Increase Tonnage and Feed Quality

By: Dan Peterson, Regional Agronomist

 

How do we grow healthy, resilient forages which will maximize milk production or rate of gain, while maintaining the soil? AgroLiquid has studied these challenges and we have solutions to address not only the macronutrient needs of alfalfa, but also provide the essential secondary and micronutrients to bolster plant strength, reduce time between cuttings, and improve feed digestibility. This, in turn, has been shown to increase alfalfa tonnage, improve feed nutritional quality, and improve milk production as well as rate of gain. Potassium and Forage Quality Potassium (K) plays a large role in the yield and quality of forage crops. Potassium plays a key role in the photosynthesis, respiration, translocation and many enzyme systems in plants, and also increases disease resistance. For alfalfa, K strongly influences yield, and improves the level of carbohydrates stored in alfalfa roots which results in greater stand persistence.

The most common source of potassium fertilizer is potassium chloride, a pure salt. It’s well known that high rates of potassium chloride often create a chloride toxicity, particularly where significant soil chloride levels are already present, which is often the case where manure is spread. Excess chloride can also reduce plants’ uptake of other vital nutrients like nitrogen, sulfur, phosphorus, boron and others, which often takes a heavy toll on yields and forage quality. The very high salt of potassium chloride can also lead to reduced soil microbiological activity and poor germination of new seeding.

Liquid Fertilizer for Alfalfa, Tonnage and Feed Quality Study

AgroLiquid’s alfalfa fertilizer program yielded:

  • 40% more milk per acre
  • 37% more yield per cutting
  • 6% lower lignin
  • 5% more protein
  • 4 days quicker to maturity

 

Can I Mix?

By: AgroLiquid Research and Development Team

 

“Can I mix fertilizer A with fertilizer B?” This is a big deal in agriculture. We know we need to make
hay while the sun shines and when it’s time to go — it’s time to roll! No one wants to be slowed
down because a bad mix has gummed up the works. AgroLiquid spends a lot of time making sure
the products we call compatible won’t cause those slow downs. But, before we delve into this
topic, let’s set some ground rules on what can be described as “compatible:”

  • It mixes into either a clear solution with no solid fallout (ideal) or a suspension where the suspended material can stay suspended for longer than a few days. If the suspendant falls out of solution, it can be easily agitated back into suspension.
  • When mixed, it does not produce any gas such as ammonia or carbon dioxide. Off-gassing like this changes the materials in the mix, and not usually in a good way.
  • When mixed, the solution doesn’t get very hot. This can be dangerous!
  • When mixed, it does not produce a fallout of solids. This could drastically change the analysis of the remaining solution.
  • It can be used in farming equipment without plugging filters, screens, or nozzles.

One reason for our superior compatibility is due to our Flavonol Polymer Technology. This proprietary technology acts as a chelant or encapsulation agent, and keeps the different compounds in solution from reacting with each other, resulting in an inert, clean mix. This may not be the case with products that use acetates, citrates, or amino acids as their chelating agents.

Another reason is the fact that most of our products have fairly neutral pH. Attempting to mix products that are alkaline may result in either the production of gasses, heat, and/or significant fallout. Care must also be taken with acidic products, especially when being mixed with alkaline products.

To help prevent unnecessary headaches, always perform a jar test. We cannot stress this enough! This is especially
true when adding agrochemicals; there are many off-brands that use different additives and carriers that can cause
adverse reactions. Remember: there is always a chemical reaction when you do a jar test, so proceed with care!

If a fertilizer product (AgroLiquid or otherwise) is to be used in fertigation, we also suggest that growers submit
water samples to an accredited lab for analysis, specifically for pH, hardness, and bicarbonate. Most alkaline or hard
irrigation water will cause fertilizer products to react and gradually create a buildup of fallout in lines and emittors.
This can be solved by neutralizing your water with a sulfuric or carboxylic acid injection system.

If you still have questions, such as “can I mix fertilizer A with fertilizer B?”, do not hesitate to contact your AgroLiquid representative. We are here to support you and your operation.

Your Crops are Talking. Will You Listen?

By: Stephanie Zelinko, Field agronomist

As hard as we try to get everything right at planting, many things can occur that may cause a crop to lose yield potential. Too much or too little moisture, insects or weed pressure, so many things can cause crop stress. Signs of stress, such as leaf yellowing or stunted growth, are how your crop talks to you. Learn to recognize what these signs mean and what you can do to support your crop yields.

