Focus on technology for profits
Volatility in both grain market and crop input prices can make it tough to nail down where to invest your focus and resources. If you chase grain prices too much, research shows you'll most often end up just about average, says Kansas State University ag economist Kevin Dhuyvetter.
"There is little research evidence indicating that producers can consistently get higher prices than the average," he says. "Thus, focusing management efforts on 'picking prices' does not seem to be a wise use of limited management time or resources."
Instead, focus on those things that you can control that influence your profitability most directly and are "persistent." These days, Dhuyvetter says, two big things on that list are keeping up machinery and adopting new technology.
"High-profit farms tend to be low-cost operators, but they do not cut costs at the expense of production," he adds. "This suggests that high-profit farms make wise input decisions to make sure they adopt appropriate technologies and also apply inputs in a profit-maximizing manner."
How much does this matter to your bottom line? Technology adoption, namely making better use of herbicides instead of tillage through new precision tools, can mean more than $11 per acre in increased profit, Dhuyvetter says. That's not to say other areas of focus aren't worth your time; the economist's data simply show solid returns on the time and energy invested in new crop technology.
- See more from Dhuyvetter: Crop Profitability -- Where Should we Focus our Management Efforts?
- Talk: How to get ahead in (Kansas) farming