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Foresight for Successful Cropping Systems: Make 2003 a More Profitable Year By Zachary Fore, U of M Extension Cropping Systems Specialist, forex002@umn.edu “There are few things so good they cannot be improved.” Your farm probably falls in this category. “There are few so wise they cannot learn.” All of us fall in this category.
Next, look at the list of things you did that worked well. Are they management practices you can incorporate into the way you farm? Or, are they things that were just lucky or unusual – things that you can’t control, or don’t want to incorporate into the way you farm. Here are a few examples of things that may have worked well: 1. I scouted my wheat fields for disease and applied fungicide only where variety, crop condition, and weather justified it. 2. My most profitable field was where I got hail, collected insurance, then harvested part of a crop. 3. My highest yielding soybeans were the ones I planted in early June. In reviewing this list, item #1 is a practice that you may want to incorporate into your operation. Item #2, hail, is an unusual event that you can’t control, but this may indicate that you want to continue to take out hail insurance. Item #3 is probably just a lucky outcome. Best yields usually don’t come from late planting, and late planting significantly increases the chances of losses due to late season frost. You wouldn’t want to make late planting of soybeans a standard practice. Now evaluate the list of things that didn’t go well. Here are some examples: 1. The spring was wet and my wheat was planted two weeks later than optimum. 2. I planted a reduced rate of soybeans on some fields to save on seed costs. These fields seemed to yield less. 3. I had soil loss and ditches fill in due to wind erosion. 4. I contracted a third of my crop early at a price that seemed very good at the time. However, prices went up and I would have been better off to sell it all at harvest. Can you implement management practices to overcome these problems? Would surface and/or tile drainage address item #1? For item #2, would it be a better idea to pay the extra seed cost and plant a full rate? Could residue and tillage management alleviate erosion in item #3? Was the price change in item #4 anything that could have been predicted with any degree of consistency? Marketing is an area where the potential for second guessing is immense. Item #4 may suggest that it is better not to contract ahead, but to sell at harvest. However, long term data indicates that prices at harvest tend to be the lowest. This is good example of a strategy that didn’t work well this year, but that you wouldn’t necessarily want to change in the future. I believe that this yearly assessment of what is working and what isn’t is critically important. Why? Because I believe that future success of most farms is a matter of doing a lot of small things a little better each year, not doing a few big things a lot better. Agriculture is a very competitive business. Although we have recently seen some higher commodity prices, it is unlikely these higher prices will be sustained over the long-term. Richard D. Taylor, Won W. Koo, and Andrew L. Swenson, Ag. Economists at NDSU, recently published an article titled “2002 North Dakota Agricultural Outlook: Representative Farms, 2002-2011.” (You can get the article at this web address: http://agecon.lib.umn.edu/cgi-bin/detailview.pl?paperid=5290 ). Looking far into the future is an uncertain business, but these economists use past price and yield trends and the new farm program to estimate farm profitability up to 2011. Their conclusion is that, on the average, net farm income will decrease, and debt-to-asset ratios will increase for farms of all size and profitability categories. The good news is that there is opportunity to continually improve and to be better than average. A key part of beating the odds is to do a yearly, in-depth farm assessment. Learn from what’s working and what isn’t. Then, make the needed changes. Two Farm Planning Resources On The Web “A Strategic Management Primer for Farmers,” by Kent Olson, University of Minnesota http://agecon.lib.umn.edu/cgi-bin/pdf_view.pl?paperid=3836&ftype=.pdf |
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With the 2002 crop year behind us, it is time to reflect,
learn, and determine how to make 2003 a more successful and profitable year. During and immediately after harvest, while observations made on the combine are fresh in your mind, is the best time to assess your
operation. What did you do in 2002 that worked well? What didn’t work well? What did other farmers do that did or did not work well? Write down all your
observations. (It is important that you physically write down your observations on real paper, perhaps a journal that you can refer to yearly).