We are going to look at several areas of higher prices and try to tie them back together at the end.

We are at historically high commodity prices now so this could help your cash flow but it may take a little extra effort on your part to protect it.

Will theses prices go higher? Maybe! Will they go lower? They always do! When? I DON"T KNOW!

Let’s assume you have all or part of your crop prices protected then we need to look at or have protected some of our input needs also. We can now focus on some breakeven figures for these crops so we can have an idea where you need to be and what crop will fit in scheme.

We are at historically high input costs. Have you heard that one before? I am guessing your lending officer will sure remind you of it when he sees the fertilizer and chemical bills come in.

We are always looking at ways to cut corners and I have been asked already can I do this, can I do that? How much can I afford to put on and still get the returns I need? Do YOU know what your soil test are or when was the last time you took them?

Soil tests are a good place to start and even if they have been within the last three years that is a start unless you are going for residual nitrogen.

Establish a yield goal from your history and add 5% to create a benchmark for developing recommendations to fertilize for. Nitrogen prices are very high but do you realize by cutting your rates by 10 to15% you might only cut your yields by 6-7 bushel per acre on dry land corn.

When corn was $2.50 per bushel you only sacrifice $15.00 per acre. Take that 7 bushel and take it times $4.00 that equals out to $28.00 per acre. That’s only $13.00 difference per acre additional income.

Even at today’s higher nitrogen prices costs might equate to $3 or $4 per acre difference in additional fertilizer cost over last years prices. I don’t think you will like to leave that much income potential on the table.

Phosphate fits into the same category as nitrogen. If the soil tests show you need to treat it do it. If your tests come in high enough on the tests, maybe you can get by with a pop-up type of starter at planting add a little additional nitrogen for extra kick and plant. Many of you have bigger planters now so carry a minimal amount of liquid speeds that process up.

The time to build phosphate is during the off season anyway as far as I am concerned. Lot of the times the fertilizers are more at a bargain than during the rush season. You realize the starter blend put down this year’s crop may only be able to utilize up to 20% of it anyway.

Many other areas of today’s inputs can’t be controlled either like fuel, rent and other expenses. They are also competing for their share of that input dollar. What can you do about this?

First let’s sit down with each other and develop a plan which ties these costs together. This will establish a breakeven point for your expenses in any crop you are planting. Somehow protect these expenses so they don’t keep rising.

Then go to your Grain Marketer, hopefully AGMARK, and at least get your breakevens protected. Your Farmway Co-op Agronomy Department has qualified individuals which can help with thee input side so give us a call.