The Tools

From boots-on-the-ground field scouting to aerial imagery, there are many tools at our disposal to help identify and recognize these signs. One of the most economical is a tissue test analysis. This in-season snapshot provides a quick overview on the health of your crop. After soil testing, the nutritional tissue test analysis is the most important tool to understand what is happening in the plant regarding the nutritional effects on its physiology. Plant tissue analysis is the best way to identify the actual nutrient status of a plant.

Tissue tests can be used to help determine the next steps of a nutritional program to more accurately apply in-season fertility. It’s also a great tool to help diagnose visual symptoms being seen in the plant or provide early detection of hidden deficiencies in the crop. It isn’t always easy to identify the real cause of a problem in a crop. This is especially true when trying to decipher if it’s a disease or a nutritional deficiency – or both.

It is important to keep in mind that the plant analysis is just a snapshot, a certain point in time, of the nutritional status of the plant. Because plant physiology is dynamic, it is necessary to compare plant analysis results with what we expect to see in a plant at that growth stage. The tissue test analysis is almost like a mid-year report card. How does your crop nutrition plan look, graded against the best in the class?

Addressing the Problem

Once a nutrient deficiency is identified, you have to decide the next best step. There are many options. First, look for patterns in the field. Is the deficiency related to a drainage issue? Were there  inconsistencies with  the planter fertilizer application? It’s important to consider all factors to make an informed decision.

Depending on the deficiency, foliar applications with liquid fertilizer is an effective method for quickly solving nutrient problems appearing in many plants. Since it is applied directly to plant leaves and absorbed through the plant’s stoma, foliar applications can move quickly through the plant’s leaves into the plant, improving health of the crop and yield.

If a rescue treatment is not feasible or economically sound, perhaps it is time to adjust yield expectations and management plans for 2021.

Invest Your Time

It’s important to invest the time to listen to your crops. Recognizing these nutrient deficiencies not only benefit your crop nutrition plan, it helps ensure the return on investment of all inputs, including seed, fuel, crop protection, as well as fertilizer.

As always, if your crop is not reaching its full potential, or the same problems keep appearing, contact your crop nutrition expert to help investigate potential nutrient deficiencies. We’re here to help you develop a crop nutrition plan to meet your yield goals.

Expect the Unexpected

By: Galynn Beer, National Sales Manager

 

In agriculture, we are used to dealing with uncertainty. Weather, markets, the level of uncertainty
that exists in our geography, all are factors in making crop input decisions. Trade wars and
tariffs, along with Market Facilitation Programs (MFPs), have been harder to predict and factor
into decisions and has caused some frustration. But we’ve persevered.

Agriculture Presses On

While much of the country, and world for that matter, ground to a halt as a result of COVID 19, agriculture presses on. Farmers continue to quarantine themselves in their tractors and isolate themselves in fields. The one thing to
remember is that COVID 19 is not transmitted through the phone while sound advice can be. Technology provides us a mode of communication that delivers access to resources of expertise and inputs.

The Weight of Uncertainty

With all of the financial news being reported, a great deal of uncertainty exists. This can cause farmers to go in to survival mode and want to scale back input costs to a minimum. Emotionally charged decisions may override rational business decisions. AgroLiquid has personnel that ranks at the top of the industry when it comes to
making recommendations and matching fertilizer needs to expectations and economic conditions. While there won’t
be room for frivolous spending, a nitrogen only program—which I would consider a survival decision—won’t be the answer either. AgroLiquid aims to add value through guidance from trusted advisors. Someone who is a step removed from the weight of uncertainty can provide insights to help fight off the risk-averse tendencies that creep in with unanticipated risk. The AgroLiquid team can help in a couple of ways:
1) we have a culture of constant improvement to elevate our skills for times like this and
2) we want the farmer to be able to emerge from the uncertainty as an entity that will be on-going… surviving and producing profits for years to come.

As a result, it is in our best interest to make fertilizer recommendations that are in the grower’s best interest. We are
used to balancing the expense of crop nutrition with expected revenue, which accounts for current risk.

