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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.

 

Dealing with the Storm's After---Math

Jul 17, 2011

 The storm’s –After Math

In the last blog we discussed the windstorm that moved through a portion of the Corn Belt with straight-line winds that ranged from 60 to 110 mph. This weather event left a major path of destruction from buildings and grain bins to crops and homes. Thankfully, there were few physical injuries with this storm. Emotional injuries on the other hand, were plentiful. Now that people have had a week to begin to recover it's truly amazing how fast we can clean up and begin to rebuild. Another amazing example of rebuilding that I've observed is the corn crop itself. It's incredible how the corn plant is designed and focused on productivity!

Here are two pictures of the changes in our corn crop within just a 48 hour period of time.

This picture was taken the day of the storm. 75 mph winds

Summer 2011 Flat Corn 0

48 hours after the above picture of the same field.

 

 Summer 2011 Flat Corn  2 051

This particular field continues to improve by the day. What can we learn from this corn field or the corn plant itself? The corn plant is focused on continuous repair and productivity. The corn plant will never give up, it’s designed and engineered to produce yield. If the corn plant is doing everything it can to produce yield, maybe we should do the same. As the corn plant tries to maximize its production what can we do to maximize our profitability? There are still several things we can do to enhance yield in damaged areas as well as areas with no damage. Some examples include fungicide, additional nitrogen, or insect management, just to mention a few. Fungicide specifically in areas where corn was blown down or damaged may present the best opportunity for yield enhancement. Fungicides can also improve plant health. Better plant health can translate to stronger stalk quality in the fall, which can improve harvestable yields!

Keep in mind that a consistent and disciplined marketing plan is still a critical component to the profit margin equation. When corn prices are at these levels it's important to calculate the enhancement opportunities with the tools we have available.

Now that the storm has blown over it’s time to deal with the after –Math.   Always try to keep a proper perspective and remove emotions whenever possible. Continue to stay focused on calculating current opportunities as variables change. You may have been hoping for 200 bushel corn, however; at the current price of $6.50 per / bu. for corn at 154 bu. /ac. you still receive just over $1000 per / ac.           With the current price levels it's worth trying to do whatever you can to enhance yields in most cases.

Below is an example of a decision tool that I introduced in my blog several months ago. This is a simple tool designed to calculate margin enhancement opportunities. Assumptions were made using fungicide on (corn on corn) in Northeast Iowa, where we experienced moderate wind damage.                                                

 

Fungicide assumption for Corn on Corn with wind damage.

 

 

 

 

 

 

             Margin Enhancement Calculator

 

 

 

 

 

Product / Technology Price

$27.50

per/ac.

 

 

 

 

 

 

 

 

 

 

 

 

 

Grain Market Price

$6.50

per/bu.

 

 

 

 

 

Yield Improvement prediction

12.0

Bu./ac.

 

 

 

 

 

 

 

 

 

 

 

 

 

Income / ac. Enhancement

$50.50

per/ac.

 

 

 

 

 

Bu. needed to cover product cost

4.23

Bu./ac.

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Acres of application

500

 

 

 

 

 

 

Total Income  / Return $$$

$25,250.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fill in the Tan Boxes for results

 

 

 

 

 

 

Each individual situation is unique and needs to be reviewed with its own specific set of numbers. Using decision tools is a key ingredient in the process of improving your profitability.

Whenever challenges occur which threaten yield productivity, it's time to get to work on your after –Math.

If you're interested in receiving this spreadsheet, please send me a request and I'd be happy to forward it to you. If you're interested in more detailed production calculators feel free to contact me.

Cbarron@cb-farms.com

319-533-5703

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