DECATUR, Ill. (DTN) -- Ken didn't mince words when I bumped into him at a recent farming meeting. "I hope to heck you are not writing about how to trim costs this spring. I want to read about how to make more with every dollar I spend."
Steve, another farmer buddy, expressed the sentiment in a slightly different way. "I'm not spending money unless I know it makes money this year," he said.
Return on investment (ROI) is a pretty simple concept. How much do you get in return for what you invest? What's not so simple is figuring that in crops when ROI varies from one year to the next. Seed treatments in soybean are a good example. A bean leaf beetle infestation will demonstrate just how well insecticide seed treatments work, but in most areas it is not a threat every year. Is that added insurance worth the cost when rescue treatments are available?
History of crop rotation and pest pressure should help decide if seed treatments on soybeans are one area you can trim back this year. Fungicides tend to be relatively inexpensive, but again... what is the history of crop rotation, disease pressure and drainage? There are also an endless supply of biologicals and other additives and people waiting to say how they will boost yields too.
Bringing in more bushels can effectively lower your cost per bushel. However, the temptation to chase yield with inputs alone can surpass available dollars and good sense. University of Arkansas entomologist Gus Lorenz has the best advice I've read on the importance of considering ROI when purchasing inputs. Read it here: http://bit.ly/…
"In these tough times, my advice is to take a look at everything you do, every product you're putting out, everything you add to the spray tank when you are going across the field. In the process, ask yourself one simple question: "If I put out this material, will it give me a bonafide return on what I spend? Will it actually make me money?"
"Again, can you find data that support all the claims? I'm talking about hard numbers, not anecdotal references and coffee-shop talk," Lorenz said.
It's all about knowing your budgets and how much that extra $1 to $2 costs when multiplied by number of acres. Those added just-in-case items quickly take the wiggle out of what little if anything is left for rescue treatments, Lorenz noted in his missive.
It's also about knowing what works and what doesn't for your situation. Again, that sounds easy, but it can get awfully complex when faced with a multitude of products and scenarios, especially when inputs you've long relied on don't work anymore.
Weed resistance to herbicide is often the result of trimming the wrong input dollars. Spraying an herbicide to control weeds in an agronomic crop does not increase crop yields -- it only allows the crop to access more resources it needs to express its genetic potential. It's easy to get lured into thinking that maybe this time we can skimp on rates early or hold out until all the weeds break over the top so we can limit post applications -- when in reality that's a recipe for resistance.
Recently, there's been a lot of talk about conventional and organic crops because we've suddenly "discovered" traited seed costs more. Yes, there is potential savings and money to be made in those markets, but keep in mind it takes attention to management that requires real planning and diligence. Again, it's all about potential returns based on your local markets, labor availability and ability
The easy button is broken at a time when there's never been more "free" advice swirling in the marketplace. Making decisions based on returns in 2016 requires homework and they need to be tailored to your farm and situation. My mother used to tell me: "Girl, you aren't going to find that on the ready-made rack... you are going to have to figure out something that works."
Pamela Smith can be reached at Pamela.email@example.com
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