BLOOMINGTON, Ill. — The downturn in corn and soybean prices as yield estimates rise highlights the importance of soil fertility and improved efficiency.

“There is a common debate among farmers whether increased bushels are more important when commodity prices are high as compared to when they are low,” said Dave Mowers, AIM for the Heartland consulting agronomist.

“Both are important, but my contention is that increased production is more important when commodity prices are low.”

His belief is when prices are lower, margins also generally are lower, and the percentage impact of higher production is greater when margins are lower than when they are higher.

“No matter what, higher production is necessary in order for farmers to remain competitive, no matter what the market price is,” he said.

Net income is more challenging with lower commodity prices, and increasing production while keeping input costs down helps turn a profit.

“One of the challenges is that costs of inputs and land are going down slower than grain prices. Therefore, profitability is much more of a challenge, and it does not look like it will soon get better,” Mowers said.

The Catch-22 in this is cutting the cost of inputs to save money also costs yield.

During the past few years of high corn and soybean prices, farmers found there were certain management practices that increased yields while other practices did not.

Cut Costs Cautiously

“Remember what worked and use those practices to keep production high. Don’t cut costs just to reduce cost per acre --it can come back to haunt you,” Mowers said.

The first step in any farm management program to manage input costs is to do soil tests to monitor nutrient levels. If the levels are low, add extra nutrients to increase production. If the levels are high, reduce nutrient applications rates.

“You don’t want to cost yield, but virtually every soil test will find some surplus and some deficiency,” Mowers said.

“The idea is to reduce inputs on high-testing areas and increase inputs on low-testing areas, with the effort to get maximum production with the most economical rate of inputs on every acre that is farmed.

“We have all watched the price collapse, and it is easy to kick yourself for not taking advantage of higher prices at an earlier time. You cannot do anything about the past, so give it a rest.

“Let’s think ahead and get a plan.”


Tom C. Doran can be reached at 309-828-1432 or tdoran@agrinews-pubs.com. Follow him on Twitter at AgNews_Doran.