As growers look at 2016, many are asking, “how do we make a profit?”. There are many ways to look at the issue. A former mentor of mine taught me that with any business; P= I-E. That is; profit equals income minus expenses. Many growers look to cutting expenses in challenging times, but that may not always be the best answer. Generating more income and keeping the expenses the same, will also generate more profit.
Herbicide prices should remain at about the same levels as 2015. Fuel prices should remain at the levels that they are currently at, and fertilizer prices should remain the same or even go down some this season.
Over time, the price that growers receive for their commodities tends to remain the same. We will see highs and lows, but over the long term, prices don’t tend to fluctuate too much. The thing that growers CAN do, is to grow as many bushels as they can on the acres that they farm. That’s the advantage the grower has in this type of economy. The grower needs to think about grain as a form of currency to keep the costs in perspective. The cost per bushel of inputs hasn’t gone up very much due to the higher and higher yield levels that they are able to achieve.
So in order to grow as many bushels as possible, cutting inputs may not be as beneficial as allocating them wisely.
As an example – with fertility needs, be sure and apply the fertilizer where it will generate the most return. Variable rate recommendations and maps will help to insure that the money spent on fertilizer will be put in areas where it will be most beneficial. The most return on fertilizer is gained when putting it on the most deficient areas.
Herbicide needs aren’t going to change much this coming year, especially after the issues we saw last season. With herbicides and applications, the best thing to do is to be timely with applications and put them down correctly.
Lastly, remember that your Crop Quest Consultant is the ONLY input that can save you money!
Written by: John Hecht; Wichita, KS
Featured Image by: Jake Gard, Unsplash