Put Marginal Acres to Work to Find ROI in 2024 

 

Lower commodity prices paired with higher input costs paint a dismal 2024 farm income picture that may have many farmers tightening their belt. The December Ag Economists Monthly survey reported the largest drivers of market pessimism to be declining commodity prices and “complicated” production costs that include high interest rates, as well as the inverse relationship between commodity production and demand.

What’s clear for farmers in 2024 is the need to maximize the return on investment of every input.

Bert Riggan, Director of Agronomy for Missouri-based Concept AgriTek, shares that there has never been a better time to reevaluate marginal production acres, offering that those soils may be low hanging fruit for your 2024 budget.

“Love your poorer ground and it will love you back,” Riggan says. “You can experience much greater gains by giving your marginal ground a little bit of extra love—digging into those soil tests and understanding what is needed. It will pay more than trying to add extra inputs to bump yield on your better ground.”

Yield vs. ROI 

While yield is on the mind of every farmer that plants a seed in the spring, the simple truth is that yield doesn’t always equal profitability.

Iowa-based farmer, Kelly Garrett, owner of Garrett Land and Cattle and co-founder of XtremeAg.farm, says that instead of concentrating on how big the pile of corn or soybeans is at the end of the year, he would rather focus on the pile of money, and to do that, he prioritizes his poorer ground.

“The good ground will take care of itself. It’s already paying the bills,” Garrett says. “Go prioritize your time on the poor ground and improve that ROI—that’s where the bigger pile of money is going to be at the end of the year.”

Understanding the skepticism some may hold for an Iowa farmer’s declaration of “poor ground” Garrett says his relative approach to soil health is an area of the operation all farmers should be investing time and resources in understanding.

“I can have 90% calcium in some of the soils I farm. Good, perfectly balanced soil has around 65%. And because my calcium is so high, the phosphorus gets tied up. My parts per million of potassium might be 300 but my base saturation potassium might be 1.8. It’s high because it’s tied up; that’s the point we need to stop fertilizing and start amending. Sulfur is an inexpensive soil amendment,” he says. “If you fix the bad spots in the field, it’s easy to raise the average.”

Riggan says that a sound strategy for farmers to consider as we head into #plant24 is an assessment of yield map shortcomings from the 2023 growing season backed up by soil tests. Because the needle is harder to move on higher yield averages.
“If you’re a 300-bushel average corn farmer you have to dig hard to find the next advantage. But if you’ve got ground that’s doing 180-bushels an acre, that’s an opportunity where if you only bumped your average to 220, that could be a huge increase in profitability,” Riggan says. “If you really want to be serious about maximizing ROI, you can’t take one fertility program and stretch it across all your acres.”

Put Tools to Work 

Today, the tools in a farmer’s “toolbox” far surpass what was available even two decades ago. The understanding of soil health has grown exponentially as have a farmer’s ability to dial-in applications.

Thanks to those tools, acres aren’t a part of Garrett’s 2024 strategy, rather he’s looking at 12-foot by 12-foot areas of his fields and offers that his preference would be to manage on a 12-inch by 12-inch grid when the technology allows. The mapping helps Garrett to continually change the rate of anhydrous and seeding population, applying more fertilizer, and increasing the population where the soil will support it.

“All of the tools that are available today really give us the opportunity to dial in and address the greatest limiting factors,” says Riggan. “The whole goal is to spend some time on marginal ground, get some solid advice, see what kind of extra love you can provide, and start moving in the right direction.”

 

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