Farm Horizons, February 2014

Belt-tightening is back

By Dave Schwartz
Certified crop advisor, Gold Country Seed

When I was county extension agent in Meeker County during the mid 1980s, I had an ag advisory board that provided input into my ag programs. Their input helped me plan programs that they felt were important. The group was very helpful in providing direction for me as I planned programs for crop and livestock producers.

This was a period of time when land prices crashed, dropping more than 50 percent over a two- to three-year period. At one of our planning meetings, one grower suggested we focus our crop programs on belt-tightening as a way to cut expenses that would increase farm operations’ cash flow.

I still recall how one member of the advisory board responded, “I don’t want to hear any more about belt-tightening.”

I’m sure he and most growers were tired about hearing more cost-cutting was necessary to increase farms’ cash flow. This was a tough period of time in agriculture, when belt-tightening was a requirement for several years.

Last year, with grain prices setting record highs, I noticed growers purchasing more nontraditional products, in order to try and pick up a few extra bushels of grain. They were more willing to experiment with new products, at a minimal cost per acre, with the hope of picking up a few extra bushels of grain.

Well, we are back to reality, with the local corn market hovering in the $3.80 to $4 per bushel range.

There are some expenses growers cannot afford to cut back on. Nitrogen is probably the best example of an input we need to provide for optimal corn yield.

I know of a grower who decided to side-dress an additional 40 pounds of nitrogen, midway through a growing season, to offset nitrogen losses from heavy spring thunderstorms. With test strips, he found the additional 40 pounds of nitrogen produced an additional 20 bushels of grain per acre. The grower got a great return on his investment in nitrogen.

We now know that 10 to 15 pounds of sulfur per acre on clay loam soils, and 20 to 25 pounds on sandy loam soils is necessary for optimum corn production. Researchers have documented corn yield responses up to 60 bushels per acre when sulfur is applied to fields deficient in sulfur.

Nitrogen and sulfur are examples of crop inputs producers need to invest in to maintain profitability.

On the other hand, growers are less likely to see consistent yield responses from products such as soil conditioners and foliar fertilizer. It’s possible, in some situations, land rents may need to be adjusted downward to levels where cash crop farmers can make a profit.

It appears the “boom” is over, and we are back to reality. So, this may be a good time to review crop budgets and trim expenses that are less likely to lead farms to profitability.

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