PRST STD U.S. POSTAGE PAID OMAHA, NE PERMIT NO. 36
Section
A
Volume VI, Issue 1
JANUARY 2012
Looking ahead to 2012 spring planting Farm economist urges efficiency to manage costs
A farmer prepares his field for spring planting in 2011 in this Iowa Farm and Ranch file photo. The same farmer will see some increase in input costs, according to Iowa State University farm economist Dr. Michael Duffy. Photo by Gordon Wolf
by Greg Forbes Although winter weather appears to be just beginning, in a few months spring will arrive, and with spring comes the planting season with its production inputs. Prices for fertilizer, seed corn, pesticide and even land are at all time highs but remain necessary when managing a farm. The root of high costs, according Dr. Michael Duffy, farm economist at Iowa State University, is fuel. A farm simply cannot run without fuel. Duffy said it is a fact that production costs for corn and soybeans are up 10 and 15 percent respectively from last year but cautioned farmers to remain responsible despite high prices. “Use good judgment,” Duffy said. “Even though costs are high, now is not the time to abandon good management.”
Duffy said a way to manage high costs is to be efficient. He encouraged farmers to use the appropriate seed type; be aware of the planting depth; maintain good, sound pest management; and to not make unnecessary trips across the field. “It’s always important that farmers carefully evaluate what they’re doing,” he said. Even with high production costs, Duffy said the projected cost of corn per bushel shows farmers can still make a profit but, again, only if they continue to watch prices and manage with the best judgment. After evaluating production costs for 2012, Duffy also said he did not notice many dramatic price increases in pesticide, seed corn and fertilizer mainly because the price of fuel has stayed steady recently. However, land rent has jumped nearly 20 percent compared to last year due
to the spike in land costs. Landlords might charge more to tenants to meet the cost of their land; Duffy said rent will be higher everywhere. A farmer on rented land needs to be aware of costs before signing a lease. “It’s important to not forget business practices and to evaluate all purchases,” Duffy said. “The bottom line is that people need to be very careful about their rents and avoid paying more than they can afford.” “The bottom line” for farmers, as Duffy mentioned several times, is to settle down and use good judgment. Farmers have to be aware of every cost and purchase and the weather because good decision making may be the difference between profit and failure. “Don’t expect an extraordinary yield,” he stated. “Plan for average and if we can get above average, then we did great.”