Input Costs
As 2009 closed out to 2010, the American farmer was faring better than other segments of the economy. However, agriculture continues to suffer problems centered around the collapse of credit from commercial lenders afflicted by the subprime contagion.
The grain outlook typically sees supply changes as the largest price influencer. But since the 2005-06 marketing year, volatility in demand has been an especially important price driver.
If the economy was at “the edge of the cliff” by third-quarter 2008, recent trends indicate that we’ve already stopped the downward economic spiral. Today, economic conditions are more stable.
A pat on the back from the boss is always nice. And a promotion doesn’t hurt, either.
Bryan Kirkpatrick understands two key points. First, if you’re going to store large quantities of liquid fertilizer on the farm, you need dikes. Second, it’s how you buy and sell that determines if you net a payback.
My dad and I agreed to buy a new corn planter together. We ordered it last fall. I could pencil it out then, but not now with sinking prices. Am I obligated to go through with it? Either way I’m dreading telling Dad.
Here are two quick-read ideas that might apply in 2010.
As spring approaches, farmers are eager to get in the field to plant new crops. But before you fire up the tractor and attach the planter, don’t forget to plan all your inputs and develop budgets to help with marketing 2010 crops.
Meticulous management, both in the field and the office, make the difference in profit or loss for dryland cotton on the Rolling Plains of Texas.
As the saying goes, there’s good news and bad news among 2010 crop inputs.
The Plains Cotton Growers’ Seed Cost Calculator has been updated for 2010 and is available from the PCG Web site. The update includes 109 cotton varieties that has been incorporated into the new calculator from 10 seed labels.
U.S. peanuts clearly have dug their way out of a surplus. An ever-growing demand and tighter supply could spell better days ahead for peanut prices during the year.
The spotlight in soybeans shines on basics again. Higher input costs demand it. When it shines on soybean seeding rates, it reveals that most recommended seeding rates carry hefty “insurance policies” against significant plant losses. Maybe the cost is higher than you want to pay.
As row crop-budgets tighten and producers cover more acres, it’s important to evaluate each field operation. Data from the Nebraska Farm Business Association indicates that two of the most important factors when evaluating the profitability of the members’ farming enterprises were yields and input costs. The high-profit third of the enterprises were above average on crop yields produced and below average on input costs.
At Wortman Farms, swine manure is a valued soil nutrient. Without the fertilizer value from the manure, there have been times over the past few years when the swine business would have been a losing proposition.
The term “snake oil” originates in China, where merchants still sell a medicine used to treat joint pain. Originally, the oil was made from the Chinese water snake.
Seed is expensive, and adding traits to provide insect control and herbicide resistance make it even more costly. But, it’s a necessary part of what you do as a row-crop producer in Iowa.
Wheat planted under irrigation isn’t necessarily the easiest crop to grow. Over the past six years, Gene Chohon of O’Neill has pushed wheat yields under center pivot to nearly 120 bushels per acre, but last season he was disappointed when his wheat averaged in the mid-80-bushel-per-acre range.
Last March, Dennis Gengenbach’s full-time employee suddenly quit, leaving the Smithfield farmer in the lurch for the coming cropping season. “It’s hard to keep good help today, especially with such big equipment and the precision technology that goes with it,” says the 61-year-old farmer.
The economic forecast for agriculture is sunshine and storm clouds with a high likelihood for both, according to economist David Kohl.
Rumors abound that America is headed for $5 gasoline. But aside for a few California pumps priced above a “Lincoln,” Tom Kloza, chief oil analyst with Oil Price Information Service, contends a $5 U.S. average is still a few years down the road.
As you look ahead to managing profit margins for corn and soybean production in 2012, cost of production is increasing and grain prices are likely to decline. Iowa State University Extension farm management specialist Steve Johnson is telling farmers to “know your costs and estimate your own 2012 margins. Separate owned land from rented land when making these calculations.”
Once you establish your breakeven cost to produce an acre or a bushel of corn and soybeans, you can do a lot with that number to improve the financial management and profitability of your farming operation.
