Not a big deal, right?
It won’t buy much. Not a phone call. Not a cup of coffee.
Yet if the grain market moves a dime one way or another we get all jumpy. Help us if it moves a few dimes in a day.
The last couple weeks, I’ve had quite a few conversations about “cutting back” and “watching expenses.” This caution is a good thing, to an extent. I’ll admit though that it sometimes gripes me. It gripes me when these conversations regard something like fertilizer, which I think we can agree is a need, not a want. It gripes me when we’re more focused on saving $5 on a ton of Nitrogen than making an extra $45 per acre. I know that crop prices are down. I know that you have to really watch how you spend money this year. That doesn’t change science or math.
So let’s talk about the elephant in the room: your checkbook. Or, more accurately, your revenue, profit, return on investment. Whichever you prefer, there are ways you can influence it:
Or at least those are the three that top the list.
So let’s talk about them.
Cutting Costs: This is the one that I hear all the time. You’re cutting costs, but tell me, what are you cutting? You’re not buying a new truck this year? Many of you have upgraded equipment in the past few years, so perhaps your repair costs will go down, but, a horse I’ve whipped before, cutting back on something that has proven value to your operation (i.e. chemistries, fertility, seed placement, etc) doesn’t put you in a good spot.
Raise More: That sounds great doesn’t it? But what if it doesn’t rain? Or what if it rains too much? That’s an understandable concern no doubt, but I bet that the majority of you have insurance for one or the other, or maybe even both. Raising more can be a great way to influence you checkbook (revenue, profit, return) but there’s no better way to cut that goal off at the knees than to short a crop something vital in what would have been a great year.
Market Better: I bet that most of us will fairly readily admit that we do this poorly. I know I do. But that can change. Right now, the corn market is giving us an opportunity to make almost $.30 a bushel more than what your 2015 corn was harvested at. If we use a minimum figure of 150 bushels average on our corn this coming season, that’s an additional $45 in extra revenue per acre simply for marketing smarter than usual.
For those of you out there worried about saving the $.008 per pound of actual Nitrogen (which is what saving $5 per ton on 32% is worth by the way) I might suggest spending more time figuring out how to sell your commodity better instead. It’s simply good math.