I decided to create a series of blog posts detailing some of the most common questions farmers are asked. I kicked off the series (without announcing it was part of a series) with my A Winter Day post. The 2nd post in the series explains why farmers raise the crops they raise and also addresses why we choose not to raise certain crops.
There are several key factors in our decision-making process when it comes to adding crops to our rotation:
- Markets: Do we have a place to market this crop?
- Agronomic: Do we farm in an environment suitable for this crop?
- Economic: Can we be profitable while raising this crop?
- Equipment: Do we have the equipment necessary to raise this crop?
- Management: Do we have the time to produce this crop? Where does it fit in our current rotation?
These four questions are the beginning of our thought process when it comes to adding crops. I will discuss each one in further detail to provide insight into our thought processes. Expanding a rotation is often a difficult decision and requires a leap of faith for many operations. There are always unknowns and uncertainties when it comes to crop expansion.
Market availability is one of the biggest barriers to crop expansion for many operations and geographic locations. If a farmer cannot market their crop they will not grow them. It is really that simple. We can want to experiment with the crop all we want, but without an end-user or market we cannot produce them. For example in our area over the years many producers have considered experimenting with oilseeds however until 2012 there was not a viable market within 600 miles. Oilseeds typically had to be marketed as far east as Fargo, ND where there is an oilseed crusher. In 2012 a regional company specializing in oilseeds bought our long abandoned local elevators. This development suddenly opened our area to the prospect of producing several oilseeds including sunflowers and safflower.
This type of development is not typical of our markets however. Far more often farmers have to grow a certain crop for upwards of a decade successfully before the market arrives at their back door. In that case, farmers who find markets for their crops then have to consider the cost of transportation and storage. We ask ourselves several key questions:
- Can we afford to transport this crop to the market? Will the market contract on farm pickup?
- Can we afford to store the crop depending on the market and contract stipulations?
- Do we have the ability to store the crop? Is the crop stable enough to store for long periods of time?
Pea and lentil production has exploded across the norther tier of Montana, so much so that we are now the leading producers of lentils in the country. For years producers in northeastern Montana have been producing lentils and marketing them across the state line in North Dakota. In many cases farmers had to build storage, often utilizing Farm Service Agency storage loans, to store their crop while they waited for the processing facilities to accept the crop. In some cases farmers have concluded that they were simply too far from the market for the crop to be profitable. Luckily for these farmers the market has finally moved closer to home in the past few years, processing facilities and regional end-users within the state have sprung up or are under construction lessening the transportation and storage burden.
Unfortunately markets can also disappear depending on consumer demand and global supply. We recently added malt barley to our rotation as the demand for malt exploded with the craft beer craze. Since we added it to our rotation in 2013 we have seen decreasing prices, contracted acreage offers, until finally this year the contracts were cancelled entirely. Suddenly we found ourselves without a market for one of our best crops. We will not produce any malt barley next year as a result. We simply do not have a market for it. Our fingers are crossed that we will have a contract offer again in 2019.
The next question we ask ourselves is: Can we raise this crop given our soil type, rainfall, and other climate factors? Weather is always a wildcard however it is one of the most important aspects to consider for crop expansion. Agronomists have long touted the benefits of long-term rotations that include a warm season grass, a cool season grass, cool season broadleaf and a warm season broadleaf. Despite it being one of the most difficult for us to add – corn, a warm season grass – it was actually one of the first alternative crops to arrive in our area. We are an area with an annual rainfall of roughly 13.5 inches and we have relatively few frost-free days. In 2009 our neighbors first experimented with corn as a way to break the wheat stem sawfly life-cycle. The wheat stem sawfly had been damaging wheat crops in our area for years.
Aside from the benefits of rotation for pest control, corn also offered us the ability to utilize Roundup Ready technology to tackle scattered jointed goat grass and cheat grass issues. These agronomic benefits were attractive and lead to a decent number of corn acres being planted in the subsequent crop years. In the intervening years we have discovered the risks of growing a warm season grass in our area: FROST. We struggle to get the crop to maturity before a damaging frost occurs in September, or even worse mid to late August. This continues to be an issue for us and we are always looking for a more viable short day corn variety or a different option for a warm season grass. Other options include sorghum (we actually are not warm enough during the summer to get that crop to maturity) or sudan grass (which can be utilized for forage). So far it remains a hole in our rotation . . .
