Recent fluctuations in the commodity markets and input prices have left farmers wondering whether to purchase next year's inputs now or wait to see if prices drop.
Regardless of the price fluctuations, there are several things grain crops producers can do now for the next growing season to better manage costs in their agricultural operations, says Chad Lee, grain crops Extension specialist in the University of Kentucky College of Agriculture.
When deciding which crops to grow next spring, farmers can do partial budgets with current prices to identify costs and potential returns. But given the volatile markets, the best option is to maintain crop rotations. Both soybean and corn yield better when annually rotated. However, available credit and cash flow may be the deciding factors for which crops are grown in 2009.
No matter which crop producers plan to grow, soil testing likely will be beneficial.
“Probably the easiest thing a farmer can do to save money on input costs is to have a soil test done and fertilize according to UK recommendations,” he said.
Soil testing can prevent producers from over-spending and over-fertilizing their fields. The college's publication on fertilizer and nutrient recommendations, AGR-1, helps producers determine the most economical amount of fertilizer required to get optimum yields. The publication is available at local Extension offices across the state and on the college's Web site at http://www.ca.uky.edu/agc/pubs/agr/agr1/AGR1.PDF.
If a farmer has decided on a crop, then purchasing seed before Jan.1 should offer price advantages. Some producers may also find buying seed this year to be advantageous on their taxes.
With much of the Midwest dealing with flooding conditions this past spring, there was some concern this summer that seed supplies may be low for some corn hybrids. Lee said he hasn't heard any more about these concerns since this summer and believes seed supplies are at normal levels. However, buying early will better ensure producers get the seed they want.
“If you wait until after Jan. 1, you may have a tough time purchasing what you want,” he said.
Each year, UK's hybrid and variety trials demonstrate that selecting the right hybrids and varieties can make money, while selecting poor varieties and hybrids will lose money. During this year's corn hybrid variety performance trials, there were no distinct yield advantages with stacked traits. Some hybrids with multiple stacks yielded very well, while others did not.
When selecting hybrids, producers need to consider the entire genetic package of the seed and not base their decisions solely on stacked traits. Producers can save money when purchasing hybrids by only buying the traits they need. They should use as much good information about hybrid performance as possible in decision making.
Preliminary findings of the trials can be found on the UK grain crops Extension Web site at http://www.uky.edu/ag/graincrops/varietytrials/2008cornprelim.htm. The findings may help producers determine which seed to buy for next year, Lee said.