January 10, 2014
According to The Economist grain prices in 2014 will drop by 14%. At the same time the last report of European Commission says that the experts do not expect price increase on agriculture products in the next decade. So, these two organizations tell us that we should not expect the prices increase. USA statistics shows the farmers sells their grain at approximately the same price.
This leaves the only option for farmers – find the ways to decrease the cost of production. We already discussed this possibility many times and maybe I’ll repeat myself, but like old Russian proverb says: “Repetition is the mother of all learning”.
Let’s assume that you already have optimized technology and all necessary supporting equipment.
Strategically, the biggest impact on cost reduction is the yield increase. Besides the mother nature, the most important factor here is a timelines of your operations and inputs. That is why it is extremely important to get a right advice first of on seeds:
- Potential yield (not only average)
- Potential/desired output content (protein, starch, fiber, oil, etc.)
- Rate of planting (spacing in the field, XYZ) as a function of yield
- Rate of fertilizing for each growth stage (spacing in the field, XYZ) as a function of yield, desired crop properties, soil properties and structure
- Rate of irrigation for each growth stage (spacing in the field) as a function of irrigation type, yield, desired crop properties, soil
- Rate of chemical control for each growth stage (spacing in the field) as a function of chemical type (systemic/contact), diseases (type, spread, stage), weeds (type, spread, stage), and insects (type, spread, stage)
- Potential yield losses as a function of planting speed, harvesting speed, and deviations from the optimum planting rate.
Besides mentioned above data you need to have a capability to monitor soil properties, growth stages, diseases, weeds, insects via remote sensing and timely interpret the acquired data.
The fertilization optimization has the equal impact on cost reduction and the yield increase. Majority of consultants will give recommendations for nutrients in terms of required acting matter per area. But actual type of fertilizer, equipment, placement is another story. And it requires rigorous optimization in terms of cost not only fertilizer, but application itself and delivery.
After that comes equipment. In spite that equipment usually presents only 5% out of all farmers expenses, it is an enabler of technology implementation and the cost reduction.
Correctly configured and reliable equipment allows:
- Increase productivity and improve operations with path planning, autoguidance, performance optimization, 24-hour operation;
- Lower operational cost (computerized mission planning and programs of applications preparation, automated optimized equipment work, improved monitoring, failure prediction and prevention);
- Reduce workforce (automated equipment work, improved monitoring);
- Lower clerical and professional cost (computerized farm and fleet management, access to out-sourced agricultural services via Internet);
- Reduce facility management cost and improve asset utilization (optimized fleet size, storage size, and pre-scheduled delivery on time, improved monitoring of resources);
- Improve decision making due to availability of information and possibility to play “what if’s;
- Improve resource/inventory control;
- Improve organizational planning for maintenance, delivery, work/operations schedule;
- Improve organizational flexibility;
- Utilize more timely information for computerized planning, monitoring, and updates;
- Increased organizational learning using documented records of work, possibility to play “what if”;
- Attain Legal requirements constantly updated via Internet.
I hope these tips will be useful for you to update your knowledge base and start preparation for a new planting season.
So, let’s stay connected and let us know what would like to discuss next.