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New tool aids in the decision

Agriculture.com Staff 09/11/2006 @ 12:51pm

The Corn Belt farmer in 2007 will be in the middle of a battle for acreage fought among corn, soybean and conservation interests.

There has been a lot said about the market having to buy corn acres to ensure there is enough for ethanol, livestock feed and exports. But the more acres dedicated to corn means that soybean acreage will decline, unless the soybean market steps in.

While that battle has received a lot of attention, there has been little said about conservation acreage, and the U.S. Department of Agriculture may have to increase rental payments to retain CRP acreage in highly erodible land areas. For the farmer with expiring CRP acres, how do you decide whether to let your CRP contract expire and shift into crop production?

Although CRP acres are scattered throughout the Corn Belt, the vast majority of candidates subject to switching are in Kansas and Nebraska. If you have expiring CRP acreage, what is your decision process for renewal or planting? Kansas State University economists Kevin Herbel and Rodney Jones have developed a decision aid to help those producers make a calculated decision.

If your highly erodible land is accepted for renewal, you'll have the choice about recreational or wildlife use, as well as managed haying and grazing. If your land is not accepted, or you do not attempt to renew it, more options open up.

There will be decisions about wildlife and recreation, as well as leaving the cover crop for haying and grazing. Or the land could be sold or leased to another operator, as well as returned to crop production or registered into another conservation program.

If you consider converting expired CRP land to crop production, there are numerous budget decisions to be made, extending from small grains, coarse grains and oilseeds, to scheduling a fallow year. A crop budget decision aid is included, which provides for typical crop production expense, but also for extensive soil fertility management, as well as added machinery expense.

In yesterday’s agriculture, wild guesses were the norm. In today’s agriculture, no one can afford to guess because it may mean the end of the farm as you know it. If demand for commodities shapes up next year as some outlook specialists anticipate, your decision about cropping patterns can mean the difference between profit and loss, and the CRP element sheds a whole new light on the decision. The Kansas State University decision aid (an Excel spreadsheet document) walks a producer through the economics of the choices, with complete flexibility to make all necessary income and expense adjustments.

The Corn Belt farmer in 2007 will be in the middle of a battle for acreage fought among corn, soybean and conservation interests.

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