Cutting crop inputs without cutting the crop output

Harvest is done, and now it’s time to start planning for next year.

The first task should be to revise this year’s crop plan with actual costs as compared to the estimated costs and expected selling prices entered last winter.

This will give farmers a much better idea as to the financial outcome of 2015 and a clear picture of what crops made them money and which ones didn’t.

If they are so lucky as to have field by field or even farm by farm data, so much the better.

What’s the bottom line? In most cases, probably not as good as the previous year.

It is obvious that the latest round of high commodity prices has come and gone, part of the never-ending cycle of farming. Your father might have called it “boom and bust,” but today it’s more like “boom and survive.”

The initial response when looking at this year’s crop plan is, “I’ve got to cut back on expenses.”

This might be true, but a surgical approach should be considered.

The first thing to do is to find cuts that cause the least damage to the bottom line. Consider postponing big machinery investments.

Another way to save money is on seed.

Good early order seed programs are available, so take advantage of them and look at the second tier varieties or hybrids. These products will perform well if their features fit your needs.

As well, take a look at your stored seed. Do you have inventory that can be cleaned rather than buying new seed? Can you stretch the purchase of certified seed one more year? Weigh this against the cost of pedigreed seed, realizing that the price have come down from last year.

Fertilizer is one of the first places many growers look at when choosing expenses to cut. This is probably because of the size of the expense.

And of course, the largest expense when it comes to fertilizer is nitrogen. However, before cutting the nitrogen rate, take a deep breath and step back. This is the place you definitely should not, in most cases, cut.

Nitrogen is the input that has the greatest impact on yield and the bottom line. In fact, one can argue that a reduction in nitrogen makes all the other inputs cost more.

For example, let’s use trial data for the black soil zone in east-central Saskatchewan and western Manitoba. Reducing nitrogen application to 90 pounds from 100 costs three bushels in yield. At $5.50 per bu. of wheat, this equates to $16.50 in lost revenue but a savings of $7 in fertilizer at 70 cents per lb. ($710 per tonne) urea.

But let’s look at all the other costs.

In this example, we have reduced the overall yield by seven percent: to 42 bu. per acre from 45. On a per bushel cost, all other expenses have just risen seven percent.

Variable rate nitrogen application is a way to make more efficient use of the nitrogen dollar.

It will be necessary to invest in a variable-rate controller, and it costs to get a prescription, but these costs have come down considerably in the past couple of years.

Implementing a variable rate nitrogen program requires monitoring nitrogen loss from the soil and calculating the soil’s supplying power. This means monitoring the weather, taking soil nitrate tests and testing the soil for mineralizable nitrogen. Look for providers that take these factors into consideration.

There are ways to use a scalpel on your fertilizer costs.

First, conduct a five-year input-export report on phosphorus and potassium, which are stable nutrients in the soil. This report subtracts removal rates from the applied rates, which will provide a good idea of where you sit.

A positive number of more than 25 for a five year period means you may be able to shave five lb. from your application rates. A steady increase in soil test levels will verify this.

Which leads us to the fact that soil testing is still the best way to verify the needs of next year’s crop. It is an expense that will increase the bottom line, whether you go with a composite field strategy or a more precise zone based program.

You may also be able to cut back on other fertilizer products.

Some of the starter or primer products on the market today may show yield responses in some conditions, but generally they have been shown to provide little or no yield benefit. A study undertaken by the Indian Head Agricultural Research Foundation and repeated at four Saskatchewan locations in 2010 and 2011 showed no yield benefit to any of the seed treatments or primers.

“While relatively inexpensive compared with many crop inputs, the results of this study on their own would not justify a recommendation to use micronutrient seed dressings, even in cases where soil tests show potential for the applicable nutrients to be limiting,” said lead researcher Chris Holzapfel.

Westco obtained similar results in the 1990s. A multi-micronutrient blend was applied to 17 sites across Western Canada without regard to soil test results. A significant yield response was found in only one of the sites.

When it comes to weed control, you probably have a pretty good handle on what weeds you’re faced with, and your present program is probably working well. Depending on the spring, there may be some opportunities for spot spraying of weeds that may save money compared to a blanket application. Just remember to rotate herbicide groups to avoid resistance.

When it comes to insect problems, you should increase scouting and base treatments on areas where insect populations warrant. You can easily pay for a scout by eliminating one spray application on one field.

The same can apply to fungicides. Hundreds of thousands of dollars are still being spent on half-rate fungicides on cereals. Research has shown that this practice is at best only break even.

Scouting and the application of fungicides at the proper time will save money and get a bigger bang for the buck.

And finally, remember to avoid the temptation to farm out of the rear view mirror. Things that occurred on your farm or appeared to work for your neighbour last year may not work this year.

Unlike Albert Einstein’s definition of insanity — “doing the same thing over and over and expecting a different result” — we expect to and usually see a different result.

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