Someone from a different part of the country recently asked what the 2011 season was like, especially in the central to eastern Corn Belt. The best answer from the audience was “inconsistent.” Variation from area to area and even field to field was the norm, not the exception.
Because of the heat, frequent dry spells, low-humidity and high-evaporation conditions in northwest Kansas and southwest Nebraska, farmers like Dietrich Kastens need to harvest as much “free” water as possible. At Kastens Farms in Herndon, Kan., where only 21.5 inches of rain fall annually, everything is about effective use of precipitation in this predominately dryland operation.
Think you may be dropping too many or too few soybean seeds per acre? You can do two things: First, put out a replicated trial. Second, do simple calculations that illustrate how much you might save in seed costs if you’re still planting at relatively high rates.
Missouri is a long way from the Middle East, but the Oelrichs family farm near Mora has struck oil. Soybean oil, that is. Feeling the squeeze of $4-per-gallon diesel a couple of years ago, they decided to put the squeeze on some of their homegrown soybeans and use the oil to make their own biodiesel.
Many of you know that I’m a corn breeder and an agronomist by training. I was born in India and spent my professional life trying to develop better corn hybrids and agronomic techniques to improve yield levels in the U.S., plus train other corn breeders and help farmers. I believe the most productive farmers in the world are right here. However, all fingers on a hand aren’t alike. It’s the same with farmers.
Did you ever want to know what made something tick so bad that you longed for a peek inside the black box? When the unlikely crew of the timeless movie “The Wizard of Oz” finally pulled back the curtain, they discovered much less than they expected. Ask enough questions about nitrogen recommendations, and you’ll find the data backing the guidelines may not be as awe-inspiring as you thought.
The late, wet fall did more than stretch out harvest. Some fields scheduled for soil testing weren’t sampled. Can you still pull them now? Or should you wait until fall, basing fertilizer rates now on previous soil tests?
Lime neutralized Jim Book’s crop problems.
If the old axiom is true that the last season is the one you remember most for decision-making, then many may be tempted to do everything they can to minimize nitrogen losses this spring. The last two springs, in fact, have featured cool, wet springs that didn’t lend themselves to nitrogen application. Instead, they were tailor-made for losing part of the N that may have been applied.
Cost savings are possible for fuel if you’re flexible on when you buy, and how much you can buy at once. That was just one of the factors that convinced Bryan Kirkpatrick, Greentown, that an on-farm dike and storage center made sense.
I bought a second combine, rather than leasing, to harvest 2,000 acres of beans this fall. It paid off very well. The plan was to sell the used combine after harvest. My son wants to keep it for the next emergency. We didn’t get a corn head with it. What do you think?
Tenacity and technology are giving wheat a boost in southern Minnesota.
Not much wheat is grown south of Highway 212, yet that doesn’t discourage farmer and seed salesman Dick Stangler, Kilkenny.
Some Nebraska Panhandle ranchers now raise more grass, cattle and wildlife by taking part in the Environmental Quality Incentives Program. EQIP is a voluntary conservation program available from the USDA Natural Resources Conservation Service to private landowners and operators.
On Dec. 1, the new North Dakota spring wheat and durum nitrogen rate recommendations were unveiled. The new rates are the product of North Dakota research since 1970. Archived data represents about half of the data, and field research from 2005-2008 represents the other half of over 100 site-years of N rate studies.
Nitrogen management practices for corn have become a popular discussion topic lately.
Steve Alsabrook meticulously uses inputs that will get the job done for Alsabrook Farms at Haskell, Texas. It could be high-tech tools or a generic pesticide if it works for a particular crop enterprise.
In an age where a new combine can cost more than a nice house, many farmers are exploring options they would never have considered 20 or even 10 years ago. They are seriously considering leasing vs. owning, sharing equipment or having crops custom harvested rather than to continue on their own.
Mark Williams of Loomis believes minerals are overlooked on most cow-calf operations. Not his.
