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Wise budgeting decisions can ward off falling profits

By Staff | Jan 15, 2016



A cropping systems specialist with Iowa State University said his recent visits with producers have shown a variety of concerns relative to seed corn purchases for spring planning.

Dr. Mark Licht said the concerns he has been hearing are regarding production costs, and specifically input costs versus commodity prices.

“We’ve switched into a period where the margins are relative tight,” Licht said. “Looking into things relative, the tight margins can give producers good insight into what in reality can be changed as they prepare for planting season.”

In terms of agronomics, he said seed costs are running 18 percent the overall cost of production with corn. He said it’s a 10 percent cost level with soybeans.

“This, outside land and machinery, this is a major cost,” Licht said. “We’re looking, what with today’s genetic seed selection now available, based on 2015 figures indicate a cost of from $120 to $150 per acre as an average.”

He said growers buying traited corn will find those seed corn costs trading from $300 to $350 a bag.

“The question the producer must first ask himself is can he, by using a conventional seed and with good management, cut his total production figure?” Licht said.

He recommends producers trust their own good judgment and anticipate management practices needed to make dedecisions feasible.

This especially, he said, if using conventional seed to cut planting cost compared to traited seed.

Although there is more profitability in corn over soybeans this season, Licht said this does not signal the need for changing crop plans.

“I’m not encouraging crop rotation, but a sound evaluation of the producer’s respective corn program,” Licht said.

He cautioned producers to be aware of increased production management necessary to counter growing resistant weed and insect problems in conventional seed corn fields.

“Producers must be aware that some of the more complex herbicide/insecticide treatments are there,” Licht said, “but at slightly higher cost than those used previously.”

As for changes in spring tillage practices, which are more intense compared to 20 years ago, Licht said that in most parts of the state any needed changes have already been made, except those for fall tillage management.

“If a producer did not make changes he felt necessary following last year’s 2015 harvest, it’s too late at this time to consider them relative to 2016 productivity,” he said.

Licht added producers can still consider if they need to pay attention to proper soil nutrition factors for this spring’s corn fields, and if nitrogen and potassium requirements are needed.

He recommended field grid sampling and variable-rate applications if they think the risk in cutting back will not hinder good growing conditions.

This is a producer-by-producer management decision, Licht said, and if outside consultation assistance is necessary, producers must still scrutinize all cost factors recommended.

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