2018 Survival Guide
Like most producers these days, Sam Dove, who grows corn, soybeans and wheat on 2,000 acres near Green Ridge, Mo., is keeping a wary eye on the current state of the agricultural economy. After all, this first-generation row-crop farmer has a lot at stake.
Dove has worked hard to build his farm from scratch, starting near the end of the farm crisis in the late 1980s. When he and wife, Nancey, married in 1990, he was farming around 300 acres while working three jobs to make ends meet. The most recent down-cycle isn’t the family’s first experience with belt-tightening times, and they know it won’t be the last. But the Doves also know they’d like the operation to be around for the next generation if their sons—Ryan and Logan—and daughters—Libby and Emily—choose to farm.
“The ’80s, when I was trying to get started, were terrible,” Dove said. “Banks wouldn’t even loan money to established farmers, much less young farmers trying to get started. I did whatever I could to pay the bills and kept picking up acreage here and there. All through the years, there have been cycles, both up and down. We had some good years recently, but grain prices are down now, and we’re feeling that like everyone else. But hopefully, they’ll rebound.”
The irony is that for Dove and many of his fellow farmers in MFA country, 2017 was a great growing year. Yields came in well above average in most places, with corn reaching 200-plus bushels per acre and soybeans pushing 55 to 65 bushels, according to MFA Incorporated Senior Staff Agronomist Jason Worthington. Such positive production tends to push prices downward, and many agricultural experts, including CoBank’s Tanner Ehmke, believe that U.S. farmers will continue to struggle to generate net income in 2018—the fourth year in a row of a weakened farm economy.
“USDA predicts net farm incomes will be up slightly in 2017, thanks mostly to improved profitability in the livestock sector,” said Ehmke, senior economist at CoBank, a $126-billion cooperative bank serving rural America. “Unless market prices for corn and soybeans post significant increases—which is highly unlikely given current commodities surpluses—then farm profitability likely will remain flat in 2018.”
Despite record exports in 2017, expanding production in both crop and livestock sectors as well as large carryover grain stocks make it difficult to be bullish on improvements in farm profitability anytime soon, Ehmke continued. The good news, however, is that “we’ve likely reached bottom” in commodity prices, he said.
“Unless there’s a significant weather-induced supply shock somewhere around the world, prices will continue trading in a fairly sideways pattern,” Ehmke predicted. “Otherwise, net farm income will be in the hands of the farmer and his ability control costs, increase yield and take advantage of brief market rallies.”
To help his farm survive the economic downturn, Dove says he watches expenses and looks for efficiencies, practices and services that will not only save him time and money but also maximize production.
He’s purchased add-on GPS-based equipment for his planters and combine and uses precision agronomy and application services, including MFA’s Nutri-Track program. Dove started by having his soil grid-sampled by MFA Agri Services in Sedalia, and four years ago the farmer began applying nutrients and chemicals at variable rates.
“It all adds up, and my investment has paid off,” Dove said. “There so much soil diversity here. I’ve seen yield even out on my fields since I started using precision tools. It also helps me be more efficient with inputs like fertilizer because I’m only applying what’s needed, where it’s needed. Same thing with seed. I have automatic row shutoffs on my planter to prevent overlap.”
“The equipment also helps with record-keeping,” he added. “I can track seed varieties and planting dates, adding info such as when and where I side-dress corn, and plug in yield information.”
Blaine Beissenherz, MFA agronomist and crop consultant, helps interpret soil samples for Dove and scouts his fields enrolled in the Crop-Trak program. With this program, Beissenherz evaluates fields after plants emerge to take counts and determine if replanting is needed. As the growing season progresses, he checks fields weekly for signs of disease, insects and weed pressure and provides recommendations to Dove on how to address issues.
“We work with Sam to develop a four-year plan to build nutrients in the soil,” Beissenherz said. “We go over cropping plans with him each winter to make sure we are making the best decisions for the given fields and we are on the same page for timing of applications during the growing season.”
In addition, Dove uses treated seeds, purchases crop insurance and hires grain marketing experts—all investments that help protect his farm profitability. Planting cover crops has also helped improve yields, weed control and erosion.
“Year in, year out, we find that cover crops are good for the soil,” he said, “and taking care of the ground just makes good sense.”
Mike Catron, operations supervisor at MFA Agri Services, says that Dove is a good farmer and “progressive in adopting new technology.” Dove deflects that praise and credits his partnership with MFA for helping him along the way.
“A lot of guys do more than I do with precision tools,” Dove said. “I focus on planting and harvesting, and depend on MFA to do most of the agronomy and application. MFA has been good to work with.”
The practices Dove employs on his farm are among those recommended by the ag experts we interviewed for this “Survival Guide.” Here are 10 ways producers can improve efficiencies, profitability and performance on the farm in today’s challenging environment.
1. Cut costs. It’s crucial to work with your accountant to analyze your cost of production and fix inefficient farm practices, CoBank’s Ehmke emphasized. “History tells us the low-cost producer wins,” he said. For example, if you can buy used machinery or delay the replacement of your current machinery line, that’s an easy win on lowering cost. Also, consider negotiating to cut rent and financing costs.
