As of Tuesday, Dec. 9, the drought monitor report indicates no real change from last week overall with some continued improvement in eastern Kansas. The recent rains leave most of the state in very good shape heading into mid-December. The six-to-10-day outlook (Dec.16-20) indicates a 70 to 90% chance of likely above normal for temperatures and a 40 to 50% chance of leaning below normal for precipitation. The eight-to-14-day outlook (Dec. 18-24) indicates a 60 to 80% chance of likely above normal for temperatures and 40 to 50% chance of leaning below normal for precipitation. A little warm but decent for wheat tillering. And we normally receive about an inch of liquid precipitation during December.
For the last two weeks we discussed the economic challenges crop producers are facing. This includes the international nature of inputs and outputs regarding price. We also discussed the differences faced compared to a conventional producer of products like a car company or other manufacturer. So how can producers maximize profits?
The profit equation is simple: Profits = Total Revenue – Total Costs (fixed and variable costs). Producers have no control over the price. They can take it or leave it. There are opportunities to forward contract next years crop. There are calls, put, and options along with other marketing tools. However, the way to maximize profits (or in some cases, minimize losses) is through efficiency. Efficiency is a very fancy way of saying to minimizing costs. It’s not that a producer doesn’t spend money but optimizes inputs costs and yields. You want to optimize, not maximize production as maximizing production isn’t profit maximization. The goal is to be frugal, not cheap. What are a few items a producer can implement towards this goal?
• Minimize to the best of their ability fixed costs that must be paid no matter your production. This includes loan payments, equipment, and other items. This can be easier said than done and challenging, especially for younger producers. The fewer your fixed costs, the more flexibility you have. The less long-term debt the better.
• Look at markets and make the best guess as to the most profitable crop combination. Then look at the cropping season outlook, your (APH) average production history and what it takes in terms of inputs based on your realistic yield goal.
• Producers can often save money on inputs by purchasing inputs during the offseason when prices are typically lower. Many seed companies give decent discount when ordering early. Do some homework and see what future prices for an input are expected to do.
• Know what you have in terms of fertility. While grid sampling provides the clearest picture, soil sample regularly using at least bulk samples. Know your pH, soil nutrient status, what you project you will need and proceed accordingly. Know the weed and pest history and plan accordingly.
• Minimize or eliminate tillage to conserve soil and water in addition to using less labor and fuel. And as best as possible, develop as diverse a crop rotation as practical for your area.
• Monitor and pay close attention to fields and address problems in a timely manner.
Dr. Victor L. Martin is the agriculture instructor/coordinator for Barton Community College. He can be reached at 620-792-9207, ext. 207, or martinv@bartonccc.edu.