Evaluating Risk

In times like this, normal risk-takers can turn very conservative. And it is a sound practice to evaluate levels of risk. But as unexpected as this virus and all of the negativity has been, there are often surprise glimmers of opportunity. I’m sure the toilet paper industry never forecasted the demand they are experiencing! Many businesses have been affected. Virtually every aspect of the economy that generates tax revenue for local governments are going to take a serious hit. We’ve seen the Fed set a target Fed Funds rate of 0% in order to make risk-taking less costly. The potential exists for us to see significant spend packages to jump start the economy once the impact of the virus has subsided. I wouldn’t be surprised to see some quantitative easing as we did after the housing bubble burst, which is just the Fed buying back longer term securities to hold on their balance sheet and replaces those securities with cash in the economy to be spent. These actions could devalue the dollar, which then can prop up commodity prices and
make our agricultural products more affordable for countries like China. If indeed we see a bump in prices, it will likely be delayed; in other words we’ll have to wait and deal with added uncertainty in the interim. But if a producer faced with difficult decisions cuts too many corners, and then commodities rally to better levels, there won’t be the optimum production to capitalize on the opportunity.

The Path Forward

You’ve heard it before, but we are in unprecedented territory. While quantitative easing could help lower the value of the dollar, currency is still comparative. This means if other currencies don’t come up compared to the USD, then there won’t be much of a benefit. Also, demand will matter and it is difficult (impossible) to know what the consequences of most of the world hiding in their houses will do to demand for commodity products, even once recovery starts. A case can be made for a rally at some point in the future, but it’s hard to predict to what levels we could expect if it does. However, a scenario does exist that a rally could occur that is hard to imagine today. Rational thinking that can weigh the potential for an upside can be an offsetting entry for the brain to balance the thoughts that it will be a long free fall; it might not be.

Your AgroLiquid Team

Agriculture is generally counter-cyclical to the rest of the economy. Agriculture often benefits from the government
spending our way out of a recession. So, as you manage through this season, make sure that the irrational behavior
that is occurring around you doesn’t lead to a bunch of ill-advised decisions. More surprises may be lurking, but we
will emerge. Outside guidance on crop nutrition from the AgroLiquid team can help buffer emotions as the growing
season is thrust upon us. AgroLiquid can add value that extends beyond the nutrients we manufacture. Incorporate outside opinions from a variety of experts to make rational, business decisions in an environment that is loaded with emotion.

Potassium and Forage Quality

Potassium and Forage Quality

Dan Peterson, Field Agronomy Manager

 

The subject of forage quality and its relationship to cow health and milk yield is a fascinating, yet highly complex subject. In the Midwest, Northeast, and West, dairy forages are primarily alfalfa and corn silage; Other crops, such as pea and oat mixtures, also play a role. Grass forages, including the various sorghums, play a larger role in more southern areas where it is difficult to grow alfalfa. What are the factors involved in producing high quality forage? One factor that should not be overlooked is fertilizer and soil fertility.

 

AgroLiquid is actively researching how fertilization practices influence forage digestibility and quality. Why digestibility? Think of a cow as a milk “factory”. The primary factor that limits production is how much “raw material” the factory can process each day. So, for example, if our “milk factory” can consume a maximum of 85 pounds of feed per day, the amount of energy and nutrients contained within that 85 pounds that the cow is able to extract and utilize is what determines how much milk that cow can produce. Differences in the amount of energy extracted (how digestible the feed is) directly correlates to the amount of milk that factory will produce. Why not just feed the very highest energy feeds possible – grain and fats? The answer is that cows are ruminants, having multiple “stomachs”. Their digestive system uses bacteria and enzymes to digest fibrous plant material. For their digestive system to work properly it must have large amounts of digestible and indigestible fiber. Fats (like vegetable oils) largely pass through this system undigested. This system is also limited to how much non-fibrous concentrate (grains) it can handle. Why is alfalfa so important as a dairy cow forage? The reasons include its overall yield, higher digestible energy content compared with grasses, its high levels of usable protein, and its mineral nutrient content including the critically important calcium (why milk is a great source of dietary calcium).

 

Of the three macronutrients, nitrogen (N), phosphorous (P), and potassium (K), potassium may the least understood in how it influences forage digestibility. Potassium plays a large role in the yield and quality of forage crops. Potassium plays a key role in the photosynthesis, respiration, translocation and many enzyme systems in plants, and also increases disease resistance. For alfalfa, potassium is a dichotomy of sorts. It strongly influences yield, but only to a point – I will discuss that in greater length later in this article. Other ways it is important include improving the level of carbohydrates stored in alfalfa roots. Greater stand persistence is a result.

