If you’re running a farm yourself or managing someone else’s operation, yes, you’re a farmer, but you’re also a businessperson. After all, whether it’s a smaller, family-owned venture or a larger, corporate enterprise, the end game is some form of profitability.
In the wake of highly fluctuating commodity prices over the past 8 to 9 years — with higher prices and returns from 2009-2012 and lower, but more stable prices over the last 4 years — researchers at the University of Illinois set out to examine characteristics of farming operations that exhibited slightly higher returns.
The focal point of this analysis was to answer this question: “Whether there exist management strategies that consistently result in success?”
With data from the Illinois Farm Business Farm Management (FBFM) association, they identified farms that have had higher returns, relative to their peers, over both the high/rising return period and the recent low/declining return period. Their analysis suggests that certain farm operations do consistently outperform their peers.
For our No-Till Farmer audience, I think you’re going to find some similarity between these characteristics, your methods and how you’re making daily decisions.
- Farms earned higher returns through a combination of higher corn and soybean yields, as well as receiving slightly higher prices, than farms in the lower return groups.
- Higher return farms also tend to have better cost control across all main categories, including direct costs categories like seed, pesticides and fertilizer. For equipment costs, high return farms tended to have lower machinery depreciation and repairs per acre.
- Other characteristics of higher return farms were larger size and they tended to use less corn-intensive rotations than their lower return peers within the same region.
The study also found that devoting time to management decisions related to input use (seed and chemicals) and having appropriately sized and well-maintained machinery tend to stand out as the most consistent factors associated with higher return farms.
Of the three main factors listed above, the toughest variable to control is yields. Let’s face it, all of your planting, treatment and harvesting decisions still rely on the whims of Mother Nature. But of the other two factors, controlling input costs and crop choices, no-tillers have a wide breadth of options available. And let’s not rule out the general no-till rule of lower machinery and fuel costs that are in your favor.
We know you already spend a great deal of time and effort deliberating over your seed and chemical input uses, as well as keeping your machinery in top form, so hats off to you for continuing your quest for success.