By Brian Hefty

Early projections in the U.S. are that corn and soybean acres will again be up in 2013 at the expense of wheat.  States like North Dakota and South Dakota could have record corn acreage, while seeing wheat acreage fall to 50-year lows.  As a wheat producer, this should put a smile on your face.  Economics 101 says less supply means a higher price, so what can you do to capitalize on this in 2013?

The higher the price of wheat, the more you need to raise your yield to take advantage of it.  Let’s look at 6 steps you can take to raise wheat yields and what the ROI (Return on Investment) looks like going into 2013:

  1. Add tile and improve drainage – assume you invest $400 per acre to increase wheat yields 10 bushels
    • 10 bu X $8 wheat = $80 per year
    • $80/$400 X 100% = 20% APR ROI each year on your $400 investment
  2. Apply a great seed treatment package – assume you invest $9 per acre to increase yield 3 bushels
    • Using QuickRoots and NipsIt Suite Cereals might run about $9 per acre, depending on seeding rate
    • (3 bu X $8 wheat – $9 invested) / $9 invested X 100% = 167% Net ROI
  3. Spray a foliar insecticide – use a full rate of Silencer or equivalent to increase yield by 1 bushel
    • When harmful insects are present, it’s easy to tankmix an insecticide with your herbicide or fungicide
    • A 1 bushel increase might not seem like much, and often you’ll gain more yield than that, but even at 1 bushel per acre look at the ROI…
    • (1 bu X $8 wheat – $2 invested) / $2 invested X 100% = 300% Net ROI
  4. Install tramlines – let’s say a tramline kit cost $4000 and you have 2000 acres of wheat
    • If you spray your 2000 acres twice per year, assuming you can save $5 per acre vs. having a plane spray your products, that’s $10,000 per year in savings
    • With tramlines, you should also have fewer overlaps when spraying, and it’s easier to spray when all you have to do is follow the tracks
    • ($10,000 saved – $4000 invested) / $4000 invested X 100% = 150% Net ROI year one.  After year one it is all profit, or savings, however you want to look at it.
  5. Spray Orius at flowering – reduce head scab, rust, and other diseases to increase yield by 4 bushels
    • If you can spray this yourself, thanks to tramlines, you will have less application cost, but let’s figure you fly this on for $8 plus $2 an acre for Orius for a total investment of $10 per acre
    • (4 bu X $8 wheat – $10 invested) / $10 invested X 100% = 220% Net ROI
  6. Pull soil & plant tissue samples – if you sample & read soil and plant tissue tests properly, you should be able to more wisely invest your fertilizer dollars
    • For our example, we won’t figure a reduction in fertility cost.  We’ll just figure that by better allocating your fertilizer dollars to the right products you can increase your wheat yields by 2 bushels per acre, which I think is really low.  The real yield increase if you use this data properly should be 5 bushels per acre or more, in my opinion, but we’ll use 2 bushels for our example.
    • If you pull your own soil and tissue tests, figuring soil tests done each fall in 5 acre grids and tissue tests done in 3 areas in each field you sample on a weekly basis during the growing season, you’ll probably have an investment of $8 per acre, but keep in mind you usually don’t soil test or tissue test every field every year.  Even so, we’ll use $8 per acre for our example.
    • (2 bu X $8 wheat – $8 invested) / $8 invested X 100% = 100% Net ROI

Now, please don’t misunderstand.  I’m not trying to sell you anything or talk you into using anything you normally wouldn’t on your farm.  All I want you to do is look at the ROI of each individual item.  Figure out if each of these things (and any other options) really pays under normal conditions, and then figure out how they pay with slightly higher wheat prices.  I just want you to be successful, and evaluating your inputs like I did above is an important step.