Agri-Brief: The Price Is Right for Higher Yields

AGRI-BRIEFS
AGRONOMIC NEWS ITEMS

From Agronomists of the
Potash & Phosphate Institute
655 Engineering Drive, Suite 110
Norcross, Georgia 30092-2837
Phone (770) 447-0335

Winter 1996, No. 2

THE PRICE IS RIGHT FOR HIGHER YIELDS

Spend money to make money...right? Absolutely. After all, farming is an investment and obtaining a return on that investment is what it is all about. Just like the stock market, the goal is to invest wisely. So how do we invest wisely in farming? Invest in higher yields.

Profit is the difference between the total return from sale of the crop and the costs, both fixed and variable, of producing that crop. It is what is left over after all the bills are paid. If nothing is left over, there is no profit. Think of profit as a pie and costs as slices taken from that pie. Higher yield gives a bigger pie to work with and greater opportunity for more leftovers.

Total return is the product of yield and price. Some years prices are great and some years they are not so great. The question is, what can growers do to increase total returns? Unfortunately, they seldom have much say about price. Market factors such as supply and demand, government farm programs and so forth basically determine crop price. Price may be influenced by quality, but within a specific grade, price is, as previously stated, out of growers' hands in most situations.

Yield level significantly influences total return. The greater the yield...the greater the total return. This is the area where growers can dramatically make a difference and why best management practices...BMPs . . . are so important.

BMPs are those practices aimed at optimizing yield. Some require more cost, such as additional fertilizer or more total irrigation water to reach a higher yield goal. Others cost no more or little more than previous practices. Examples of low cost inputs are selecting improved seed and planting to a higher plant population. Good management decisions are no cost inputs that can significantly increase yield. For example, changing the planting date to a more optimum time for a specific variety or adjusting equipment for more precise and uniform application of fertilizer are no cost inputs.

High yields obtained through BMPs have additional benefits beyond more profit. They also protect the environment because:

Efficiency of inputs such as fertilizer and crop protectants is increased.
Earlier ground cover is achieved which decreases erosion hazard.
More crop residue is produced which increases water infiltration when residue is incorporated. Erosion hazard is also reduced.
Greater root development reduces erosion potential.
More yield per acre increases freedom to idle fragile acres.

High yield management involves careful investment of inputs. Done properly, the return can be substantial. If not, potential profit is lost and risk is actually increased because all controllable inputs are not being properly managed...some are being left to chance. There will always be risk involved in farming from factors beyond our control. But let's be sure to minimize that risk by managing those factors that are, in fact, manageable.

The price is always right for higher yields...with BMPs.