AGRICULTURE

How will companies help farmers deal with the challenges of 2014?

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Farm Forum

Editors note: This article has been updated to correct inaccuracies.

“As agriculture clearly comes off a year with record levels of income, it’s been a great profit cycle for both livestock and crops,” Troy Johnson, Vice President for Midwest operations of Wilbur-Ellis said. “With a forty year high in farm incomes, things were great in the third and fourth quarter. Clearly there will be some challenges after the record levels for farm income this part year. At the top of our mind is how will growers adjust their buying patterns in response to the predicted lower prices.”

Wilbur-Ellis is not in the grain business but watches and monitors prices to see how growers will move forward. Company representatives look at increasing cash rents and land values and how those changes will affect those that supply the industry and the customer.

As plans are made for 2014, the company will be watching to see where shifts in production will be, Johnson says. Some say up to 96 million acres are in flux. Corn acreage is predicted to be down with a significant change for growers.

Johnson said there will some softness in the market for seed corn, but not a shortage of seed. Farmers are encouraged to place orders to get the type of seed they need. The lack of commitment to seed purchases at this time of the year indicates that farmers are waiting to see what will happen before spring.

Johnson said he totally understands that mindset, “If I were a product grower, whatever acres I have, I would place an order. There will be high demand for some of the limited hybrid varieties. Farmers should be thinking about that right now.”

Many operators have the capacity to do more with precision agriculture but aren’t totally making use of the technology. Many machines have GPS mapping and capabilities for variable rates planting. Johnson believes there will be a deeper utilization of some of those techniques as they can trim the cost of production.

Agronomists are constantly asking their customers what technology will help their customers be more profitable in the future. If the softness is a reality in the commodity market, then producers need to maximize output and maximize returns.

Technology may not be the right fit for every farm, but those who have made the investment will want to see a return on the investment. It’s easier to make the investment when there is $8 corn. It’s more challenging when the price is around $4.

Using the planter to precisely place seed and fertilizer with variable rate seeding is part of what growers purchased in new machines.

Johnson said their staff wants to ensure customer profitability with grower-by-grower field decisions. They want to help them get the most out of the acres they farm.

The company has a program called AgVerdict that offers interactive online tracking and generating of data for individual sections of the farm. It helps integrate the program into the operation and utilizes technology.

The national average yield is around 160 bushels of corn per acre. Use of technology can optimize inputs, resulting in some yields closer to 300 bushels per acre. With accurate hybrid placement and fertilization, using the right crop protection products, and a little help with Mother nature, farmers can get those yields, Johnson said.

The company has seen a real shift in acres and their services they provide in the western part of South Dakota. Acres have shifted out of pasture and range into production of row crops. Wheat acres are switching to corn. With current price trends, there might be an increase in wheat acres. He predicts sunflower acres will stay the same.

The company completed a fertilizer plant in Tulare this year and that has gone well. The company acquired Chester Farm Supply and bought property in Beresford. Johnson said there will be more purchases in South Dakota and North Dakota.

“This is all part of tremendous investment in this part of this country,” Johnson said. “The company has found that growers in this part of the country adapt to technology very quickly. With more acres in the market, Wilbur-Ellis has increased the number of agronomists, hiring people with a mindset that works well with the company’s values.”

Farming is coming off of a great run the last 4 or 5 years. Along with that, Wilbur-Ellis has been working to prepare the business to respond to consumer’s needs. There are challenges in the future as many have spent a great deal of money in the last three years, upgrading equipment and making changes.

Johnson said the company will be trying to identify what the customer profile will be along with watching for ways to transition and manage the anticipated economic downturn.

Along with AgVerdict, other new technologies are being developed. The company spends a fair amount of money and time on new products. Wilbur-Ellis has launched a drift reduction technology known as CROSSHAIR, and the company has partnered with the University of Nebraska in its drift reduction efforts.

With their custom application services, Wilbur-Ellis has a dependable crew of ground sprayers, and they treat more acres in the Midwest by air than by ground. Johnson said they have the largest fleet of planes and pilots in the Midwest, spraying close to 2 million acres by air annually. As North Dakota had thousands of idled and wet acres this year, this was a real challenge.

“We are excited to expand an internship program into North Dakota and Nebraska, following one that started in South Dakota,” Johnson said. “It’s a great way to develop professional leaders needed for tomorrow. It’s available to those in their second or third year of college and allows the students to work out of branches. They have about 15 to 20 people in the program. Fourteen people have ended up taking on permanent roles in the company.”

“For us, the most important thing is the relationship between our agronomists and the decision makers on the farm,” Johnson said. “As the agronomist is out walking the fields, scheduling the applications, growers almost turn over their production to our key agronomists. We build on that trust and work well with companies such as Monsanto, Dow AgroSciences and Valent to access and source whatever products the producers chose to apply. As far as production, we deal solely with the agronomy inputs to make a significant impact and produce a profitable crop.”