Planning for 2013

Planning is something that we all talk about but don’t always sit down and do. It used to be in agriculture that planning was not all that critical if we did things as we have done them before. The business is changing. Planning is essential to reduce costs and have the products that we require available to us when we need them. Crop inputs are a big part of growers operations. Each season, growers will spend between $150 to $250 per acre cash to get a crop to harvest. Timing the purchases is critical to ensure that the dollars a producer is spending are going to the right place and be used to for their best potential. To do this, planning is essential. Fertilizer is one example where planning is critical. History says that in 8 out of 10 years, the price of fertilizer will be higher in the spring. What this has meant to growers is that fertilizer needs to be purchased in the fall to get the best bang for your dollar. For certain, the last ten years have been an example of this. We have seen the price of fertilizer collapse in the spring, but the average pricing over the last ten years has put dollars in a grower’s pocket. To be able to price fertilizer in the fall, a producer must have bins that can store fertilizer or have a dealer that is willing to store fertilizer till the spring for them. Because most producers use blends of various fertilizer products in their fields, the acres to seeded for each crop and the amounts of fertilizer to be used in each field needs to be determined in the fall to get close to what will actually happen in the spring. The planning to do this needs to be done by now. Product s that could be in short supply in the spring may need to be purchased now. Canola seed is an example of this. There will be canola seed available in the spring. The issue will be what varieties will be available. If there is a variety that fits on your farm, it probably works on your neighbor’s farm. This means that booking seed now will allow you to get the variety that you want in the spring. Booking now also provides cost savings to growers that take action early. There are discounts offered for early commitment to a variety. It seems early for planning next year’s crop for most growers. Ten to fifteen years ago I would have agreed that it was too early but now with the changes in the marketplace, producers need to be buying some products or committing to others. Making decisions now will reduce your costs next year and will guarantee that you have the products you need when you need them.

 

 By Dave Cubbon, P Ag