 

Maximum alfalfa yields are usually reached with potassium concentrations in midstem samples of 1.25 to 1.75% and in the top six inches of the plant of 2.0 to 2.5%. Higher concentrations are undesirable in alfalfa because it reduces calcium and other element concentrations, thereby adversely affecting the cow’s utilization of the forage and increasing the occurrence of “milk fever” after calving (an acute deficiency of blood calcium). The way it happens is this: As dairy cows enter the lactation stage “freshening” prior to calving, large amounts of calcium leave the cow’s blood and enters the milk she is now producing faster than it can be replaced. This decreased calcium concentration in the blood lowers the blood pH, causing nerve disorders, muscle weakness, loss of appetite, paralysis, and subsequent death if not treated immediately. The rations for freshening cows should therefore be relatively anionic (lower in potassium) in the month prior to calving to raise blood calcium levels. But, having a steadily available supply of lower potassium alfalfa is difficult because producers often fertilize for high forage yields with potassium chloride fertilizer without regard to actual soil test levels, and in trying to maximize alfalfa yields. Through soil testing, lower potassium concentrations in forages are possible by avoiding building soil potassium to higher levels than necessary and using careful fertilization practices.

 

The most common source of potassium fertilizer is potassium chloride, a pure salt. It’s well known that high rates of potassium chloride often create a chloride toxicity, particularly where significant soil chloride levels are already present, which is often the case where manure is spread. Excess chloride can also reduce plants’ uptake of other vital nutrients like nitrogen, sulfur, phosphorus, boron and others, which often takes a heavy toll on yields and forage quality. The very high salt of potassium chloride can also lead to reduced soil microbiological activity and poor germination of new seeding.

 

According to David Weber writing in the Progressive Dairyman, “Particularly in fresh cows, research shows how alarming forages high in chloride can be for performance and health. In fact increasing levels of chloride in lactating diets has a negative effect on feed intake and milk production. To avoid these pitfalls, diets must be formulated to account for the variability in forage chloride levels to optimize milk production. Chloride is continually recycled on the dairy. Potassium exits the farm in many avenues, including in the milk. Chloride, though, is left behind in manure and applied back onto the fields. The rising chloride levels and the continuous potassium chloride fertilization have resulted in extreme forage variability in macromineral levels”. Weber found that some forages had chloride levels over 1 percent of ration dry matter, which negatively affects lactating cow performance and health. To account for the chloride being regularly applied through potassium chloride fertilizer, routine chlorine testing in all forages is advised. This information will allow ration formulation to meet cows’ needs.

Forages – We Can do Better — a lot better!

Forages:  We can do better – a lot better!

By Dan Peterson, Field Agronomy Manager

 

When the acres of pasture, grass hay, alfalfa, corn and sorgum silages, and grazing wheat in the plains are all added up, forages account for by far the most acreage of any US crop. In fact, land used for grazing is over 780 million acres – equal to 40% of the entire land area of the US and nearly double the land used for other crops of all types. Add to that the 61 million acres of alfalfa, 15 million for corn and sorghum silages, then add in the grass hays and others, and you can see that forages comprise the vast majority of US cropland. And yet, it could be said that forages continue to be neglected when it comes to fertilization. The majority of grazing lands receive no fertilizer of any kind, with the resulting low forage yield/lower daily rate of gain being widely accepted on land with low perceived value. At AgroLiquid, however, we are discovering that even a very modest rate of our products applied at the right time results in a large return on investment.

 

Why?

 

All of the meat and milk animals that consume forages are, in fact, designed to consume forages – not grains. So even though we do supplement ruminant animal diets with grain, these animals must still have forage as a major component of their diets. Normally when a grower or agronomist is asked why we fertilize forages, the answer will be to obtain higher yields. While that is important, what if we could actually increase the quality and digestibility while at the same time increasing yield?

