Farm Profitability

Management Practices vs. Traits – A Noticeable Difference

Take a look at the picture below of two separate farmer’s soybean fields. Roundup Ready soybeans were planted on the left and Non GMO soybeans on the right. Do you notice a difference? It’s apparent that nothing will compensate for overall management.

Weeds are very heavy on the left, even after being sprayed several times. Although water drowned out some crop on the right, the excess of water should have also allowed for more weeds…but management did not. This is perfect example of management practices vs. traits.

Management vs Trait

 

How Can You Benefit From A SWOT Plan?

SWOT PlanningSWOT is a simple system that can be used to analyze your business.

So what does SWOT stand for?
S – Strengths
W- Weaknesses
O – Opportunities
T- Threats

Reviewing each of these areas for your farm business will help you formulate better strategies. During your analysis, consider each section of SWOT with realism and try to be specific. It is worth your time!

Benefits of Using SWOT

  • Recognizing where your business can grow.
  • Understanding the possible hurdles.
  • Focusing on how to be competitive.
  • Anticipating threats and how to be proactive vs. reactive.

Internal vs. External

Strengths & Weaknesses – Both strengths and weaknesses are internal. Here is where you have the most control. Control over what crops to decide to grow, how to plant, nurture the crop during the growing season and how you sell your crop.

Opportunities & Threats – Opportunities and threats are external. They are things that you cannot change nor control; such as land for sale and at what cost, unpredictable storms, excessive rain or drought, and grain market prices.

Additional Resources

Many businesses both small and large have used SWOT. Doing an analysis such as this will give you a starting point to your individual plan. It will allow you to look at the big picture and take action by controlling what you can, reducing threats and positioning yourself to take advantage of any opportunities that come along.

Let Corn Capital Innovations assist you with creating a plan for your farm business in 2014. Contact us today!

During the Holidays Take Time to Reflect

Many of you can relate to the memorable and historical moments that took place in farming this past year. During this holiday season we want to encourage all of you to give yourself a special gift, the gift of some time out. Time out to reflect on this past year and acknowledge what went really well for you, the opportunities you created and the wins you’ve had along the way. The gift of this time is the opportunity to look forward, and design what you want for your farm for the next year.  If you could do anything for your operation, what would it look like?

Complacent or Compliant on Your Plan for 2014 and Beyond?

triangleBeing complacent is being satisfied with how things are and not wanting to change them. Being compliant is being willing to and agreeing to change.

The Ag Market we have experienced in the last 3-5 years, being complacent may have still worked.  In these last years the market and revenue was on an upswing, we had short crops and higher revenues.  American Farmers have experienced the biggest corn and bean crops in history, however, with the declining value (market prices) and margin potential, we must say “good-bye” to complacency and “hello” to agreeing to change and being compliant!

One of my favorite quotes is “Insanity:  doing the same thing over and over again and expecting different results.” by Albert Einstein

 

If we don’t quickly become compliant and start doing those things that make a difference we will not find profitability in 2014, 2015 and beyond.

What can we do?  Minimize our losses!

  • Keep an eye on your breakeven price
  • Have a proactive marketing plan in place
  • Re-invest wisely
  • Negotiate cash rent prices
  • Watch debt and take advantage of lower interest rates
  • Have a risk management plan in place
  • Most importantly, out produce those around you

With profit margins becoming tighter (crop input costs moving up and crop prices moving down) the farmers that are willing to be compliant, manage their margins, and make a plan for the future are the ones that can expect success, even in a volatile world.

Thinking about maximizing the opportunities the market gives you, keeping an eye on break evens, minimizing mistakes and healing mistakes that have been made, will put you ahead for the coming years.  A $50 mistake from the past is really like a $150 mistake now, because lost margin is creating a negative impact. Farming is a tough business and I think all business out there struggle from time to time.  How will you work through these struggles?

There are four components of profitability that are within your control:

  1. Production
  2. Crop Insurance
  3. Grain Marketing
  4. Financial Analysis

We specifically tailor these four components to each individual farming strategy.  Let us work with you to create a positive impact on your overall operation for 2014 and beyond!

Five Factors to Produce a Top Crop

Spring is just around the corner and soon we will be back in the fields.  To prepare for this spring, we want to talk a little about minimizing the effects of 1,000 variables that Mother Nature will throw at you.  Controlling the 5 factors listed below will set your operation apart from the others each and every year!

  1. Soil conditions at planting
  2. Seed placement
  3. Seed quality
  4. Right variety in the right field
  5. Post-planting management

Soil – What are the ideal conditions to plant into?

Knowing when the soil is perfect takes both the science of seed and soil.  An old rule of thumb was to plant your crop based on the calendar.  While it is important to get your crop planted in a timely fashion, nothing is more important than the conditions you plant into.  Corn will yield the best if planted when soil is 50 degrees or higher, with a steady increase of temperatures in the forecast.  Perfect soil conditions start with the first tillage pass.  The ground must be level and firm.  The residue must remain sized and high in the soil column to keep it out of the seed trench where it can disrupt germination.  Ensuring the seed trench has good tilth, is not smeared, and is closed effectively will help in producing a great stand.  It is always better to wait 24 hours for better soil conditions than to simply push the envelope and cross it off the list.  You only get 1 chance to plant the crop per year and patience pays in the form of yield!

Seed Placement – What is the ideal depth to plant?

Depths of 2 – 2.25 inches are most favorable for corn.  Be cognizant of your speed as over 4 miles per hour could result in too much fluctuation in depths due to row unit bounce.  Uneven planting depth will lead to uneven emergence.  Keep in mind that a plant that emerges 24 hours after others will never catch up or produce to its fullest potential! Depths of 2-1/4” will ensure that the corn plant grows its full set of nodal roots and can handle the stresses and needs of the growing season.

Seed Quality & Matching the Right Variety to the Right Field

Starting with the right seed for your soil conditions is only the beginning. As you know, you can’t control Mother Nature.  How you handle what she gives us is the one thing you can control!

It’s not just about picking the right genetics; it’s about matching the right germplasm to the right field as 75% of all varieties never perform to their potential because they are planted on the wrong piece of ground.

If you have started with high quality seed, you must not place it in harm’s way!  The first 48 hours that the seed is in the ground are the most important.  Planting into suspect conditions, ahead of a cold rain, or in wet soils with residue in the seed trench will sacrifice even the highest of quality seed.

Post-Planting Management – After the planter is in the shed.
Proper post planting management starts with a plan!

We will address some of the challenges and strategies in our April Blog.

Do you have questions on how to increase your production as you nurture your field this growing season?  Ask us below or Contact Us today!

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