Our next question is always: Can we produce this crop profitably? While I am comfortable with producing one crop in our rotation at a simple “break even” goal (for us that is corn) – all of our crops cannot be produced at that level or with that goal. We have to analyze our cost per acre and expected return on investment before we commit to expanding our rotation and adding that crop. Several of the factors we consider are selling price, cost of seed, fertilizer requirements, herbicides/pesticides, transportation, and if necessary storage. If we are not comfortable with the economics we are unlikely to experiment with the crop.
Lenders are also unlikely to support their farmer customers that cannot show they have a reasonable chance of producing a positive return on investment for their crop expansion. Generally, depending on the economic situation your operation is in, crop rotation expansions are discussed with your lender prior to committing. While we have never had lender balk at our crop rotation plans, it is always a possibility.
We also have to consider equipment: Can we produce this crop without making a substantial capital investment? If we have to make a capital investment how much does that add to our per acre cost? For many farmers this is the one of the most limiting factors in their crop expansion thought process (usually second to markets). It is expensive to add more equipment to an operation, especially if that equipment is not going to be utilized on a high percentage of your acres. It is a lot easier to add a piece of equipment that will be utilized on 60-100% of your acres every year as opposed to something that will only be utilized on 10%.
For us we have managed to keep our capital investments as low as possible even as we have added quite a few crops to the rotation in the past several years. We have researched alternatives to some of the different pieces of equipment we needed, fabricated some of our own, and utilized creative solutions to reduce our capital expenditures. One of the areas we have had to invest in heavily is our haying equipment. We have expanding our haying operation to about 5 to 6 times the size it was just five years ago. We have added willow creek, triticale, and hay barley/peas forage mix to our rotation along with considerable expansion of our alfalfa crops.
The last question was ask ourselves is: Can we manage this crop? Do we have the time and available labor? This is often a question that is overlooked however for us it is a vital question. We are in the field from late March to early November and in some cases we simply do not have the ability to manage another crop or the desire to handle the stress of an additional crop. Often crops will overlap – meaning they need to be seeded at the same time, harvested at the same time, or herbicide/pesticide applications will overlap with haying or harvest of another crop.
My least favorite crop in our rotation is safflower simply because the timing is difficult. It needs to be seeded at the same time as our malt barley and/or hay barley forage mix and it also is ready to harvest while we are seeding winter wheat. The harvest becomes difficult to manage from a labor standpoint because of that overlap. We also have not added peas to our rotation because they tend to harvest before winter wheat, which places the harvest during the heart of our haying season. The weeks from the beginning of haying season to the end of our cereal grain harvest are long and grueling, it is almost impossible to add a pea crop into the rotation for that reason.
Certain aspects of management are also tied together with agronomic questions and concerns. Adding new crops to your rotation can help alleviate some disease and pest concerns while also ushering in new diseases and pests. Corn in a rotation with wheat and barley risks bringing fusarium head blight to your cereal grain crops. This is a potentially devastating fungus, and one in which fungicides have minimal control over. Pulse crops are often impacted by ascochyta – an equally devastating and fast moving fungus. Ascochyta is susceptible to fungicides however producers need to be vigilant with their crop scouting and management to reduce the risks of spreading the disease to not only their own fields but also their neighbors. Different crops also require differing lengths of rotations before a field can return to that crop in order to avoid some of these disease issues. All of these issues need to be considered when considering expansion, and each of these issues requires an additional time commitment by the producer.
For the outsider looking in I can understand why it is frustrating when farmers do not add to their rotation despite obvious agronomic benefits, or perceived agronomic benefits based on land grant university studies or information disseminated from the mainstream media about agriculture in the United States. It is true, we focus heavily on a few crops (corn, soybeans, and wheat), largely because they do very well in the areas they are grown. But from the farmer’s perspective adding crops to our rotations is a far more complex and difficult decision, one that we generally consider every year as new seed varieties are released, new technologies become available, weather patterns are evolving, and markets are developing (or disappearing). As you can see it is not an easy decision, it is rarely black and white, and it often requires a leap of faith.