 

Our answer is yes – yes we can

 

We can, in fact, increase yields and at the same time increase the digestibility and energy content of forage crops. In our trials, here is what we are discovering:

  1. We increase the sugars, protein, and palatibility in grass hays, and the actual Neutral Detergent Fiber (NDFD) digestibility also improves substantially.
  2. On alfalfa we routinely achieve an increase in protein, lower lignin, higher water soluable carbohydrates (sugars), significantly higher Relative Feed Value (RFV) and Relative Forage Quality (RFQ) numbers, higher NDFD tests, and more extractable net energy.
  3. On permanent grass pastures we see strong yield and quality responses to low and economical rates of High NRG-N, Pro-Germinator, Sure-K, and fertiRain.
  4. We do not yet have enough data to determine if AgroLiquid nutrients have similar effects on corn and sorghum silages. More silage trials are planned in 2018.

 

What is the value to the beef cow/calf, feedlot manager, or dairyman for quality and digestibility improvement in their forages – even their low value forages such as “grinder hay”? Here are some interesting numbers as an example:  Every one whole number increase in the alfalfa NDFD test increases milk production by a half pound more milk per day. We often see an eight point increase in the NDFD score in alfalfa treated with a foliar AgroLiquid program. So if we were feeding a ration with 100% of that alfalfa, the cows would produce four pounds more milk per cow per day. But in real life alfalfa is fed at an average of closer to 25% of the total mixed ration on large dairies. If a dairy operation with 2,000 cows in lactation is feeding alfalfa at 25% of their total mixed ration here is how the math works:  4 pounds times 25% = 1 more pound of milk per cow per day.  On this dairy that’s 2,000 more pounds per day. Milk is priced  per hundred weight, so that’s 20 more pricing units per day times current “mailbox” price of $18 (varies by state) = $360 more per day = $131,400 more per year. In this example, based on a real operation, their extra cost was $15,000 per year (replacing a portion of their standard dry program) which netted them $116,400.

 

One significant factor we are learning in our many trials is that when individual AgroLiquid products replace the comparable commodity fertilizer product, it will, in most situations, improve the forage quality. For example, if Pro-Germinator replaces 11-52-0 on a grass pasture, the quality of the grass will be better. Likewise if Sure-K replaces or reduces dry potash, the forage treated with Sure-K will have better quality.  Where High NRG-N has replaced urea or UAN, the resulting grass pasture or hay will have higher quality, a larger root mass, and more consistent growth. Can an AgroLiquid program entirely replace a commodity dry program? Yes it can – but you may not always want to. For example, when we have tested yield and quality results where Sure-K is used as a supplemental foliar treatment following a top-dress application of dry potash, we usually see a significant increase in yield and quality versus the dry potash alone. So where soil test K is low, we can use dry potash and Sure-K to the grower’s advantage. On the high pH soils of the Central Plains, however, Pro-Germinator clearly performs better than 11-52-0, achieving both higher yields and improved forage quality, and should be recommended as full replacement for the dry.

So, You’re Telling Me Agriculture Is Hard?

 

By Stephanie Zelinko, Sales Agronomy Manager

This year is reminding us exactly how challenging farming can be. In addition to the usual market fluctuations and other challenges we have come to expect, Mother Nature handed us a spring that will be remembered for a long time. The good news is, there are resources available to help make the best management decisions for your operation in any given year. One tool available to help with decisions is research data.

With over 25 years of scientific research completed at AgroLiquid’s North Central Research Station (NCRS), in addition to countless trials through contract researchers and grower field comparisons throughout the country, no other crop fertility product is more researched.

What can research data do for you?

1. Fine tune your fertility program

Soil testing is a great way to help develop a fertility program to help ensure an economical return. Having a soil test is the first step, but understanding the results is the more critical second step in the process. How do you know where or what to cut back on when you need to make economics-based decisions? Here is where research results come into play. That extra gallon of Pro-Germinator® may give you a few extra bushels, but maybe yield is “good enough” without it. The NCRS has results on rates studies of Pro-Germinator®, Sure-K®, Micro 500® and nitrogen to help make those decisions. Research helps determine the likelihood of return on the fertilizer dollar spent.

2. In-season applications can pay

In-season applications offer a lot of flexibility to a fertility management program. It provides opportunity to cut back or upgrade a fertility program, based on the season and current crop need. As weather and markets change, in-season applications allow for the chance to capture more yield if conditions are right. This includes applications such as additional Kalibrate® or AccesSat sidedress on corn, or a foliar application of Sure-K® and micronutrients on soybeans, wheat or fruits and vegetables. These in-season applications delay purchasing decisions later into the season, thus helping spread out cash flow.

