Penny pinching could be the difference between making, or losing, money next season. Some input prices are on the rise and if you’re not careful you could miss out on thousands of dollars in savings by buying at the wrong time.
According to University of Illinois Farmdoc 2019 budget forecasts, farmers are expected to fall short $47 per acre in corn and $44 per acre in soybeans on rented ground in central Illinois—highly productive farm ground. Strategic cost-cutting will be important to not only break even but make money next season.
Based on the past four input forecasts on AgWeb (Fertilizer, Fuel, Seed and Chemical) here are five tips to help you cut costs, without sacrificing agronomics:
- Buy fertilizer at the right time. “Spring demand will be high. We did see shortages last spring that had a pretty major impact on prices—I think we might have that to look forward to next year,” says Davis Michaelsen, Pro Farmer Inputs Monitor Editor. “I don’t see much more than a 5% decrease in the off season, but it could be worth waiting for that January or February timeframe.”
- Lock in fuel the week between Christmas and New Year’s—give or take a week. Farm diesel has been steady, but a cold winter could drive prices higher. Propane prices have reset about 20 cents higher, with the potential to jump about 50 cents in the height of demand, Michaelsen adds.
- Keep propane storage full. With potential for dramatic price increases don’t run out of propane in the middle of the night or a cold snap, calculate your needs and fill storage to the top.
- Evaluate seeding rate and seed trait packages. Because you can’t control the price per unit of seed, David Widmar, co-founder of Agriculture Economic Insights, advises you taka critical look at traits and seeding rates to see if savings is possible.
- Consider prepaying for chemicals or reevaluating your standard operating procedures. “For example, if you normally do a post, what does it look like with a pre-emergent herbicide? Don’t just minimize a single application—look at the whole picture,” Widmar says. “You would hate to go for a low-cost application early in the season and then end up spending more later with clean up applications.
Be strategic with each purchase when it comes to timing, volume and other potential discounts. However, don’t sacrifice agronomics for savings—strike the balance to be successful in 2019.