Playing Defense
Countdown to the start of the '24 growing season has begun. We've learned that each year has its own unique set of challenges and surprises. Just like a sports Team prepares specifically for a given opponent, we bring that nuance to our planting season plans. At the top of our anxiety list are below normal subsoil moisture and low commodity prices. While we can't make it rain or manipulate the economy, we can make adjustments that improve our margin under adverse conditions.
In the past our input strategy has been offensive, swinging for the fence with ever higher input levels in an effort to realize higher yields. Premium seed genetics cost $300-400/unit for seed. This equates to $130-160/acre seed expense. We've lowered our average population by more than 10% relative to prior years by being more strategic in our seeding rate. This change alone reduced our breakeven yield by four bpa while allocating enough seed to equal our previous best.
We've shifted our nitrogen program towards NH3 and liquid N while using less urea. Urea works great when rainfall is adequate. However, it needs a minimum amount of rainfall to translocate to the roots. Last year, urea underperformed. Until we are confident this dry spell has passed, we will use N sources less rainfall dependent. Price favored this shift as well. Hog manure still plays a large role in our fertility program. As manure is mostly fall applied, it has a longer opportunity to move into the root zone. Extra bonus, it costs less and outperforms commercial fertilizers.
A silver lining of the dry weather is improved productivity. Having done more work last fall than normal and expecting an early spring with fewer rain days, we believe we can meet our production goal with fewer operators. Additionally, due to our short crop, we have significantly less grain to deliver this summer. The net result of these factors is we hired three less H2A workers than last year. Leadership may have to step it up a bit to close the gap. As we are all on salary, our CFO should be pleased with the labor savings.
In years when planting is delayed, getting seed in the ground at the first opportunity takes priority. Under these conditions we would apply herbicides post planting. The risk is surface applied herbicide needs rain to activate. This year, thanks to favorable soil conditions, we will apply herbicide pre plant and incorporate. This practice is less rainfall dependent and spreads out our spring workload.
These are several examples of how we have optimized our '24 plans based on the current environment. If the weather is perfect and prices recover, we may leave a few dollars on the table. On the other hand, if growing conditions are less than ideal or low prices persist, our defensive posture will be rewarded.
Are we starting to act like our parents? 😉
Jim