3. Maximize return through proper timing

The 4R’s of nutrient management have embedded in our heads that the right timing of nutrients is necessary to achieve top yield and ensure what is being applied is available for the crop when it needs it. Before planting, at planting, in-season early or late are all good options, depending on crop and growing conditions. Split applications of nutrients, especially those that are at risk of environmental loss, have shown through research to improve yield. Fertilizer is expensive; knowing the best time to apply will help make sure the dollars spent go to the crop, rather than being lost or tied-up in the soil.

4. Embrace technology

AgroLiquid is a leader in innovation. This includes the products we manufacture and sell, and also keeping up with changes in liquid fertilizer application technology. Teaming with companies like 360 Yield Center® and Precision Planting®, we put these tools to the test at the NCRS, which helps our AgroLiquid representatives and field staff make better recommendations. Keeping up with the latest technologies in fertilizer application, along with which nutrients fit them best, helps ensure the crop nutrition is being applied in the best possible way to provide a positive return.

Just as there are many decisions to make when determining which crop is most profitable, there are many factors to consider when determining how a fertilizer budget should be spent. Utilizing research from AgroLiquid will help provide you some of the background and support needed to make a more informed choice. And this part of agriculture is easy…. AgroLiquid research results from the NCRS and other sites across the country can be found on our website at research.agroliquid.com.

Why Do We Do What We Do?

 

By: Nick Bancroft, Vice President of Organizational Planning & Operations

Sowing the Seeds

Our Heritage and Future

AgroLiquid is proud to be a part of the ag industry. Proud to be a part of your business, to be a valued partner and to have an impact on your operation. It is truly our pleasure to serve farmers and growers who work hard every day caring for crops and livestock, to work alongside retailers who bring new ideas, and have a small part in shaping the rural communities that provide food, fiber and fuel for the world.

This past year, AgroLiquid has revised and updated our Core Values. When I look at these guiding principals from a distance, they really reflect the fundamental beliefs of generations of farm families. I appreciate that alignment for many reasons; first and foremost, much like those family farms, AgroLiquid is a family business. Second, our company mission is ‘To Prosper The Farmer’. This has been the embodiment of the AgroLiquid way since our inception. We aim to find the need, and provide solutions that benefits the grower in a meaningful way.

Our internal teams have begun the discussion around how everyone fits our Core Values. I believe these ideals represent what AgroLiquid has always been. Communicating this in a clear way will help us remain true to our vision and beliefs.

 

An Eye on the Horizon

The Sustainability of Agriculture

In agriculture, improved management practices have to make economic sense. Sustainable agriculture means stewardship of the land, air, and water – but it also means doing this in a way that is profitable over the long-term. Sustaining, and further improving crop yield, is the best objective of soil health. AgroLiquid pursues this objective through three overarching ideas:

People

  1. AgroLiquid exists in many ways to educate. We have people spread throughout North America that have a great depth of knowledge in numerous subjects. More valuable than the book knowledge, there are hundreds of people with experiences in agronomy and business that are able to share those throughout a broad geography.
  2. The result of education, training, and a value-added sales process is relationships. I have personally had the opportunity to meet hundreds of people who I would have never connected with outside of a common mission “To Prosper the Farmer”.
  3. Partnering is an important part of what AgroLiquid does as a company. AgroLiquid’s staff of trained agronomists and sales professionals routinely engage in best-management-practices training with growers and retailers. AgroLiquid also hosts learning opportunities at Corporate and Research Facilities. Best Management Practice information is available for agronomics, equipment setup and maintenance, facility design, containment, environmental responsibility and material handling.

Planet

  1. Reduced overall applications. Putting less pounds of nutrients down per acre while achieving optimal results uses less resources throughout the supply chain. From the mine site to the soil or plant application, AgroLiquid product’s lower use rates reduce the amount of energy, water, and other resources needed to produce an acre’s worth of fertility.
  2. AgroLiquid has proven in many different ways that both the reduced rate structure and the formulations of the products result in less offsite movement. The product stays where it is put and gets into the plant.
  3. AgroLiquid’s manufacturing facilities are designed with great attention to environmental care. Our facilities boast industry-leading tank storage containment systems, surface water management, disaster and recovery plans, and trained personnel to handle products in an effective way.

