Helping farmers do things right when margins are tight
MNCCA Column for The Farmer
By Curt Burns
We’re heading into a lean period in crop profitability. After several years of strong returns, margins in 2015 will be tight. Many crop farms could lose money if corn and soybean prices don’t rebound.
How will you adjust your operation for lower commodity prices? One of your best resources is a professional crop consultant.
Certified crop advisers, or CCAs, offer informed and independent advice on the decisions that affect profitability, including fertility, variety selection, seeding rates, crop protection, integrated pest management, and precision farming.
Good crop consultants get to know your entire operation very well, so they “understand a farmer’s needs and capabilities,” says Bruce Potter, a University of Minnesota Extension Integrated Pest Management specialist, and an adviser to the Minnesota Independent Crop Consultants Association. “They can help you allocate resources when times are good and protect yourself when times are tight.”
As crop production becomes more complex and technically challenging, a certified crop adviser can also keep you abreast of the latest research, innovations, and technology.
Even as agriculture moves into a down cycle, the fee you pay for a CCA can put more dollars on your bottom line by helping you determine which production practices generate the most value.
Profit margins shrinking
Returns in 2015 will be squeezed from both the revenue and expense sides. “Costs will go up a little, but the biggest difference is revenue decline,” says David Bau, University of Minnesota Extension Ag Business Management educator.
In southwest Minnesota, for example, Bau projects 2015 corn revenues of $695/acre — down $115 from 2014. At the same time, corn production expenses — not including land rent — are projected to rise by $36/acre to $684/acre.
Soybean revenues are projected to drop $22/acre, to $530/acre. Soybean production expenses are also projected to decrease — but not as much as revenue — falling $9/acre, to $351/acre.
These estimates are based on 180 bushel-per-acre corn at $3.50/bu., and 50 bushel-per-acre soybeans at $10.00/bu. In this scenario, net returns to corn could plunge by about 90% compared to last year, while net returns to soybeans could slip about 7%, Bau projects.
Meanwhile, “sticky” cash rents are retreating more slowly than commodity values. “They won’t go down enough to offset revenue declines,” Bau says.
In this challenging economic environment, farmers need to scrutinize every expenditure. With $7 corn and $13 soybeans, there was room to experiment with extra inputs that didn’t always pay. In 2015, we don’t have that luxury. Certified crop consultants can help you determine which products will provide a return, and which you can do without.
CCAs make recommendations based on reputable, scientifically-valid, independent research. We are not out to sell you a product, and this independence sets us apart from folks who are primarily interested in making a sale.
All certified crop advisers sign an ethics pledge promising to put the interests of the grower and the environment ahead of personal gain. Our reputations depend on this bond of trust.
Choosing a crop consultant
What’s the best way to select a reliable crop adviser?
First, look for that “CCA” designation, which assures you that the consultant has the knowledge, education and practical experience to make sound agronomic recommendations.
CCAs are certified through the American Society of Agronomy and must pass a rigorous international agronomy examination, plus a comprehensive Minnesota exam. Consultants must also agree to uphold the CCA code of ethics. To maintain certification, CCAs complete 40 hours of qualified continuing education every two years.
Think about what services you need on your farm. For example, could you use help with crop and input planning? Do you need weekly scouting and IPM advice? Soil sampling? Are you looking for a consultant with specialized knowledge in practices such as strip tillage, irrigation management or specialty crop production? Talk to other farmers who work with local consultants and ask for honest evaluations.
Curt Burns is a certified crop adviser from Stewart, Minn., and president of the Minnesota Independent Crop Consultants Association.
•CCA recommendations are based on reputable, independent research.
•CCAs can help you determine which inputs will provide a payback.
•CCAs pledge to put growers’ interests ahead of personal gain.