Plan a Budget and Stick to It

It is no secret that the current agricultural economy is not doing producers any favors as another growing season approaches and crop input decisions need to be made soon. In order to survive these challenging times, it imperative that growers have a firm understanding of their input costs and build a plan to maximize their return on investments and stick to it.

To begin, all input costs need to be identified and divided into two categories, set costs and flexible costs. Set costs are things such as land/rent payments, taxes, interest on borrowed money, equipment costs, etc. There is little to nothing that can be done to lower these costs, so any savings need to be made on other inputs.

The first decision is what crop should be grown? While most producers will decide between corn or soybeans, this may be an opportunity to explore other crops such as wheat or other small cereal grains if there is a market for them in your area. It is important though to consider all impacts of trying a new crop such as equipment compatibility, access to crop protection chemicals, and transportation.

What seed variety should be grown? Work with your local seed agronomists to determine what varieties perform well in your area. While yield is important, the highest yielding varieties may not be the most profitable because they often require additional inputs to produce the highest yield. Look for varieties with a good record of resistance to pests and diseases that are known in your area and don’t pay for traits that are not needed.

Crop protection inputs (herbicides, fungicides, insecticides, etc.) need to be planned and budgeted in advance. This is where previous years of crop scouting can really help. You can generally assume the same weeds and diseases that were a problem over the last few years will likely be again. Budget for a worst-case scenario and use crops scouting and integrated pest management strategies to determine when an application is needed to get the most benefit from the application.

Soil fertility inputs need to be determined from recent soil test data. Ideally less than two years old. Identify what nutrient or other factor is the most limiting. If your pH needs to be raised, liming should take priority over fertilizer. pH determines nutrient availability. So, if the pH is off, the efficacy of your fertilizers is jeopardized. Determine if phosphorus or potassium is more limiting. Phosphorus fertilizers are much more expensive currently. So, at a minimum try to maintain phosphorus levels rather than build them up and certainly avoid applications where soil tests are high. Potassium fertilizer is currently more affordable and potassium soil test levels can drop much more quickly than phosphorus. If the budget only allows for phosphorus or potassium, prioritize the potassium.

The two most important things a grower can do in these tight times is first, do not try to do it all on your own. Rely on advice from industry agronomists, independent consultants, and grain marketing specialists. Second, stick to your plan. Don’t make any rash decisions that could lead to a complete crop failure. Don’t look for a silver bullet, there is no single product or practice that is going to save a poorly managed crop regardless of how good the sales pitch is.