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Senior Advisor

Where To Save $100 Per Acre

The University of Illinois has a paper out discussing where some farmers may try to cut costs for 2016.

It's obvious that cash rent has increased a lot and is a prime target for reductions.  Where do you look if landlords won't talk?

 

Lower machinery costs will lower depreciation over time.

Seed costs could be inspected to see if a cheaper hybrid or lower seeding rate will work.

Pesticides might get attention, especiallly fungicide

Fertilizer can be cut but may have to be paid back later

Drying costs aren't all that high

Crop insurance might save a few bucks an acre

 

All of us will look across the board, but no matter how you slice it, cash rents are going to havve to come down.  

 

Here is the article, well worth reading.

 

http://farmdocdaily.illinois.edu/2015/09/cutting-100-per-acre-in-costs-corn-soybeans.html

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10 Replies
Veteran Advisor

Re: Where To Save $100 Per Acre

Years ago in the last "bad cycle" I was asked to
Write an article on the subject.

Rather than rehash, one thing, in my opinion, that sticks out is fertilizer, or I should say the form.
I know you love your liquid, it is easy to use, but
In these parts, there is 50 cents per pound p between
Dry and liquid...you put on 40# phos, you save $20.
That is mighty hard to overlook in my opinion
More later
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Veteran Advisor

Re: Where To Save $100 Per Acre

Another suggestion i will make is that you consider allowing hunting. I know of two national companies that are in the business. Some states have hunting programs, but the payment levels are lower, and you can not decide who hunts, and not limit. we got into that for a while, and basicly one group would come in, then another than another than another, they basicly wiped everything out. With the private, you limit how many people, and you have final say if they lease or not. if you don't like the way they comb their hair, you can say no. usually, the lease runs from $5 to $10 and acre, really prime might push $15 an acre, usually the company gets 10% i know this can be a mixed subject, but just look at it this way, if you had 500 acres, and get $10 an acre, and you limit the people and the number, that's about $4500 a year.......nice help on the taxes, or electric and propane bills (at least they will not be big this year with $1 propane), or help on the medical insurance, or help make the pickup payment, or the wife's mini van to haul the kids around in. I know it's not easy to do it, you want only yourself and family and friends....but in some contracts, something can be worked out.
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Honored Advisor

Re: Where To Save $100 Per Acre

If bankers are saying to trim $100, the elephant in the room is rents, especially if they weren`t lowered last year. 

 

Some are going to produce like John Henry right up until the banker closes their bar tab and takes their car keys. And who knows, perhaps this is a saucer bottom and in a year or two we`ll be back to $6 corn again...I don`t think so, but could happen. 

 

This year surprised me I thought more would cut the frivolous fungicide treatments, highboy sidedressing and elite hybrids, but some really went for it and if there was to have been a turn around in grain prices they weren`t going to be the only one in the neighborhood raising a sub-250 bushel crop.

 

It looks next year will be different with what appears will be a much lower crop revenue assurance guarantee and fewer chances to lock in near what in the past we considered a breakeven price. 

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Veteran Advisor

Re: Where To Save $100 Per Acre

Conventional seed corn...$126/bag vs triple stack at $245.....close to $50 per acre right there.

 

Fertilizer...buy or fix up a cart....take your semi to a wholesale seller....spread it yourself....save $20 per acre and don't skimp on nutrients.

 

Chemicals...go with old veterans....save $10 per acre...Maybe get out the cultivator, too, with cheap diesel and no weed yet is resistant to iron.

 

Crop Ins....go with enterpise units ...save $10 per acre .

 

Equipment...trade off with the neighbor on some things you have extra capacity in.....don't buy new toys...fix up what you have...save $10 per acre.

 

This gets you to the $100 per acre BEFORE you squeeze the landlord. And if you are your own landlord, you don't have to squeeze yourself.

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Senior Contributor

Re: Where To Save $100 Per Acre

Why wait until tough times to look for savings? If that strategy makes you more efficient, why not adopt it all the time?

Veteran Advisor

Re: Where To Save $100 Per Acre

who said that I don't do all of that already? Just trying to help out my fellow farmers.....instead of waiting for "the government" to do it.

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Honored Advisor

Re: Where To Save $100 Per Acre

Just don't see the government doing it this time......

We see the rest of the world developing.  CME has moved on to broker the worlds grains.  We can buy our needs on the world market.

Why should we work hard and over produce just to have to store it?

Smiley Happy

 

I just don't see the mentality that ---- one more time----- says "the US needs a strong agriculture sector"

 

Don't think the government will do it,,,, probably won't even admit we need the farm jobs...

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Veteran Advisor

Re: Where To Save $100 Per Acre

well, SW, some look at government as a necessary evil, to do things that would not get done without common sharing, and others just look to the government. You know what I am talking about.

 

I do think that hard times force people to look at what the efficiencies are , and to adapt or get out. I cut my teeth in the 80's and still have the mentality that the wolf is not all that far from the door, no matter how much progress I make.

 

THe USA HAS a strong Ag sector, and hopefully we will not get a big enough dose of socialism to weaken it. Trimming the government programs was probably something that Reagan should have followed through on in the 80's, and during times of budget cutting, like we are going through now, Ag certainly has to accept its share of cuts.

 

My two cents.

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Honored Advisor

Re: Where To Save $100 Per Acre

I agree,,,, but we have folks in power who think organic farming and gardening can feed 350 million people and fuel their cars.....

I don't think that "assumed" wisdom will go away without a test.

 

,,,,,,,,and, but, ..... the profit motive that stimulates production the last 4 years is rare in my 60+ years.  Most of the years since the 1920's we have needed an public incentive to maintain production at surplus levels, guaranteeing a reasonable cost of living in our country.  

 

Government is important and needs to lead and stop selling favors.

 

Red your 2 cents are the best value on the web site.... always appreciated..

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