How does your profitability compare?

I was reading through the Annual Summary for Grain Farms in 2010 from the Kentucky Farm Business Management Program. There is a set of comparisons with the lower 1/3 (LOW 1/3) and the high 1/3 (HI 1/3) in farm returns and return to management.

Farms in the LOW 1/3 tended to spend about $50/A more on all inputs. These broke out to about $20/A more for fertilizer, pesticides and seed, about $14/A more in power and equipment, about $9/A more in labor (biggest portion being unpaid labor) and about $7/A more from insurance and miscellaneous costs.

Farms in the LOW 1/3 also had lower gross farm returns (about $76/A less). Gross farm returns includes livestock, crops, tobacco, custom work, etc. Farms in the LOW 1/3 received about $64/A less in crop returns. Both yields and actual sale price of commodities contribute to this difference.

The M.A.I.N. group has looked mostly at production costs and that allows us to compare efficiencies. However, the group is missing another very large area, which is farm returns. We are reporting yields, but not actual prices for commodities. It would be very interesting to compare the numbers on farm costs (broken out for Crop Costs, Power & Equip., Building, Labor, Other) and look solely at costs per acre. But, I think it would be more useful to the group to compare actual prices received for commodities. That allows us to compare marketing skills. If someone really shines in this area, the rest can learn from it. 

Harvest Progressing

How is your harvest progressing? Respond to this blog post so we all can see what's going on.

The USDA Crop Progress Report is due out at 4:00 pm today (October 31, 2011). I'm curious to see how your personal operations compare with the USDA Report. 

Peer Advisory Groups, Some Differences

In the last post, I highlighted some of the common themes among successful groups. Now, I want to address some of the differences. The point of this is to emphasize that each group must develop their own identity and their own guidelines for operation.

Peer Advisory Groups, Common Themes

Earlier this summer, I attended a meeting on Peer Advisory Groups hosted by Danny Klinefelter at Texas A&M. Several types of Peer Advisory Groups were introduced and discussed that the meeting. All of these groups had different compositions and structures. The successful groups had some things in common. They are listed here in no specific order:

1. Time and Money: Members must contribute money and time; members have to pay a price in money and must attend the meetings in person. In addition, rotating responsibilities across the group was a good thing (for example, each meeting one person takes the notes, one person keep track of time and one person makes sure everyone is contributing, perhaps another person is in charge of food, etc.).

Commodity Classic, 2012

The 2012 Commodity Classic is in Nashville, Tennessee during March 1 - 3.

Producers from commodity groups representing corn, soybean, wheat and sorghum will be in attendance. Topics will range from production to finance to policy. The trade show will be large again.

More details about the Commodity Classic are here:

Images from the Last Meeting

The M.A.I.N. members met in Champaigne, Illinois on July 16, 2011.

Viewing soybean test plots at the University of Illinois.

Viewing test plots at the University of Illinois.

Emerson Nafziger, Univeristy of Illinois Professor, presents data from high-yield soybean tests.

Veiwing miscanthus test plots at the University of Illinois.

MAIN, Tentative Agenda for July 16, 2011

MAIN 16-Jul-11
Tentative Agenda

11:00   Welcome & Round of News [Focus on Beans: Summary of last year results and best practices, summary of this years planting (acres, number of plants/ac, planting date, N/P/K, treatments, etc,
- Comparative Slide.] MAIN Board/Chad Lee
11:15    Technical Presentation I:Emerson Nafziger
12:00   Lunch: I. Introduction of Each Person, where they farm, what they farm; II. Beans big picture talk (40 min)TBD/Possibly
Pete Goldsmith
1:30   Technical Presentation II: Seth Naeve
2:15   Break
2:30   Tour of FieldTrials & U. PlotsChad Lee
4:00   Production Practices (Comparison of Excel Files)Chad Lee
5:30   Adjourn

Super Bowl of Farming

This article talks briefly about what is needed mostly from a financial/budgeting perspective to win the Super Bowl of farming. It is short and to the point. Click here for the article. 

