With corn prices where they’re at right now, I’ve lately had some tough conversations with growers. The market has everyone a bit disheartened, and thoughts have turned toward cost saving. We’re questioning what we really need, and what is wasteful.
This is an important—a vital—conversation to have with yourself. It helps you define your priorities and sharpens your focus on your goals. Nevertheless, it’s a scary conversation full of emotion and enough second guessing to last a lifetime.
Many growers I talk with talk about scaling back as the market turns south. They plan to stop making some investments into their corn fearing a lousy return. They cut out some products and practices, categorizing them as luxuries rather than necessities.
If this all sounds familiar, take heart. We’ve survived similar scenarios before and we’ll survive this one too. As you evaluate your operation though, I encourage you to think in terms of value rather than in terms of cost. That might be a tough turn to make in your brain when all it can focus on is $$$. But it’s an important consideration to make, and one that will make you more $$$ in the end.
Take a product like Ascend for example. On the surface, it seems like a sure bet: don’t apply it and save yourself the $10 per acre. On an average sized farm, it makes for a quick savings of 15 grand. That’s the cost of Ascend. But what about its value? Repeated tests show that Ascend produces a 7 bushel per acre increase 80% of the time. You can expect a 5.6 bushel yield increase on each acre on which you apply Ascend. At $4 per bushel, that’s an extra $22.20 per acre. On an average sized farm, that amounts to an extra 33 grand. Minus the 15 you spent on the product, you’re still profiting over 18K.
Is this a case of spending money to make money? Sure. But it’s not a gamble. Ascend is a proven product, not a set of dice. I admit that we at UFC will recommend that you spend, even given the low price of corn, but we will recommend that you spend only when the certainty exists that you will earn your investment back and more.
Because truly, there are a lot of products out there with much value. Our industry has done an excellent job of creating valuable products like plant health treatments, growth regulators, and nitrification inhibitors. Trial after trial has proven that investments in such products result in returns, but it seems we’ve done a lousy job of communicating this value to growers. When you say that you can’t afford something, it means that you don’t see the value in that thing. And when there truly is value in that thing, that’s a failure of communication.
One reason for this failure, I think, is that value means something slightly different to each of us. We all have our own goals, priorities, and beliefs and those things tint our definition of value. We don’t have to all agree on one meaning—we couldn’t, even if we tried—but in my role of advisor, I want to know what value means to each of you.
When corn was at $7 per bushel, you trusted me and my colleagues at UFC to bring you innovative products and services. With the market shining on us, those products and services seemed so very low risk. With the market as it is now, the risk may seem higher, but I hope that your trust in us is unaltered. Our commitment to helping you advance the success of your operation remains steadfast: any product or practice that we recommend to you is one that we deem critical to your operation and beneficial to your bottom line.
Trust me and my colleagues to help you make smart decisions –not conservative decisions or aggressive decisions, just intelligent ones—about how to invest your time and money. Tell us what technologies you need assistance with to advance the efficiency of your operation. Tell us what questions you have. Tell us what value means to you so that we can best communicate to you the value of products and services and the tremendous profit they offer to your operation.