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Sharpen the Axe

 

Sharpen the Axe
Jon Schmitz, Agronomy Sales Manager
jschmitz@allamericancoop.com (507) 434-0016

I’ve heard a lot of talk lately around “cutting costs” as we look at the revenue prospects for 2016.  I certainly understand the need to sharpen the pencil as we face what could be a prolonged depression in the price of our commodities.  The challenge in cutting costs is determining how those cuts may affect revenue.  Some are easier than others and go right to the bottom line.  Others are not quite so black and white. 

In our Agronomy world the two main areas to look at reductions in costs would be fertilizer inputs and crop protection inputs.  From a fertility perspective some farms and fields may be able to weather a year or two without P and K applications because they have been built up over the past few years.  Very Low and low testing soils, however, will still need fertilizer applications to maximize yield.  An Iowa State University study shows that the percentage of Phosphorus or potassium applications expected on average to produce a yield increase is approximately 80% for very low soil test areas and 65% for low testing areas. 

Even at optimum soil test levels there is still a 25% chance of a yield increase with phosphorus and potassium applications.  If cuts are made on fertilizer applications for a year or two, plan to rebuild soil fertility levels when the financial picture levels out.

Another area to look at may be to fine tune nitrogen applications or take a look at some options for split nitrogen applications to maximize your return on investment.  Maximizing nitrogen efficiency is key to maximizing yield potential.  Your agronomy staff can help with some of those decisions with the information we’ve gathered from your farms and fields as well as insights that we’ve gained through some of our business partners.

Crop protection falls into three categories:  Weeds, disease, and insects.  Cutting costs in this area can open a whole new can of worms, and not the kind that we can control with insecticides. 

With the problems we have been having with weed resistance and the influx of waterhemp to our area we really need to be cautious about cutting weed control programs.  Our best recommendations generally begin with a good pre-emerge program down in front followed by some post applications for later emerging weeds.  We have established these programs because they are effective and give the best control and return on investment in combatting some of our hard to control species.  Straying too far from these base programs could affect us for years to come.

We will continue to scout for insect pressures as we have in the past and utilize proper rates as needed.  We can always hope that insect populations won’t balloon to threshold levels but need to pencil those applications into our costs as we well know the devastating effects they can have on yield. 

With disease, we will want to use all the tools in our toolbox. The biggest disease-management tool is hybrid selection.   Crop rotation can help in certain situations and we need to know the diseases present in each field and select resistant varieties.  Scouting before fungicide applications and knowing our varietal response to fungicide can help determine where we are most likely to see the biggest return on investment. 

None of these decisions are the easiest decisions to make.  But many of you have been in these positions before and know that we can’t make these decisions with haste.  A period of low commodity prices is not the time to make dramatic changes in your production practices and take risks that can cut yields.  Talk to your agronomy staff and challenge us to put together a well laid plan to help you make the best decision possible for the best Return On Investment. 

“Give me six hours to chop down a tree and I will spend the first four sharpening the axe”.    Abraham Lincoln

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