By Darren Hefty
Whether corn is $7 per bushel or $2.50 per bushel, we always recommend running a return on investment (ROI) analysis on everything you do on the farm. I don’t know about you, but the tendency on our farm when the corn price is high and times are good is to think about every input that could possibly add more bushels. When the corn price is low, the first instinct is to look for costs to cut. This is a COMPLETELY WRONG way to run a business. The mistake is that in good times money gets spent wastefully and in tough times things get cut that were actually making you money, causing the loss to be even worse.
In 2015, growing corn likely won’t be nearly as profitable as it has been the last few years. However, if you make great decisions about where you invest your money, it could still be just fine. One of the bigger decisions weighing on your farm is what to do about seed corn. Should you buy the more expensive corn or look for a bargain? Should you buy the most comprehensive trait package or go to the extreme and plant conventional corn? Let’s analyze those decisions.
Seed Corn
Let’s say you narrow seed corn down to two choices. The hybrid that’s worked best for you is $300/bag. A hybrid you think might work is selling for only $200/bag. Your average plant population is 30,000 seeds/acre.
Hybrid A = $112.50/acre Hybrid B = $75.00/acre The difference is $37.50/acre.
If corn is $3/bushel, you’d need 12.5 more bushels per acre to justify the added investment.
Traits
Continuing on with that example, let’s say Hybrid A is a SmartStax hybrid with protection from corn rootworms, European corn borer, and more. There’s a reason you have been planting the traited hybrid: you have issues with those bugs and they rob your yield consistently.
So if you go conventional or at least to a reduced trait package, how much will you have to invest to protect yourself from the pests your traits used to take care of for you?
Corn rootworm insecticides = $10 to $20/acre
Aerial application of European corn borer protection = $10/acre
Total added investment = $20 to $30/acre or more if you have additional insect issues.
Summary
My point here is not to promote high priced seed corn and traits you don’t need. Run the math on exactly how much you would save by making cost cutting seed decisions. Then look at the yield difference required to justify such expenses. Don’t forget to add back in the protection you have already decided was needed in previous years. Can cheaper seed be okay? Absolutely, it can. Just don’t make a decision that costs you yield and leads to lost net revenue in the end. There are other places to trim the budget without hurting your bottom line.