The average CVA grower is managing 48 million individual production facilities.
I’m talking about your corn plants, people. And I’m being a bit hyperbolic, but accurate, too. You’ve got about 48 million plants out there, that’s true, but you can’t manage each one individually.
What you can do is manage 1500 groups of 30,000 production facilities. You can enact regional management, so to speak.
This article is actually more on the problem of variability. It’s a complex problem and we can’t dumb down complex problems, or solve them in the space of one week. Especially in a down farm economy. This especially is a time that requires honesty and an eye toward profitability.
Which is exactly what the regional management I speak of requires. Unlike the farming magazines that talk about cutting costs—which is dangerous because the production needs of your corn plants don’t change according to the market—this kind of regional management allows you to use resources so as to maximize your return on investment. By taking a cold and careful eye to each management group, you become able to reallocate resources from wasteful facilities to those that can and will actually do something with the input and pay you back.
Of course, this isn’t a piece of cake. As I said, we can’t dumb down complex problems. To begin, this kind of management requires your attention to over 1000 groupings of plants. And by “your attention” I mean a vastly deeper engagement than simply looking at a yield map. I mean going line by line per group, embracing technology to assist you, and employing the help of a trusted advisor to increase your resolution and clarity and make the decisions for future seasons that will prevent the erosion of your net worth.
I know that that’s a phrase I employ often—a trusted advisor—and whoever that is for you, in this instance, it is of particular importance that he or she have the agronomic aptitude to know which buttons to push and when and enough intestinal fortitude to tell you that some acres just really shouldn’t be farmed.
Because when you approach management this way, that is a reality. This is, I probably don’t need to say, not a popular idea, but it will be obvious when you look at your operation this way. Likely, less than 3-5% of your operation will fall under such consideration—and it is consideration that requires serious honesty, scrutiny, and thought—but with the economy down and land prices up, it is high time for such consideration.
It is high time that we stop allowing our mediocre acres to hide behind our super-productive ones. This is a new layer of complexity for farm planning, but it is a level of management that will bring increased clarity to you about your operation. You’ll see clearly the 40% of your acres that are actually responsible for 70% of your profitability. You’ll see the acres that middle. You’ll see the acres that loaf.
And like a good business person, you’ll shut down the areas of the facility that no longer produce and move the energy and input you’ve been pouring down that hole to the areas that are raring and churning and primed to create greater return on your hard-earned capitol.