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RSS By: Chris Barron

Chris BarronHave a margins question? Through this blog, you will gain insight into improving your bottom line, as a margins expert answers questions and provides farm business advice.

 

Time for Corn Harvest

Sep 05, 2011

 

Corn harvest is already underway for some farmers. Many other producers are still fine tuning equipment and waiting for crop maturity. Most years, growers have the luxury to allow the grain to dry down “some” in the fields in order to minimize drying costs. Depending on location, producers usually have a moisture percentage in mind for starting harvest. For some it might be 28% moisture and for others it may be 19% moisture.  This year however, it may be necessary to harvest the corn crop at a higher moisture level. Much of the Corn Belt has experienced weather extremes such as, too wet, too dry, excessive heat, hailstorms, and/or windstorms. Most every farm has experienced at least one, if not all of these variables during the growing season. In general, this corn crop won’t tolerate an extended period of time waiting to dry down in the field. Poor plant, root, and stalk health will require us to put a high priority on harvesting early.
 In visiting with producers across the Corn Belt the most common concerns with early harvesting is the increased cost of LP in comparison to last year. LP costs this year are roughly 30% higher. This price increase may be mentally troubling but don't forget corn prices are roughly 40% higher than last year also. While it's not fun paying more for LP at harvest it's still a relative cost, as compared to the increased corn price.
We have a high value corn crop that's currently in the field! Think of this crop as cash instead of grain. For example, 160 bushel corn at $7.50 is $1200 an acre. If you're going to hesitate on starting harvest for an extra week in order to feel comfortable about the calendar or the moisture of the corn (drying expense), ask yourself the following question: If there were twelve $100 bills lying out in the middle of each acre, would I go out to the field and start picking them up? This may be the year more than ever, to try and keep your perspective on opportunities. Yields are variable but prices are high. Understand your individual risks with leaving the crop in the field too long. Some harvest risks include, severe weather (heavy rains, windstorms, snow), stalk health, down/damaged corn, and grain quality just to mention a few. If there were ever a year to go get the crop it’s probably this one! The best margin manager’s will always aggressively go after their cash opportunities. The money isn’t harvested until the grain is in the bin!
 Here is a basic tool designed to calculate crop value, drying cost, and assess potential economic loss.

    Harvest Decision Aid
 
 
      Harvest   Report
 
Fill in the tan Boxes
Fill in Blank
 
Blue boxes report results
Results
Total Acres
2400
 
Total Crop Value
$2,961,480.00
Grain Price/ bu.(avg. selling price)
$6.67
 
Crop Value Per/ Ac
$1,233.95
Yield
185
 
Total Bushels to Harvest
444,000
 Grain Harvest Moisture %
25.0
 
Total Drier Cost
$177,600.00
Drier cost per/point to... 15%
$0.04
 
Drier Cost Per/ Ac.
$74.00
Daily Harvest capacity / bu.
12,500
 
# Day to complete Harvest
35.5
 
 
 
 
 
Harvest loss potent. (bu. per /ac.)
5
 
Harvest loss expense per/bu.
$33.35
 
 
 
Total Harvest loss Value
$80,040.00
 
 
 
% of drier cost…. value
45%

 
If you're interested in this basic tool let me know, I'd be happy to send it to you.
I’ll have a more comprehensive version of this tool available for next year.
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