Meeting offers wheat farmers production, marketing advice
By Jennifer M. Latzke
The 2013 Bayer Profit Maximizer Wheat Summit brought experts in wheat production and marketing to growers gathered in Wichita, Kan., Aug. 8.
The day kicked off with Kim Anderson, Oklahoma State University professor of ag economics, discussing marketing decisions with farmers.
Planning for profit is just as important before the season as selecting a variety for the right field. He said the difference in income for the top third of Kansas producers versus the bottom third of Kansas producers is management of costs.
“The best farmers had a 27 percent decrease in their costs, for a $24.16 per acre profit,” Anderson said. Whether it was increasing the number of acres rented; planting intensity; or herbicide usage, farmers who controlled their costs were more profitable.
Whereas an increase in price only raised profits by about $2.70 per acre, Anderson said.
“This doesn’t mean you should ignore marketing,” Anderson said. But rather understand that it is extremely difficult to increase profit from marketing decisions alone, he added.
“Futures and options are excellent risk management tools, but they aren’t price enhancement tools,” Anderson said. “You don’t use them to make up your price.”
Anderson emphasized that no one can predict prices in the market, but farmers must start making marketing decisions based on probabilities.
“Make decisions based on what is normally right and avoid what is normally wrong,” he said. Develop a simple marketing plan, he said. Anderson likes a plan that sells one-third of the crop at harvest and splits the remaining crop for sale at regular intervals thereafter. Whatever the plan, though, write it down and follow it, he said.
John McGillicuddy then spoke about the management of the wheat crop during the season. McGillicuddy is an independent crop consultant with McGillicuddy Corrigan Agronomics in Illinois.
Grain prices may rise and fall, but good management pays the biggest premium in the difficult times, whether it’s because of markets or weather, he said.
“Management matters most when it doesn’t rain,” he said. “Management pays the biggest returns in difficult environments.
“Today’s dilemma, though, is that you only have so much time and money and you’re being asked to divert it to fertilizer, technology, tillage, machinery, fungicides, micronutrients, additives, lime, storage, tile or drainage, herbicides, employees, transportation, land and rent costs, and traits,” he added. “You have to put your money where you know you’ll make the most return. You have to make some hard decisions in this game. Focus on whichever gives the highest return in the quickest time.”
It’s critical that farmers know just how much they have to spend to get the yield they need to meet their profit target, and sticking to that budget is the key.
So, should a wheat farmer invest in fertilizer and fungicides? McGillicuddy said if it helps him establish better tillers and head counts, so that there is more in the field to protect, then take the emotion out of the decision and protect that crop.
“If you don’t know where to start, then I would go after head count, because it is more consistently affected by good management,” McGillicuddy said. That can be accomplished by managing seed rates, row width and plant nutrients.
A part of making sure those plants are healthy in the field are fungicides, and Jeff Edwards, Oklahoma State University small grains Extension specialist said fungicides shouldn’t be an afterthought.
“Certain wheat varieties we have today must have fungicides, while others may not need them,” he said. “Know your variety and know whether or not you will spray. Because fungicides are the capstone of a good management season.”
A successful wheat farmer builds his yield potential through variety selection, plant nutrition, crop rotation, and timeliness, Edwards said. But, protecting that yield potential through harvest management, grazing control, disease control and insect and weed control is just as important.
Edwards said he’s coming around to the idea of split applications of fungicide.
“If you put on the full rate of a low cost or generic product early on, you’re further out from the harvest at that stage with fewer unknowns,” he said. Some farmers will apply a half rate of a product at first, and then follow up with a full rate at flagleaf stage, but Edwards would rather see full rate applications.
He said there’s been some success with applying a fungicide like Tilt at 4 ounces per acre, and then following up later in the season with another product, but this works best in a no-till situation or when the yield potential is greater than 60 bushels per acre.
“Timing is more important than the method,” he added. “Ground rigs are just fine. The coverage is the key. There’s some debate over aerial application versus ground rig. But you need to apply the product whenever the wheat is starting to flower.” The loss of a small amount of wheat to a ground rig is a small price to pay to protect yields and ultimately profit of a field, he added.
Jennifer M. Latzke can be reached at 620-227-1807 or email@example.com.