Profit

  1. Reduced handling is a benefit to the customer, Retail Partner and AgroLiquid (and it could be argued for the planet, as well). Whether it be transporting less volume, making fewer applications, or requiring less on-farm and retail storage, we often forget the benefits of reduced application rates.
  2. Better effectiveness of the product – “It doesn’t matter what you put on, but if what you put on has a positive effect.” (Again, this concept has a play in the planet section).
  3. We often are hesitant to boast about our abilities to boost profit. The crop management systems that we work with are increasingly complex. This makes quantifying the benefits more difficult. If you assign a value to each change you make to your system, based on the input from all of the people and companies that you work with, I think that you will find that just as important as good products. Good people and trusted advisers making recommendations of both product and practice increase prosperity.

 

Much of AgroLiquid’s fundamental focus remains unchanged from our beginnings. We now work with a much larger network of growers, retail partners, and employees, which allows us the opportunity to grow new concepts and ideas into the next generation. But, our drive is still to develop innovative products and economic practices that will ensure the sustainability of our company, as well as the future of agriculture.

Making Sound Cropping Decisions

By Galynn Beer, Senior Sales Manager

Making planting decisions is a challenge. Weather uncertainty always exists and that alone can result in a conservative approach to inputs. Price fluctuations weigh in, as well. How many farmers actually calculate break-evens to help with marketing grain? I’m guessing a relatively low percentage.

Doing The Math

The quickest math to calculate, and probably the math that drives a lot of decisions is gross revenue. I’ve done it and so have most farmers. We intend to be more thorough, but that quick calculation will move us toward seeking information to support that quick decision. A little more analysis is beneficial and helps separate the intuitive, or emotional decision from a more thorough process.

Making Good Decisions

How do we make sound cropping decisions? Some of this has to be analyzed at the micro or individual level. Rental agreements, land costs, equipment costs and other expenses impact break-even prices. With annual crops, we have a great degree of latitude to change, but how does one decide between wheat, corn, soybeans, cotton, hemp, or other annuals? First, what crops can realistically be grown? It can be tempting to grow crops on the fringes of the growing geography and assume all will turn out.

One success story usually is over-generalized to become assumed success in all years. Big mistake. The world of statistics is littered with events that happen on each end of the ‘unlikely’ spectrum. It’s dangerous to make a change based on this. Probabilities for success need to be considered.

Next, where is the closest market . . . where can I turn my inventory into cash? Is it distant? Will freight charges erode the projected profits? And the buyer of my grain – where is his market? If it is far away, even an export market, he will likely protect that distance and risk by lowering what he’ll pay. Is the market for what you are growing big? Can it easily be over-done and create excess supply? Crops like quinoa can look attractive, but a swing of 100,000 acres is huge in a specialized crop. Consider these possibilities. Is the crop insurable in your area? If not, how will you protect your risk? Also, you have to consider the impact to capital. Don’t assume that your banker will agree with what you consider a good decision. Some crops are just more capital intensive, and a great deal of risk is accepted up front. It isn’t cheap to grow corn. Cotton takes a lot of trips across the field. If you don’t have capital to finish what you start, then the outcome will fall short of expectations.

Establish An Expected Value

It’s easy to evaluate an opportunity based on the best or worst outcome. We typically remember outlier events and not averages. 300 bu/acre corn, 5 bale cotton, 100 bu/acre soybeans, these results stand out. But averages are where decisions should be made. By looking at averages, we can establish an expected value. If 3 bale cotton at 60 cents a pound is a 10 year average and 220 bushel corn at $3.80 is also a 10 year average, now you can begin to make a decision. If we look at these normal yields, we can then calculate realistic break-evens and profit margins. If 3 bale cotton, with typical quality, will result in $150/acre and 200 bushel/acre corn will produce $100/acre profit, the decision seems clear. But here is where historical averages matter most. Optimum quality for cotton doesn’t always occur. There are likely years where yield is achieved, but quality isn’t and we don’t reach the profit per acre we expected. If quality and yields align to produce $150/acre profit 50% of the time, but 200 bushel corn produces the $100/acre 80% of the time, the winner, believe it or not, is corn.

