Road to Success Paved by Marketing

January 23, 2016 01:12 AM
 
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Managing the business side of soybeans is the big key to profitability

In 1980, scorching heat turned Davis Bell’s silt loam ground into an anvil. Under the fire of a 115°F sun, Davis collected water by the drop from every ditch and gar hole he could find. The eastern Arkansas producer, in his first year of full-time farming, emerged with vital lessons in tow.

Today, Davis runs a 4,000-acre farm operation with sons Greg and Ryan. Greg sprays and minds the moving parts of overall management; Ryan handles planting and oversees a 10-bin grain system with near total crop capacity. Every year, Bell Farm runs 75 to 80 variety test strips in corn and soybeans for seed companies as well as tests with chemical and equipment companies. 

Davis walked away from rice in 2006, in favor of a consistent corn and soybean rotation. He typically plants four corn hybrids and four soybean varieties, with each hybrid/variety lifespan averaging three to four years. Most seasons, 60% of his ground is in corn and serves as a buffer against resistant weed advances. He treats soybean acreage with the full attention given to corn, however, leaving no room for stepchild syndrome.  

Agronomic guesswork isn’t given ground at Bell Farm. They tested single-row and twin-row soybeans with the same seeding rate for three years before determining twin-row soybeans consistently yielded up to 5 bu. per acre better. He uses 30" rows with a furrow every 60". Twin-row soybeans canopy 10 days to two weeks faster than single-row soybeans, he says, shading soil and fostering better weed control.

Soil fertility has gained a major boost from an eight-year chicken litter regimen. The Bells have watched soybean yields consistently climb each year. Seed is treated and planted at a 120,000 to 140,000 population rate. If planting conditions are ideal, Ryan sometimes cuts back to 110,000.

Palmer amaranth breakouts lurk, but Greg puts a pre-emergence application directly behind soybean planters when needed, or hits fields later with two shots of a glyphosate herbicide mix. 

Irrigation timing is critical. At about 1' deep, the Bell’s ground meets a plow pan as tight as concrete, with clay below. When the schedule calls for water in soybeans, they might wait two or three days to let soil slightly firm up to avoid disease. Yet, in corn, they stick to scheduling recommendations from the University of Arkansas.

Davis gives an endless list of agronomic and management factors, but all roads lead to marketing. Success and failure in today’s farming are on the business side, he says. “Marketing in my operation is as important as raising a crop.”

Davis has marketed his own crops since the mid-1980s, and when targeting 200 bu. corn or 70 bu. soybeans, he spends as much effort in marketing as he does on agronomics. “I’m not waiting for my phone to vibrate to get a message about a 6¢ bean jump,” Davis says. “Marketing scares farmers, but if I invest the major money in raising a crop, it’s too hard for me to give somebody else the reins on returns.”

What advice does he offer? Gather information from every source available, in the same manner as equipment or seed varieties. “You’re gonna have to get your feet wet. Take $10,000 from your savings account to learn marketing. Tell your wife what you’ve done. When she gets through looking at you, you’ll definitely go learn how to market your own crop,” Davis says.

Down the road, Ryan will inherit marketing duties. He’s already soaking in courses on futures, options, finance and bookkeeping. “I’m not afraid of the constant chase to get marketing information and experience,” Ryan says. “The more I learn, the more I realize how much I don’t know.”

Farmers have two options to improve their financial footing, Ryan notes. “First, we’ll grow as fine a crop as possible, but we can’t control prices or the weather,” he says. “Second, we’ll reduce input costs. I can’t go without seed and fertilizer, but I’ll look for early discounts and other benefits.”

At the end of harvest, the Bells examine every cent spent and allocate spending for the next year. Tracking is crucial to account for their financial health—pouring over spreadsheets, yield histories, chemical test results, soil samples, marketing and more. Their goal for 2016 is to cut $125 per acre from corn inputs and $75 per acre out of soybean inputs. The Bells can cross out $75 from corn and $45 from soybeans relatively fast. The rest? “I don’t know where it’ll come from but I’m working on it,” Davis notes. 

Current prices dictate input cuts, but Davis doesn’t gloss over the difficulties. “Right now, everybody knows the toughest part of farming is survival,”  he adds. The Bells own 2,000 acres of their operation—an asset Davis says is a blessing to have. “If your only equity is in equipment, you’re taking a 30% to 40% cut in equity in the past two years. It’s not something you can control and makes it very tough to survive unless you’ve prepared for it,” he says.

Complacency is a farm killer, Ryan notes. “We all want as much as possible for our crop. We never want to depend on harvest prices,” he says. “NRCS has programs available we all miss. Incentives might be sitting there but aren’t claimed. Farmers have to stay current on everything available.”

Economies settle and markets run in cycles—maxims Davis takes to heart. “World demand is going to only get bigger. Capitalize on good times to get through bad times,” he says. “A young farmer shouldn’t give up, but he should never think he’s got things figured out. Find a mentor with proven success because that type of farmer will almost always help a fellow farmer.”

 

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