Investment Mindset Helps Maximize Farm Profits
Of course, knowing the big picture is necessary, but truly forward-thinking growers pay acute attention to the details in every field, optimizing agronomics to produce more bushels. They rely on trusted advisers who challenge their thinking and expand their farm strategy.
A focus on profit is driving agronomic decisions in 2021. According to Mark Callender, farm manager at Farmers National Company in Dighton, Kansas, optimistic growers have shifted from saving to spending to drive profits higher on good land.
We do an annual investment analysis on all of our farms to see both cost per acre and cost per bushel. By comparing production numbers with seed, fertilizer, weed control and other input costs factored in, our operators learn the return on investment for quality products versus generics, for example.
Callender encourages deep dives into the cost of inputs every year, an especially important step for growers beginning their 2022 plans. “We do an annual investment analysis on all of our farms to see both cost per acre and cost per bushel,” he says. “By comparing production numbers with seed, fertilizer, weed control and other input costs factored in, our operators learn the return on investment for quality products versus generics, for example.”
Callender says farmers do a good job knowing their break-even costs, and the site-specific data available today provides them better insight into their individual fields. “Top producers will spend more money if they can achieve better weed control to drive top yields. By examining such costs on a per-bushel basis, they can justify higher costs per acre when an agronomic practice delivers more bushels.”
Preparing for 2022
Ag economists are anticipating that net farm income for 2021 and 2022 could offer the strongest earning potential since 2012.
In April, when Corn Belt acres were planted, the futures price for May corn broke the $6 mark. “U.S. stocks-to-use ratios at that time were so low for corn (9.2%) and soybeans (2.6%) that it will take time to rebuild corn to the 15% to 17% range and soybeans to the 10% to 12% range,” says Lynn Sandlin, ag economist and business intelligence lead for Syngenta. “Combined with increasing U.S. exports and drought issues around the globe, these conditions provide a real opportunity for gains over the next few years for growers who maximize their revenue based on productivity at the bushel level per field.”
“We understand the last six or seven years of depressed prices pushed some growers to try to save their way to prosperity with cheaper inputs and generics,” says Paul Backman, commercial unit head for the West Heartland region at Syngenta. “Our Syngenta AgriEdge® whole-farm management program helps growers flip that thinking and understand how better products can deliver higher productivity on a cost-per-bushel level.”
Thinking through 2021 input decisions and measuring them against yield provides valuable data. Backman says factoring in yield loss from inputs helps growers understand actual costs and shift from a cost mindset to an investment mindset.
Many producers think about their budget per acre for the whole operation, Sandlin notes. “But there’s an opportunity, especially during more profitable times, to budget directly at the field level and maximize profit potential at the bushel level.”
Sometimes it requires better tools, sound advice, a shift in thinking, or all of the above to manage each field’s potential at the bushel level. “Whether they use spreadsheets or other tools, trusted advisers can help growers increase field productivity with an eye on profit per bushel,” Sandlin says.
Retailer Trusts Agronomics Over Bundles
Syngenta sales representative Mark Dozler uses a fungicide analogy to illustrate the input-cost- per-bushel method of thinking. “I worked with an agronomic-focused retailer in Nebraska to build an input-cost-value spreadsheet. It shows that if a grower removes a $30 fungicide application from their plan, their cost per bushel increases. That’s because removing that fungicide reduces yield, using a conservative estimate, by 10 bushels per acre,” he says. “The agronomic data proving that was really eye-opening to growers.”
Given the many different herbicide programs, defining more yield for weed control really challenges everyday thinking. It requires digging into details beyond a $40 to $50 per acre herbicide budget.
Field-by-Field Profit Plans
Today, more growers are tracking the productivity and profitability of their crop plan by field with the AgriEdge tool.
“Retailers play vital roles across all farm input decisions,” Backman says. “To complement this integration, our sales reps and AgriEdge specialists help growers see the small gains in each field that add up to more bushels. A good management plan evolves as more agronomic and economic data help drive greater field-by-field profits.”
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Technical advancements in corn and soybean genetics and traits also play a critical role in overall productivity per field and cost per bushel. “Many retailers take pride in knowing research and agronomic details so they can recommend the best hybrid for each field,” says Brent Rockers, a Syngenta district manager for parts of Missouri, Kansas and Oklahoma.
By walking fields, sales reps and retailers gain more data to help customers manage more bushels from hybrids. “We rely heavily on our research to provide growers with seeding rates, fertility and plant health advice that improve their ability to strategize and budget,” Rockers says. “Our Cropwise™ Seed Selector tool provides growers with an initial list of hybrids that match their soil classifications by field. Not only can advisers sit down with growers to fine-tune the selections and agronomics, but those advisers can also follow the crop through harvest and use the data to build better profitability for the future.”