Long Road to Prosperity

There is an excellent article on prosperity in the DTN/Progressive Farmer by editor, Urban Lehner. It was posted on April 1, 2011.

Read it, when you get a chance.

The Future of Food: Crisis Prevention

See the linked article for an opinion about what needs to be done in the future to keep food production at pace with demand.

http://www.economist.com/node/18229412

While the author(s) attack subsidies and ethanol, they point out that more research needs to be conducted in the ag sciences. Obviously, I agree with the last point. As far as subsidies, I would argue that subsidies in some form bring about stability in the ag sector and encourages investments by banks in the form of low-interest loans, agribusiness in the form of research and development and landowners in the form of land prices. In my non-economist opinion, subsidies are merely a pass-through for the producer.

The current climate at USDA for research is focused heavily on biotech and cellulosic ethanol production. It is almost impossible to get grant dollars for research on production agriculture, unless you tack on an ethanol project or possibly a small IPM project. Yet, all the companies are telling me that they are looking for production ag people and need more expertise in this area.

I think this underscores the need for you, as producers, to conduct some applied on-farm research. Including replications and data from multiple farms will help all of you. Again, if you have interest in this area, I or others in the universities, are willing to work with you.

Glyphosate and Manganese and Plant Diseases

There have been some news articles about interactions between glyphosate and manganese (Mn). Other articles have discussed possible links between glyphosate and plant diseases.

Bob Hartzler at Iowa State does an excellent job of summarizing the current scientific research on the subject. His summary can be found at: http://www.weeds.iastate.edu/mgmt/2010/glyMndisease.pdf

As Dr. Hartzler states that one common hypothesis is that glyphosate pulls Mn out of the solution in the leaf tissue, causing a Mn deficiency. However, glyphosate does not cause yield losses in replicated trials, and subsequent foliar Mn applications do not increase yields. On the disease issue, some interactions have been documented in the greenhouse, but nothing consistent has been reported in the field. In some cases, such as Sudden Death Syndrome (SDS), soybean variety appears to be much more important than whether or not glyphosate was applied.

No doubt more research will be conducted in this area. Many scientists want to understand if and/or when interactions could occur.  While scientists continue to look at this issue, producers should select varieties and hybrids with tolerance or resistance to plant diseases. Producers who use glyphosate for weed control should also rotate or include herbicides that have other modes of action for weed control.

Feb Meeting a Success

The meeting in February was a success for most participants.  Producers discussed soils, managing different soils differently and nitrogen fertilization strategies in the morning. In the afternoon, participants discussed challenges and opportunities within their operations.

While producers were from three different states with different soil types, different climates and different crop rotations, the participants found that they had some things in common. This year, they all see an opportunity to market corn and soybean at higher commodity prices, but they all are facing higher input prices as well.

Purdue Webinar on Risk Management

 Purdue is hosting a webinar on risk management on February 25, 2011. There is no cost.
The information for the webinar is posted at: http://www.agecon.purdue.edu/commercialag/progevents/managingrisk.html

The volatility in the market, higher input prices and higher land rents should make this a timely and informative webinar. 

Best of Both Worlds

See the posting about Adrian Fay regarding farming both in Argentina and the United States.

M.A.I.N. meeting set for Feb 15, 2011

The next M.A.I.N. meeting is set for February 15, 2011 at the Holiday Inn Hurstbourne Hotel in Louisville, Kentucky.

Producers from Indiana, Illinois, Iowa and Kentucky are expected to attend. Two guest speakers will discuss topics related to soils management.

The meeting starts at 9:00 AM (Eastern Time) with a brief introduction by Adrian Fay. Each producer in attendance will have the opportunity to introduce themselves, where they farm and what they farm. Those will be followed by the presentations on soil management. After lunch, producers will discuss economics and inputs.

Click here for the agenda.