The Importance of a Crop Budget
I’m Will Mullenix. I’m a Grower Advisor with Growers Axis® based in Iowa.
Perhaps you’re wondering, why would I need a Grower Advisor? I get advice from my vendors when I buy seed or fertilizer or chemistry.
Our Growers Axis® founder, Dave Handsaker, had lived through a drastic change in the hog industry.
At one point in time, hog producers got advice from the vendors they bought feed inputs from. But the price of hogs fell through the floor. And the challenge was when profits evaporated, the companies providing inputs to hog producers cut their staff. The people disappeared too. So those few individuals that provided high-quality advice sold consulting to hog producers, which enabled them to turn around, take the advice and buy their inputs wherever they could get them cheapest. We think the same thing could happen in commercial agriculture as well.
Grower Advisors Work for You
What, as a Grower Advisor, what do I do?
Well, I work for you, for the producer. I’ve got 30 years of experience in agronomy. And now, at this point in my career, I put it to work on the farm for you. So, providing unbiased input and advice on inputs for all aspects of production agriculture, that’s what I do.
And how are we different?
You get advice today from the vendors you buy from. Well, I think I said it already, but the difference is we’re unbiased. So, it doesn’t matter to me what bag, or logo on your bag of seed you buy or where you buy your fertilizer. I just want you to make the best decision that you can to increase your profitability.
How a Crop Budget Increases ROI
So how do we get started?
In this video, I want to talk to you about how to build a crop budget and how to understand and determine your cost of production per field. And why does this matter? Well, we’re feeling it today, as the margins on corn and soybean production get squeezed or even eliminated. You can’t make a good marketing decision unless you understand your cost of production. And maybe you can calculate it across your whole farm, but you really need to do it by field. So that’s what I do. I want to help you make better decisions. And so, we get started by building a better plan.
Know Your Cost of Production
Why does it matter to know your cost of production per field?
And who’s really interested in that information?
Financing Availability is Changing
Well, your banker is really interested in that information. So, in the same way, or at the same time that margins of profit are being squeezed in corn and soybean production, financing availability is changing too.
So, how do you make crop input decisions? Do you decide on your fertilizer rates because that’s the way you’ve always done it?
Or maybe, are you in a situation where your lender is putting a limit on dollars per acre that you can spend on fertilizer?
Complete Plans Maximize Yield
Either way, you may have an incomplete plan that doesn’t set you up to maximize yield.
We Start Planning in August
How soon do you start planning for the next crop year?
As Grower Advisors, we like start planning in August for the next year’s crop season. There are a lot of decisions to make. And the timing of these can set you up for success. Or, if it’s mistimed, set you up for failure.
Ask Yourself These Questions
What’s the liming history of your fields? Or is liming been neglected?
How recent are your soil samples?
If you have fields that are due to be sampled this fall, is that being addressed in your harvest order? For example, if you know you need to soil sample a set of farms and then do tillage on them before you apply fertilizer, harvesting those first can set you up for success and avoid speed bumps in the timeline of activities you need to get done this fall.
Have you VRT variable rate applied P, K, or lime in the past? And if so, what was the result?
Did your fertility levels change? Was there an effect to your yields? Understanding this is an important part of our service as we work together on your operation.
Do you use your yield data to make your fertilizer recs? Soil test data is important. And that’s one way to make a rec. But using yield can make your recommendations and the application of your fertilizer more efficient and more specific, driving higher return on investment for those large percent of dollars that you spend.
Start with the End in Mind
So, we like to start with the end in mind.
Begin planning in August for what’s going to take you 12 months to produce that crop.
Are there situations where you get to May, June, and July of the crop production year, and you’re out of funds? So, you don’t have dollars available for additional inputs that could drive your yield potential?
Can Your Plan Adapt to Conditions?
Whether it’s fungicide or side-dress nitrogen, conditions change during the growing season, can your management plan change with it? And do you have dollars allocated and available late in the season to invest?
These are all results of a well laid out plan that begins early and is comprehensive.
There are a lot of variables involved in making a plan for a crop each year, and the timing is especially important to deliver a high yield using all the variables.
So, let me leave you with a question.
If it was possible to build a plan for your crop, while saving 5 to 10% on input costs, and at the same time maintaining or even increasing your yield potential, would that be worth time for a conversation?
Give me a call, Will Mullenix 309-824-1755.
I’d love to work together with you to build that plan for your farm.
If you want more information, go to our website, Growers Axis®.com, under Insights. We have other informative videos about different aspects of our service.
Thank you for listening today, and good luck in the next growing season.