Keeping costs down and maintaining health of the cow herd is crucial during the winter months. Custom mixing cow minerals and feeding dry distillers grains or other corn byproducts in a winter ration pays big dividends.
Cash rents rose again in 2011, compared to 2010. It’s one factor that buoys farmland values and contributes to land price increases.
Craig Dobbins says it doesn’t take a rocket scientist to guess which way Indiana land prices are headed. Farmland values are likely to continue rising, but probably at a slower pace.
A Nebraska Public Power District test of 261 irrigation systems provided further evidence of the need to improve irrigation pumping plant efficiencies, and also of the opportunities you have to save both money and water by making improvements.
Dennis Wacker of Plainview has been viewing organic farming from the sidelines. This past season, the 50-year farming veteran began his three-year transition toward organic certification, utilizing a strip-cropping system that conserves soil, gains yield and looks like a tapestry from the air.
Cotton growers have the opportunity to use LibertyLink varieties again this year, giving them a new option against weeds, most notably glyphosate-resistant Palmer amaranth. But North Carolina State University weed specialist Alan York says growers must work together to avoid allowing weeds the opportunity to develop resistance to glufosinate, the new herbicide product that LibertyLink varieties can tolerate.
Now in their mid-fifties, Ralph and Richard Renegar were raised on tobacco. Today they have two grown sons of their own: Ralph’s son, Dustin, and Richard’s son, Justin. And like their fathers before them, Dustin and Justin were raised growing tobacco on Hoot ’N Hollar Farms, the family’s Harmony, N.C., operation. But with the exception of Hank Williams Jr., perhaps, tradition can only take you so far.
It’s dry in much of Texas, but not as dry as it could be. Growers learned just how dry the state could get last year when they had to abandon more than 4 million acres of parched cotton. After that devastating 2011 cotton crop across much of the Cotton Belt, Texas and Oklahoma producers are itching to actually make a 2012 crop.
Three Nebraska cattle producers who have adopted winter grazing programs for their operations are realizing benefits from the practice.
There are probably as many ways to get soybean seed to the field these days as there are farmers and seed companies. What’s more certain is how seed isn’t going to the field — in 50-pound bags.
Farmers want to know if they will have soybean seed to plant this spring. The good news is that most seed industry insiders believe there will be adequate supplies of good-quality soybean seed for planting this spring, especially across the heart of the Corn Belt.
Weed control systems expanded for 2010 if you’re using Roundup Ready or LibertyLink hybrids. Several new options are designed to help improve overall weed control in these systems.
Should you plan on corn fungicide treatments in 2010? The answer isn’t as simple as “How much does it cost?”
Advancing technology is making it easier than ever to monitor your center pivot status, but you don’t necessarily need the latest bells and whistles to eyeball some problems in your system early in the season.
Considering yearly fluctuations in energy prices, flexibility in fuel sources is a good thing for irrigators. Nebraska-based AmeriFuels Energy Solutions, one of the pioneers in marketing irrigation engines that run on ethanol, now has another option for irrigators — an engine that burns both ethanol and natural gas.
For Taylor County, Texas, hay producer Leland Robinson, it’s not just the quantity of hay produced, but the quality.
Nebraska is known as the Cornhusker state for good reason. But the state also boasts one of the nation’s most prolific ethanol production industries with a capacity of 2 billon gallons, or 13% of the nation’s overall ethanol production capacity — second only to Iowa.
Nebraska’s agricultural real estate values jumped 31% in the last year, the largest increase in the 34-year history of the University of Nebraska-Lincoln’s annual survey.
York County farmer Scott Gonnerman tried a sweet experiment on 100 acres of corn in 2011. Gonnerman, who farms southwest of Gresham, applied table sugar to his corn as part of an on-farm research project with University of Nebraska-Lincoln Extension.
With high grain prices, farmers need yield uniformity across their field to take full advantage of their input expenses, including irrigation. In Nebraska, pivots have become the norm, comprising around 82% of irrigation systems, compared to only 60% a decade ago.