Farmers Share Cost Controls

 
Farmers Share Cost Controls

A growing number of farmers are using high-tech tools to not only boost crop yields but also ratchet down costs. From fertility to labor to catching accounting mistakes, every single dollar spent is under scrutiny as farmers brave the new world of crop prices. But be careful not to cut so deep it hurts yields.

Nutrient Flexibility

By measuring nutrient needs in real-time, Baxter, Kan., farmer Scott Jarrett saved $30 per acre on nitrogen in the past year without jeopardizing yields. His crop sensing system, working in tandem with his variable-rate fertil-izer applicator and cloud-based field maps, suggested a 50% cutback in nitrogen on wheat based on carryover levels. Initially, he thought that was too aggressive, but previous experience with the system gave Jarrett the confidence to roll with it.

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Sometimes the sensors tell him the opposite—to apply more nitrogen than past amounts. That, too, can cut costs by boosting yields.

Jarrett, who grows corn, soybeans and wheat with his son, Andy, has also been able to cut phosphorus and potassium rates by 10%. “I’m soil sampling every five acres, but I think I’ll cut back to 10-acre grids,” he says, underscoring the importance of flexi-bility. He’s been able to save the most on lime—a cutback of 50%. While he realizes he won’t be able to save that much every year, he’ll take it when he can.

Precise Cost Analysis 

The key to cost containment for Todd Stephenson has been to steadily improve his cash flow and budgeting process. Both are updated weekly in almost real time. Having precise cost information—with the help of a chief financial officer—keeps costs in check and pinpoints areas that warrant attention. “If something isn’t in the budget we don’t do it unless there’s money in a category that’s under budget,” he says.

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“We run a lot of ‘what if’s’,” says Stephenson, who farms with his wife, Christy, his brother, Brad, and his sister-in-law, Stacey, in Fortville, Ind. For example, his detailed budget and cash flow process showed he was under budget by leasing equipment instead of owning it. “Selling our equipment freed up cash we could plug into working capital,” he adds.

It doesn’t stop there. Stephenson found they need only one employee for every 1,000 acres. 

Using an inventory control system, Stephenson weighs everything in and out. “We’ve found loads of grain we weren’t paid for,” he says, and that’s real money.

Check and Balance

Shifting acres from corn to cotton in 2015 is expected to save Wildorado, Texas, farmer Braden Gruhlkey $50 per acre. A switch to strip-till is already reducing fuel and labor costs. “It allows me to keep equipment longer,” he adds.

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When it comes to fine-tuning costs, Gruhlkey is focusing on precisely matching inputs to yield goals using cloud-based field mapping software. “If I have the water and fertilizer, I’m hoping mapping and soil testing will allow me to reach 240 bu. to 270 bu. per acre corn yields,” he says. 

Using harvest and input software, Gruhlkey calculates costs and returns for his variable-rate system on a per-field basis with a detailed history of inputs. This allows him to book input needs when suppliers are offering the best deals and apply optimal rates on a micro level. 

Because his system double-checks weights, Gruhlkey realized his elevator’s computer system made an inaccurate calculation on corn moisture that shorted him 3,500 bu. “That’s a lot of money and paid for the system,” he says. 

 

 

 

 

 

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