How, for cryin’ out loud? 150 versus 100 is easy math; $150>$100 so the seemingly obvious winner is cotton. But this is about what profit we can typically expect, so $150/acre that happens 50% of the time produces an expected value of $75/acre while $100/acre occurring at a rate of 80% of the time produces an expected value of $80/acre. When you evaluate it this way, $80>$75 and corn wins. This is why consistency often wins out over the long haul. The more variables that need to come together to produce the profit you are evaluating, the lower the success rate. Protein in wheat, a certain size of potato, a certain timing for watermelons and strawberries to hit the market; these are all factors that can influence the realistic profit we can expect. But in fairness, if cotton produces $250/acre profit only 40% of the time, that’s still an expected value of $100/acre and would beat the $80/acre of corn. Cotton may not win as often, but when it does, it wins big. Just be realistic about yields, profits and percentages of wins.

Switching Costs

If you’ve never planted potatoes, or sugarbeets, or sesame, it’s unlikely the equipment you need is parked out back. You’ll have to buy it. Are you buying during a heavy conversion toward a crop? You’ll pay a higher price for the needed equipment because demand is elevated. If the market for the crop goes south, you’ll likely want to turn those assets into cash when everyone else does, resulting in reduced prices because of the supply of equipment. And some equipment is very specific, such as a cotton stripper. You can’t decide to harvest wheat with it. So how long do you need for the cost of switching to this crop and equipment to pay off? Markets don’t stay high forever and can influence how soon we thought we’d pay that piece of equipment off. So make sure to re-read the previous paragraph to decide if switching costs are worth it.

Cash

The last part of a decision we’ll discuss here is critical, and often overlooked . . . the impact to cash. If cotton hits $1/lb and you evaluate all of the above and decide it’s a good decision to plant cotton, sometimes we forget to think about the impact to our cash flow. If you are growing corn, you can choose to convert the grain inventory into cash as soon as you harvest it. Cotton is much more complex. Payment generally doesn’t start until after the cotton is ginned. That can be months after it is harvested. Then, generally there are marketing pools that pay the remainder out over several more months. So a simple switch can negatively impact cash flow. Capital that might be available in November of the current year with corn, may not totally be realized until November of the following year if you switch from corn to cotton. Depressed wheat prices can dissuade planting, and turn those acres into corn, cotton, or something else. However, wheat provides cash flow at a time when most other crops don’t. There may be a time when a lower profit might be a preferred choice because it creates cash flow at an important time. Also, there is the cash cycle to consider. If you plant cotton in May of one year and get your money in November of the following year, then your cash cycle, the time period from when money leaves your bank account until it returns, is 18 months. Corn planted in April and liquidated in November of the same year means your cash cycle is only seven months. A long cash cycle can result in periods of a cash crunch.

The other aspect of this is hidden for sure. Inflation, even if it is low, results in reducing the purchasing power of money. If you liquidate your inventory of corn in November of one year at a profit of $100/acre and get a profit of $100/acre back from cotton the following November, it is $100 in both scenarios and seems the same. But the $100 profit from cotton won’t have the buying power of the $100 profit from corn; time and inflation will have eroded the buying power of the $100 from cotton. The profit from cotton is much more likely to have a buying equivalent of $97 or $98 since the 12 months of inflation will have reduced its purchase power. This often goes unnoticed.

The Final Word

Don’t take crop decisions lightly. A lot of variables should be considered. Gross revenue and net profit are generally relied on, but there are other considerations that are important. We remember outlier events, but you should base decisions on averages, along with other impacts to the business. Seek advice from others. This can help to alleviate biases. But seeking someone who is convinced of the same decision as you won’t provide a different perspective. Try to find someone who will challenge your decision. Emotional decisions can be the enemy of long-term success. You owe it to yourself to be thorough.

Update from the Field – California

Southern California Crop Update from Dylan Rogers, Sales Account Manager

It’s Hot!

Southern California has experienced more than 25 days of 100+ degree-days. The heat has helped crops begin to catch up as they started summer on a cooler note. Looking specifically at table grapes, the early-season growers are already harvesting. Therefore, growers with a late-season variety should still be aware of their fertility program, specifically potassium in the program as they begin to get closer to harvest. Growers should also be looking for potential diseases or pests. One in particular to look for this year is powdery mildew, as that has been prevalent in some areas.

Switching to the tree nut side of things, almond growers should begin putting together their post-harvest crop nutrition program, as harvest will begin very soon and will ramp up quickly. This year there has been some naval orange worm pressure, so be on the lookout for that as well. Pistachio harvest should also be starting in the next 3 to 4 weeks.

We will have another Southern California Crop Update a bit later in the season. Until then, we hope that growers have a safe and successful harvest and look forward to their crop of 2020!