2. Increase yield. Increasing yield is the fastest way to lower your per-bushel breakeven cost of production, Ehmke said. “I’m not a fan of cutting corners on yield-enhancing technologies like traited seed or crop protection.”
3. Advance your marketing plan. Work with a market advisor to develop and execute a marketing plan based on your cost of production. “The market almost always provides an opportunity to sell at a profit, so it comes down to a farmer’s willingness to let go of commodities,” Ehmke said. “That’s often an emotional rollercoaster. If you’re good at farming and growing crops and livestock, focus on that.” He added that it may be a good idea to put someone else in charge of executing the marketing plan, such as a spouse or other family member.
4. Purchase crop insurance. The crop insurance safety net helps assure that you can survive to farm another year in the event of a catastrophe, said Mike Smith, MFA Crop Insurance principal agent, who oversees MFA’s crop insurance program launched in 2017. In addition, you can use crop insurance products to place floors on market prices for grain and livestock. To learn more, including sign-up deadlines, talk with your local MFA crop insurance agent or visit www.mfa-inc.com/Services/MFA-Crop-Insurance.
5. Ensure proper field fertility. Every time you harvest, you remove nutrients from the soil, and recent high yields especially hammered fertility levels, said Thad Becker, MFA precision agronomy manager. “Proper fertility plays an essential role in reaching full yield potential across the field and from year to year,” he said. “A field with good soil test levels better handles adverse conditions.” According Becker, 25 percent of MFA producers have adopted technology that combines soil testing with precision nutrient application, and the trend continues to grow. Although knowing an average yield can allow agronomists to estimate the level of nutrient removal, yield monitors allow for more accurate measurement. “We can combine the data with soil tests to recommend the best nutrient replacement plan,” Becker added.
6. Precision plant. Whether you’re planting, applying nutrients and chemicals or monitoring yield, you don’t need to purchase brand-new machinery to improve accuracy, Becker said. “This is especially true of planters,” he explained. “With add-on aftermarket products from AgLeader, Precision Planting and others, as long as the planter’s frame remains in good shape, you can rebuild a 30-year-old planter to make the most efficient use of seed. More accurate seed placement boosts yield, and you save costs by reducing overlap.” Row shutoffs on your planter generate some of the fastest payback, Becker added.
7. Choose the right seed. Today, seed represents some of the most innovative technology and profitability opportunities available, MFA’s Worthington said. Every year, new hybrids and varieties provide greater yield and more protection from the environment. MFA crop specialists can help producers navigate those choices and make the right decisions for their soil type and disease risk. Seed treatments also add protection against disease threats, he said.
8. Hire expert agronomists. Working with crop scouts and consultants can help growers identify areas where inputs can be used most effectively and profitably. MFA’s Crop-Trak program takes those services to the next level, said Worthington. “We go beyond normal field inspections to evaluate stands as well as weed, insect and disease pressure,” he explained. “Proper timing of nutrient and chemical applications makes a huge impact on crop performance. Too often, poor product selection takes all the credit or blame when, actually, proper timing of herbicides, for example, can often be the difference between a clean field and a disaster.”
9. Improve cattle health and feed efficiency. Disease and death losses in livestock production are expensive. Preconditioning programs such as MFA Health Track can help build immunity through timely vaccination, high-quality nutrition and parasite control. It also reduces sale-day shrink and helps eliminate discounts that can accompany unweaned calves. “When you combine today’s lower feed prices with feed efficiency provided by MFA Health Track, your cost of gain can run below 60 cents a pound,” said Mike John, MFA director of Health Track. In addition, feeds and supplements with MFA’s proprietary Shield Technology can improve livestock health and performance with less dependence on antibiotics. “Shield and Shield Plus have shown benefits such as improved feed efficiency, daily gain, immunity and rumen function,” said Mike Spidle, MFA director of product sales and feed. “Shield Technology leads to fewer open cows, more full-term pregnancies and newborns that get up faster. Dairy cows produce more milk in summer with more protein and butterfat. Swine producers see more pigs per litter, and some have cut back 80 to 100 percent on antibiotics.”
10. Keep better records. Whether you’re growing crops, raising cattle or doing both, record-keeping is an essential tool on the farm. “You can’t manage what you can’t measure,” said John. MFA offers tools to make record-keeping more convenient and useful. For example, MFA’s PowerCalf app allows producers to record data in the field on a mobile device—even without wifi or cell service—including breeding, pregnancy checks, weaning and preconditioning information. “You can sort, edit and analyze the data, including profitability measures such as pounds weaned per cow,” John explained. “The analysis helps you improve conception, calving and weaning rates and stay ahead of the competition via benchmarking tools.” For row-crop producers, MFA’s Nutri-Track web portal provides access to all the information agronomists gather on producers’ farms, such as GPS-based soil test results along with nutrient recommendations. “If you provide planting and yield-monitoring information, we can organize and display that as well,” Becker said.
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