Grain Production in Low Margin Years

Producing grain in years when profit margins are low can be extremely challenging. This year it will be hard to produce grain crops and end up with a positive cash flow.

Soybeans currently have the highest potential to be a profitable crop this year over corn or wheat. There are estimates currently that put the cost of production for corn at $4.20 to $4.60 per bushel and the cost for producing soybeans at $9.20 to $9.60 per bushel. Producers need to know what their costs are. Production costs vary considerably from farm to farm.

Timing of operations has a very large impact on the final yield and the final cost of production. Planting date is key to higher yields. The optimum date for corn planting is between May 1 and May 10.

Potential yield decreases by a bushel per day on May 10 and increases up to a loss of 2.6 bushels per day on June 1. Planting equipment needs to be ready to go. Today there are fewer farm equipment dealers which means repair parts are located further away.

Producers should have an inventory of repair parts for the common repairs that may be needed during planting. Another option would be to work with the equipment dealer and see if they have a person on-call who may be available nights or weekends to provide parts from a dealership.

Soil fertility is an area where it will be important to place your input dollar where it will do the most good. Soil testing is essential to determine what your key fertilizer needs are.

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