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Crop plans are more important than ever

11/03/2021

This October has presented us with unusual amounts of rain after harvest got off to a great start in September. Opportunities to harvest soybeans and plant winter wheat have been few and far between. Corn harvest has progressed at a slower pace, and almost 40% of anticipated wheat acres in our trading area will likely not be planted at this point. Increased fertilizer costs and rumours of supply issues are making it more critical than ever to manage risks. Taking a field-by-field, crop-by-crop, input-by-input approach with good agronomy and budgets will help the decision-making process.

We all know that crop rotation is good for soil health, herbicide rotation, SCN management and other benefits that can increase yield potential. If the wheat didn’t get planted, the decision to grow corn or soybeans on those acres needs consideration. Often, making a decision based on the cost of inputs may not lead to the best outcomes. The question is not so much what something like UAN may cost, but rather, is there still a profit margin or a return to my land, labour and equipment. The profit equation has two parts. Revenue and expenses, and knowing both, is the best way forward on supporting cropping decisions.

If corn acres are threatened by the cost of production, the market may present some attractive opportunities to get the corn planted next spring. Maximizing every acre, with optimum nutrition, the best hybrids, effective crop protection, and profitable market prices will be a recipe for success. Cutting back on fertilizer isn’t necessarily going to make you more money. More bushels, and higher price per bushel will. If the opportunity arises to get fall work done, the window may be short, but be prepared to roll, and keep some options open for the spring that could go to the most profitable option.

The following table illustrates the return to land, labour, and equipment using various yields and market prices. I'm sure everyone wants to know what inputs and prices were used; however, the main point to remember is that your numbers are the most important.

ReturnToLandLabourAndEquiptPerAcre_chart.png

It is more important than ever to know your cost of production, yield and profit potential to help weigh your options to make cropping decisions. It is easy to get hung up on costs and not see profits.

Get together with your crop specialist and calculate your return to land, labour and equipment, while deciding on acres and seeds required for next year. This will determine your selling price and the yields required to achieve your desired outcomes.

Prepare a plan that will allow you to be successful regardless of what challenges or opportunities come along between now and spring in these unprecedented times. A successful 2022 starts now with plans and understanding risks.

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