Do you have your 2019 cropping plan figured out yet?” I asked an acquaintance recently.
“Well,” he said, “I have the October plan and a November plan and soon I’ll develop a December plan. Version 3.0 will probably look quite a bit different than the previous two.”
For those who ponder a wide range of cropping options, all the considerations can start to resemble a three-dimensional game of chess.
In order to do any economic analysis of one crop versus another, you need to make price assumptions. At this point, you’re predicting the price 10 to 12 months into the future. Professional market analysts often blanch when asked to make this sort of price prediction, but producers have to plug in price assumptions to perform any sort of meaningful analysis.
The only way to have any price certainty is to lock in a price on some of what you plan to produce. Even if you don’t sign a contract, the contract price provides some information on which to make assumptions. The first new crop contract prices are already circulating on a few commodities.
After price assumptions come yield assumptions. While your crop insurance average yields may seem low, it’s probably a good starting point so that comparisons between crops are equitable.
However, when you start to do the expense side of the equation it’s often difficult to know how much should be budgeted for fungicide and insecticide. Disease and insect outbreaks can be difficult to predict.
The need for weed control is more certain, but different crops provide different opportunities for herbicide layering to address the growing issues with herbicide resistance and that changes the projected expense.
Fertilizer costs can be another wild card unless you’ve already done all your soil tests and locked in your fertilizer prices.
After you have price, yield and expense numbers you’re comfortable with for each of your multiple cropping options, you can finally do the spreadsheet on relative profitability. This is where economic opportunity collides with agronomic reality.
Crop rotation looms large. If, for instance, the numbers say canola is your most profitable cropping option, will you seed canola on canola stubble? If the canola advantage is relatively small, it’s easier to go with a more sustainable crop rotation, but what if the canola advantage is large?
Herbicide residues can limit cropping choices, particularly in regions that have been drier than normal slowing the normal breakdown. Crop volunteers can sometimes create rotational issues, and fields with particular weed issues may not be the best choice for particular crops.
Then there are practical issues. Growing a number of different crops may look good on paper, but every crop switch reduces seeding and spraying efficiency. A high-yielding crop like oats may pencil out well, but too many acres might create storage capacity issues that will have to be addressed.
According to the old maxim, the early bird gets the worm and it’s true that some of the most attractive crop varieties and some of the best contracts can be missed if you don’t act quickly enough.
On the other hand, it’s good advice to look before you leap. If you leave some cropping options open until close to seeding time, you may be able to take advantage of late-emerging opportunities.
With all the considerations and variables, coming up with a viable spring seeding plan can drive you nuts.