The Benefits of Crop Input Reallocation

How to Survive and Thrive in a Down Economy

As an ag lender and Vice President of Farm Credit MidAmerica, Brett Anderson knows how low commodity prices have impacted farmers. As a farmer and Maximum Farming System user, however, he’s seen how opportunities can still be found, despite the tough market conditions. The fundamental market indicators shaping today’s ag economy, by and large, point to negative moods on the farm. Commodity oversupply and rising interest rates lead the mood-setting factors, but with proper management, Anderson is thinking beyond farms surviving. He says thriving can be closer to reality than most people believe. 

Help with Management

Anderson says that Ag Spectrum and its Associates and Managers can help you manage through these times. Anderson projects crop inputs to account for 42% of production budgets from 2018-20. Knowing how those inputs can directly relate back to return per unit produced can set you apart as a producer, he says.

As a producer, I want to know how suppliers can make my life easier. That’s what I’m focused on,” Anderson says.

“I will admit, it’s a lot tougher to lend money to farmers today than it was in 2012,” he says. “There are a lot of challenges, but the opportunities are still so vast. It’s a great opportunity for me as a lender to provide feedback to these farmers. 

“I looked at my father’s budgets compared to mine, and he still uses a very traditional program, not the Maximum Farming System. But just with my commercial fertilizer savings for 2018, I had a $62/acre savings on corn and $36/acre on soybeans.”

 

Providing Insight

“Everything Ag Spectrum does, from educating producers about the research that’s behind the system, to how we analyze soils and evaluate the system with the Maximum Farming Reports, is about providing insight to our customers,” says National Sales Manager, Eric Sherwood. “It feels empowering that we can provide that kind of information in this farm economy, because it’s not something very many suppliers offer. This is a great time to show how we are different.”

That insight is what led Anderson to the system for his own farm in east central Indiana. Anderson’s Associate, Kevin McFarland, worked with him to compare the efficiency of the Maximum Farming System to his conventional system.

“I didn’t want to buy equipment or change anything, because my planter was not set up for no till. I always thought the more fertilizer you put on, the bigger the yield. That was the old school theory I believed. That was my hesitation and I’m sure many farmers have similar hesitations.” That hesitation and any sense of buyer’s remorse were quickly allayed when he looked at the returns from yield increases and cost savings on the System. 

“In two years, I have been able to recover my capital outlay. My capital outlay was somewhat conservative. I did buy a planter and had to buy some tanks. It was still a lot of money to me. I looked at my father’s budgets compared to mine, and he still uses a very traditional program, not the Maximum Farming System. But just with my commercial fertilizer savings for 2018, I had a $62/acre savings on corn and $36/acre on soybeans. So, again, in tough times, Ag Spectrum can delver great value. $62/acre is huge!” 

Efficiency Calculator Sold Him

As a banker, Brett Anderson keeps his budgeting pencils pretty sharp. As he was considering adopting the Maximum Farming System on his own farm in east central Indiana, even he was surprised how sharp that pencil could get. 

His Ag Spectrum Associate, Kevin McFarland, led him through a budgeting exercise comparing his conventional fertilizer program to the Maximum Farming System. The numbers tell the story even as the ag economy continues to provide challenges for farmers. 

Anderson, who has run the numbers on the Maximum Farming Cost Efficiency Calculator comparing his old system to the Maximum Farming System, is saving a 
lot of money. For 2018, Anderson says he is saving $62/acre on  corn and $36/acre on soybeans. 

“We are asking people to do a lot of things differently. So, the more we can assist farmers and their key advisors in a greater understanding of what we provide, the more likely they will want to try what we have to offer.”

 

“I feel a great tool to use is Ag Spectrum’s Cost Efficiency Calculator”, Anderson says. “It tells you the true cost of production. It tells you OK, what’s maybe a little too high. You can provide feedback, and when I say to trend your data, you can help your operation. This is an excellent tool that I hope most of you are using.”

“Those clients can then give it to their lenders and say, ‘here’s my cost of production for my corn and this is why I’m doing this system.’ These are the decisions I’m making, because I guarantee you that if a guy goes to his banker and says, ‘I’m not putting dry fertilizer on my acres,’ that lender is going to say ‘wait a minute, that’s not going to work,’” Brett said.

“Helping customers better understand their costs is exactly the reason the calculator was developed,” says National Sales Manager, Eric Sherwood. 

“We are asking people to do a lot of things differently. So, the more we can assist farmers and their key advisors in a greater understanding of what we provide, the more likely they will want to try what we have to offer.” 

“The Maximum Farming System is about production efficiency. Total yield is important, but it’s not more important than understanding your cost of each unit produced. Farmers can throw all kinds of money at a crop and it may or may not increase yields. But if it costs five bushels to get an extra bushel or two yield, that doesn’t make sense. That’s what we can help determine by using the Cost Efficiency Calculator, which provides valuable insight that others don’t provide.”