What is in this article?:
How corn and soybean farmers can manage their farms more effectively to prepare for lower grain prices. Reid Weiland, Garner, Iowa, uses financial gauges like yield per CSR, cost per bu., P&L per field, and other metrics for his financial dashboard.
Weiland Farms' mission statement is "to grow value with precision and integrity while nurturing while nurturing relationships, the land and the community."
Think yield per CSR
This perspective motivates him to scrutinize things like projecting a farm’s ROI for drainage investment using yield per CSR point (Corn Suitability Rating, an Iowa land-value index), against a comparable farm. “This identifies the lowest hanging fruit.”
Other indicators like cost per bushel, P&Ls per field, machinery ownership costs per acre, percent of acres with single and multiple N applications, whole-farm soil test averages, percent P & K expense of projected revenue and P & K source and use calculations comprise his management dashboard.
After considerable discussion, the family hired an office manager and day-to-day operations manager to turn strategies into reality. They free up his time to focus on other priorities such as the business’s top three vulnerabilities: weather, markets and land base.
“Fieldwork is better done by someone with related qualifications,” Weiland says. “Preparing for key risks and decisions is the best payback for my time.”
He addresses weather challenges and market risk through conventional tools like insurance, professional market advice and diversifying hybrid selection. Using strip-till on some acres eases up a narrow planting window and diversifies his N-application methods to have some success regardless of Mother Nature’s scenario, he adds.
Less conventional, though, is the family's reliance on farm leases for 80% of its operation. Weiland addresses this risk by building a business brand, staggering lease terms and exploring a steady supply of lease opportunities to replace any unexpected lease surprises. When it’s time to negotiate land purchases or new leases, doing his homework on a parcel’s 10-year “pedigree,” or production capabilities, beforehand wrings emotion out of weighty decisions that need to work over long-term market cycles. Highly detailed P&Ls on each field make his case if he has to renegotiate a lease in the face of lower crop prices.
“We can't forget that land cost can be 35-40% of corn and 45-50% of soybean cost of production,” Weiland says. “Getting the most productive parcels defines much of your long-term productivity. That is how one farm makes $20-30 per acre more than a similar one right next door. Managing the farm's raw resource base is our job.”