of things like fertilizer rates or plant populations,” he says. “Then we can evaluate yield maps in the fall as part of our management to see whether or not we’re getting the benefit in our fields from the inputs and selections that we’re making.”

In Summary

Greg says that another benefit of precision ag is that section controls can help with savings. “In our small fields with complicated boundaries, we can see a real benefit in both corn and soybeans from shutting off rows when we encounter previously planted areas. And that can add up to 10, 15 or 20 dollars an acre in seed costs.”

“One basic tenet I’ve learned is that often we have to substitute knowledge and management for inputs,” Greg says. “Having an advisor you can count on is often a key part of this process. So I would try to align myself with advisors that are giving me good information and do what it takes to keep them as part of my team.”

“For Doebler’s customers here in the east, we have a lot of advantages,” he says. “We have manure we can rely on because of our many livestock farms. We have a positive basis for corn, so crops are worth a little bit more. And we have a diverse cropping system where we often have corn being planted after hay or other cover crops that can provide a lot of nitrogen benefits. All of these things are helping us buffer the low prices in commodities these days.”