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10
Mar
2016
Times are tough-scrutinize every input choice
Author: Gus Lorenz, Extension Entomologist

By Gus Lorenz, Extension Entomologist

Seems like most everybody who retails ag inputs is offering products that they profess will boost yields, even make ‘em skyrocket. Only problem is, claims often aren’t backed up with unbiased data to prove that these materials provide growers with a return on investment–that ROI that should guide every decision.

In these tough times, my advice is to take a look at everything you do, every product you’re putting out, everything you add to the spray tank when you are going across the field. In the process, ask yourself one simple question: “If I put out this material will it give me a bonafide return on what I spend? Will it actually make me money?”

Again, can you find data that support all the claims? I’m talking about hard numbers, not anecdotal references and coffee-shop talk.

A little red flag should pop up when somebody says that you’ll make money putting out a product every time you go across the field. Across years of testing, the University of Arkansas has never to my knowledge found any material that pays for itself when used on that kind of constant, wash-day kind of basis. Never, ever.

Let me add that ag universities – the University of Arkansas included – are always looking for products and approaches that will boost yields in a logical, return-on-investment kind of way. If a company promotes a product with extravagant sales claims and if it really works, they should have independent scientifically based information – replicated plots across multiple years – that back up the sales pitch. Logically, you’d want to have that kind of data to let the product sell itself.

Remember: folks who sell products have a direct financial interest in making add-on sales. They’ve got to hit goals. Plus, a company’s proprietary products – those extra materials that go into the tank – are likely the ones that carry the very best markups.

I’m all in favor of capitalism, but farmers are consumers and me and all the folks I work with in Extension want them to make buying decisions that sustain farming operations across generations.

A Dollar Here, A Dollar There – It Adds Up

It’s easy to fall into this mode of thinking, “It’s only another $2 (or $4 or $8) an acre.” With that phrasing, it sounds like you’re spending loose change. But over a season the cost of those extra materials in the tank adds up. In a year with tight margins, can you afford to put money into something that has no proven record of performance?

You’ve probably heard the expression, “Take care of the pennies and the dollars will take care of themselves.” That’s the case here, only magnified into some serious money.

Another trap is to pay too much attention to your neighbor. He may sincerely think that a program or product gave him extra yield, but that doesn’t necessarily make it so. He’s not putting out those replicated trials year after year. Even those untreated swaths don’t provide any kind of real confirmation, no matter how closely the yield monitor is calibrated. One year’s results in a specific field is nothing more than a fuzzy snapshot of a point in time.

Protect Your Budget, Protect Your Future

Among other things, these add-on products blow budgets apart. Farmers might go into the season determined to stick with an itemized production plan, whether it’s based on past experience, university budgets or some combination of the two. They realize that circumstances can change and they will need to adjust budgets when unexpected problems arrive.

In the long run, adding unbudgeted components to the spray tank can drain away any wiggle room in your plan. Money that might have been available to deal with increased insect control costs, for example, can be quietly eaten up by adding products that probably won’t pay for themselves.

Remember, this will be a tough year with no margin for error or extravagance.

Consultants, Budgets And Commodity Prices

Here are three basic recommendations from me but also, I suspect, from the wider Extension community in our region.

First, rely on a good private consultant. If you don’t work with a consultant, get one. If you have a good consultant, don’t let him or her go. I’m being told that some growers either have dropped their consultant or are thinking about it. They’re being encouraged to do so by various sources.

If ever we had a scenario where farmers need consultants, this is it. In a fat season with high commodity prices, consultants add to profit. In a shaky year, a good consultant will probably keep you from doing anything too stupid (not to put too fine a point on it).

A consultant’s ultimate goal is to help the client make more money. Or, perhaps in a year like this, break even. It’s a different reality in 2016 than we’ve had for a while.

A good consultant saves the grower money by monitoring the crop for weeds, insects and diseases and treating when needed – not when the neighbor sprays or just because you’re already making a trip across the field. Consultants will more than justify what you pay them by finely tuning your application timing, product selection and such. In other words, whatever you spend on their fees, they’ll make you more than you’re paying them.

Let’s remember, too, that consultants take a far more holistic approach now than in the old King Cotton days when they simply scouted for insects. They can help clients pick varieties, time irrigation and fertility, select the right herbicide or insecticide that fits the situation. They know what’s working and what isn’t.

Beyond all that, consultants often catch small things before they develop into huge, money-sucking problems.

The private consultant has nothing to sell, so they don’t care what product you use, other than the fact that it fits the situation. Remember, they want to improve the grower’s bottom line. Their only bias is for the client.

I know a lot of consultants who worry and fret over a grower’s crop just as much as the grower does. They care about the farmer and want him to be successful. I won’t tell you I always agree with every recommendation that a consultant might make. But I don’t doubt his ultimate goal, which is keeping the farmer on track and in business.

I know a lot of growers are being advised to drop their consultant and are getting offers for free scouting and recommendations for their farm.  Bottom line: free scouting means the person making the recs doesn’t work for the grower. They work for someone else. All that said, I’m sure in favor of capitalism. Our economy is driven by a company’s right to sell and make money. It’s the farmers responsibility as a businessman to sort through the offers and hype and make choices that benefit him, his family and his employees. Sometimes they just need a little help making that decision.

Also, I know plenty of guys in dealer organizations that scout and provide recommendations who provide responsible services to the grower and have a deep understanding of how and when to use crop protection materials. They really do a great job.

Ultimately, farmers must remember that they are consumers and the choices they make are their own responsibility.

Second, be diligent. As you make decisions in 2016, do your homework when someone recommends a new product or program. Look for hard data on every material you use, whether it’s something to protect the crop or provide plant nutrition.

The internet, of course, has revolutionized the way we can research the finer points of crop production. When on line, make sure your info comes from reputable sources, with conclusions and guidance based on thorough science, not just on an unnamed plot here or there.

At the field level, ask yourself questions over and over. Is that herbicide the one that will kill those “dang” pigweeds? Will that insecticide control the bugs that are turning up? Does that “stuff” really increase yield on my crop? What do the University folks say about a given product?

Third, keep your budget handy. Carry a paper copy in your pickup or regularly upload the electronic file to your tablet. When somebody recommends adding another $2 an acre to a spray, plug that into the spreadsheet and see what effect it has across the number of acres being lined up for a treatment.

That, in itself, can be a reality check.

Here’s one more reality check: if somebody says that an add-on product “will only cost $2 an acre,” pull out your smartphone and check the commodity market at that given point. It’s not like those numbers will go up much this season, so ask yourself if you really can afford another $2 an acre.

At the risk of showing my age, I remember the TV show Kung Fu. The hero’s wise old mentor used to say: “Choose wisely, Grasshopper.”

My words exactly.

 


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