Choosing the right variety could make a $60,000 difference to your profits. One expert calculates the value
With hay crop values having regained their competitive edge with other agricultural crops, some U.S. farmers seriously considering seeding more forage crops this year.
According to Jerry Lindquist, grazing and crop management educator, Michigan State University Extension, “Grain planting intentions in the U.S., with favourable weather in 2013, will outpace demand while at the same time prices will fall. Existing U.S. hay acres won’t be able to meet demand in 2013, even with favourable weather.
“If we value alfalfa hay at a conservative $160 per ton in 2013, the crop has the potential of profiting over $200 per acre — bringing it in line with other grain crops for profit potentials. That profitability can be further enhanced when the right varieties are planted.”
When you’re choosing a variety for a perennial crop that will be in your field for four years or longer, like alfalfa, the right variety selection is much more important than for annual crops, like corn, where if a variety performs poorly one year, you can choose a different variety the next spring.
With planting costs at over $400 per acre, there is even more pressure to choose the right variety. And, Lindquist says, “You want the stand to stay in production as long as it generates more profit than other crops.
“In reality, how do we really know if an alfalfa stand is yielding above or below other varieties we could have planted? Unless there was another variety planted at the same time on a similar soil type on the farm, you’ll never know if you could have done better.”
This is where impartial university varietal trials are helpful, giving some solid proof of potential differences to provide more information for farmers trying to select the varieties with the best yield potential.
“Other factors, like disease and insect resistance, feed quality, and longevity also factor into picking the optimum forage variety,” said Lindquist. “But, in reality, yield over a set number of years is the best measure we currently have to estimate profitability.”
Looking at the Michigan State University Forage Varietal Trials for 2012, Lindquist said, “We can see that in one trial which was seeded in East Lansing in 2008, the yield difference from the top yielding alfalfa variety and the lowest yielding variety was 7.89 tons of dry matter per acre over a three year harvest period.
“This equates out to a 9.4 ton difference when we adjust the hay to typical 16 per cent moisture hay. If we assume a hay value of $160 per ton over the three years this is a difference of $1,504 per acre, or $501 per acre per year.”
Assuming we achieve this same annual difference over five years, Lindquist said, “The average life of an alfalfa stand in Michigan (dairy and livestock farms included), equates out to $2,505 per acre over the five years.
“If the average alfalfa field in Michigan is 30 acres in size, over the five year life of the stand, the difference between selecting the best variety and the lowest yielding variety (which in this trial example was the public variety of Vernal), the value would be a whopping $75,150. The only difference in this example is the selection of the variety planted.”
A $75,150 profit penalty for choosing the wrong variety is a high price to pay.
There are some additional associated with the higher yielding varieties, such as (potentially) a higher cost of seed, using more fertilizer due to a greater yield, higher harvesting costs, and extra expense for hauling and labour, but Lindquist says, “These extra costs may only diminish the gross value by 10 to 20 per cent. We’re still looking at over $60,000 more from choosing the best alfalfa variety.
“Even if in the past you were fairly good at selecting some of the better alfalfa varieties, the difference between some of the good and the best varieties could mean as much as $5,000 to $10,000 more on a 30 acre field over five years.”
Choosing the best varieties
So how does a farmer go about selecting the best varieties? Lindquist suggested, “Talk to seed dealers to determine your need for disease and insect resistance, and pay particular attention to longevity if your system requires it.
“Dairy farms typically want alfalfa stands to last for three to five years, while livestock and hay cash crop farms want the stand to last for as long as is profitable (usually seven to 10 years or longer.)”
Most important of all, according to Lindquist, is “look at the yield date of local, unbiased trials over time to see how they performed.
“Granted, the newest varieties won’t have yield data available for at least three years. But, unless you like to invest in commodity trading or at a casino, don’t invest your entire forage seeding dollars on new varieties. Use some of the highest-yielding, tried and true varieties that meet your farm goals, along with maybe a small portion being a sampling of a new, untested variety.”
Although there is no foolproof system for selecting alfalfa or other forage legume or grass varieties, Lindquist said, “If you do your homework and consider analytical trial data in your selection process, the financial returns can be substantial for perennial forage crops.” †