Hello ReaderHarvest is drawing to a close with most farms finishing up this week. It has been a slow, tough grind and I know everyone will need a moment to regroup when the dust stettles. I’m off to Des Moines, Iowa next week for the Truth about Trade and Technology, Global Farmer Round Table. A gathering of 16 farmers from 15 countries, it should offer some great conversations.
We’re gearing up for our fall soil sampling program starting next week. We are also offering DualEM mapping which is a great way to map elevation, salinity and soil texture. I was surprised to see how closely yield followed my EC readings.
In this week’s issue we’ll review what separates top farms from their peers. Next, I’ll provide some helpful tips on the use of fall applied Avadex and Fortress granular herbicides. I’ll include a summary of the global farmer round table I’ll be attending next week and finish with a video showing the CX6 Smart Seeder drill in the field.
Have a great week.
Harvest Progress(Calgary to Drumheller to Three Hills)
What separates you from the rest?As commodity prices look poised to slip downward in 2014-15 and margins get tighter it’s important to keep costs in check. So what operations are poised to continue with good profitability in spite of the potential downturn? I was re-reading a 10-year study from Kansas State University that looked at the differences between high, medium and low profit wheat producers. In spite of many uncontrollable variables that impact farm profitability, there are some within the farm manager's control. The study looked at these variables and outlined what separated the high profit farmers from their peers.
Economies of scale
High-profit farms farmed 10% more acres than mid-profit farms and twice as many acres than low-profit farms (i.e. there are financial benefits from economies of scale and the advantage is growing).
Cost of production
Machinery costs had the biggest impact on profitability. Machinery costs were 33% lower for the high-profit farms relative to the low-profit farms. The second greatest influence on farm profitability was the ability to buy crop inputs with fertilizer and herbicide in the top two. High-profit farms spent $18 an acre less on fertilizer and herbicide than the bottom third.
Price and yield
The average yield difference plays a larger role in explaining income differences than the average price difference. Yield and grain prices contributed the least to overall profitability. There's little evidence indicating that producers can consistently get higher prices than the average (i.e., the fact that they get a high price one year is somewhat of a random occurrence).
What this study revealed was that farm managers should stay focused on building economies of scale. I think it’s important to note that high profit wheat farmers were 10% larger than the norm, not 100%. Economies of scale can lead to dis-economies of scale as well where efficiency gains are lost due to un-timely applications.
Next, controlling equipment costs is paramount with high profit farmers having 33% less equipment costs than low profit farmers. It is especially true to re-evaluate equipment costs after a bull run on commodities and good yields the last few years. I’ve personally seen $120 an acre differences in fixed costs on producers with the same acreage and yield potential.
Crop inputs and timely fertilizer and chemical purchasing also separated the high profit farmers from the low profit farmers to the tune of $18.00 acre. Knowing your herbicide plan well in advance and allowing for a few in-season changes can save you money. Also, there have been $100+ a tonne swings in fertilizer prices the last few years, which can add over $10.00 per acre to fertilizer costs.
High-profit farms had the highest income, lowest cost, and highest acreage of the three groups leading to a difference in returns of approximately $120 per acre. The differences in profitability were primarily driven by cost and yield differences with cost being number one. As we move into lower commodity prices it is so important to give ourselves a reality check to make sure our costs are in line. This study from Kansas State was a good reminder. SL
To read more on the study, go here.
Planning a fall granular herbicide programNow is the time to prepare for fall applied Avadex (triallate) Group 8 and Fortress (triallate + trifluralin) Group 3 and Group 8. Soil temperatures are dropping and it will soon be time to get a head start on wild oat control for next year. I’ve been using Avadex and Fortress for a number of years as a way to manage herbicide resistance and increase yields by removing early emerging wild oats.
My favourite strategy is applying a 10 lb/ac rate of Avadex in the fall with no incorporation on soil less than 6% OM. We apply Avadex right before the snow falls and use the snow and rain to move the granules to the soil surface. I follow up with a reduced label rate of Simplicity (150 ml/ac pyroxsulam) in crop at the 3-5 leaf stage. The total cost works out to roughly $14.00 an acre for Avadex applied and $12.50 an acre for Simplicity at the 150 ml/ac rate. I realize it’s $26.50 an acre in wild oat control but that is cheaper than spraying twice in crop and doesn’t give wild oats a chance to rob yield.
With that, I've included some tips on fall applications of granular herbicides below:
- I’ve had good luck with a simple application of Avadex or Fortress in late October to mid-November with no incorporation from a harrow. So long as there is soil exposed and the ground is cool, we try to utilize snow and rain to wash it into the soil.
- I like to apply Avadex or Fortress ahead of wheat. With 10-12” row spacing, you rarely find total canopy closure which means wild oats find room to grow. Avadex performs well in this scenario.
- I have had clients who’ve used Fortress as a stand alone ahead of barley with no in-crop wild oat herbicide for 20 years. The triallate and trifluralin control the early flushing wild oats and the canopy closure from the barley controls the later germinating wild oats. This is a great strategy!!
- The optimal timing to apply Fortress or Avadex is just before freeze up when the soil temperature has dropped below 5° C.
- Applying these products too early on soil with temperatures greater than 5 degrees Celsius will activate the granules. You want the granules to activate in the spring and not now if you want control next year!
- If you have heavy residue, you only require a "tickle" to move granules to the soil surface - a gentle heavy harrowing to make sure the granules are dislodged from the straw and chaff and placed on the soil.
- Granular herbicides are soil-active, so we must provide every opportunity to place them on the soil. If excessive crop residue does exist at application, a heavy harrowing should be done to ensure soil contact.
- Aggressive heavy harrowing can leave small trenches where the granules concentrate and leave you with patchy control the following year. Set the harrows to the tickle setting, not the cultivation setting.
Truth about Trade and Technology
Global Farmer Round TableI was nominated to represent Canada at the Truth about Trade and Technology, global farmer round table in Des Moines, Iowa. A total of 16 farmers from 15 countries including India, China, Vietnam, Ghana, Argentina, Australia, New Zealand, US and more will come together to discuss challenges, tools, technologies and strategies to meet the world’s growing food demand.
This is such a unique opportunity! I really look forward to have rational discussions about GMO’s, precision agriculture and the tools that farmers use to increase production while managing costs in other parts of the world.
If you want to learn more about the organization go here.
For interest’s sake, there is a time clock on the homepage that captures the number of biotech crop acres planted and harvested since 1996. We’re just about to hit 4 billion acres of GMO crops harvested. SL