Reading the promotion material, you’d think every new variety is the best one yet and every new crop protection product is going to pay for itself many times over. For some, that may very well be the case, but the only tried and true measure of a new product’s value to you is on-farm testing — on your own fields with your own equipment and in your specific growing conditions.
Take fungicides, for example. They’re an often-applied yield protection product, but do you know if application of a fungicide makes you money? On which crops? If you only assume that it does but don’t know, you may be wasting valuable time and resources. If you assume a fungicide application does not make you money, you might be unwittingly losing yield.
Chris Holzapfel wants to put numbers on these type of everyday decisions. The researcher with the Indian Head Agricultural Research Foundation (IHARF) and Chris Omoth, a research assistant with Ag Canada, have been evaluating fungicide applications for several years on pea, malting barley, spring wheat, canaryseed and canola.
This past growing season was the sixth in a row for evaluating products such as Tilt, Folicur, Stratego and Headline. Not all products were tested each year, nor has every crop been through the trial the same amount of times, but every year Holzapfel uses real-time crop prices and crop input price averages to determine if a fungicide application produced a yield response in the crop and if it was enough to pay for the application.
Holzapfel has drawn some conclusions from the study so far. Fungicides on malting barley do seem to provide adequate yield protection to warrant their use. Field pea, however, rarely responded with enough yield to pay for the product and application costs. Canola hasn’t been tested widely as of yet, however the crop has only shown a yield increase in one of six trial years.
“Barley responded three out of four years with Headline and one out of two with Tilt,” Holzapfel says. Spring wheat, on the other hand, only responded to application once in five years. Canaryseed is a relatively new crop in the trial, but so far the crop has responded positively to fungicide.
ECONOM IC PAYOFF UNIQUE TO EACH FARM
To do a general economic analysis is more complex than a simple yield evaluation, Holzapfel says. He cautions that commodity price volatility and rebate programs for crop protection products make it difficult to produce numbers that are representative of individual farms and that do not become quickly outdated. While Holzapfel has calculated average profits per acre per year, he’s hesitant to publish the numbers. “I’d recommend that all economic analysis be done with your own prices and costs to ensure accuracy,” he says. Statistically significant yield increases, however, have occurred in every crop at some point, he adds.
There are other measurements that could be done to determine the usefulness of a particular management practice as well. A small yield response may not pay, but what if protein were higher? Or test weight? It should be noted yield was the only driver in this particular study.
HO WTODOYOUR OWN TRIALS
Holzapfel hopes more farmers will want to do evaluations such as this on their own farms. It doesn’t have to be that complicated. “Leaving a check strip is the basics of a trial,” he says. Because an increasing number of farms are equipped with yield monitors and GPS, tracking even basic information is relatively easy.
Holzapfel recognizes that on-farm field trails may seem overwhelming or just plain more work, so he’s put together a How-To field manual for setting up trials, as well as an Excel spreadsheet for inputting data. What’s more, he’s offered to analyze the data for you, if you ask.
John Holizki has always done some sort of new product evaluation on his farm, but he wouldn’t call it research. “We usually would start at one end of the field, do half with or without the input, then do the other half the opposite, then we’d note any changes on the yield map,” he says. It was not terribly scientific, and Holizki, who farms at Briercrest, Sask., realized that some simple changes could add more accuracy to the comparisons. So he tried Holzapfel’s template.
“It showed us how to split up the field to account for topography and slope as well as how to manage the change in moisture from the end of one quarter to the next,” Holizki says. “We also made sure to add replications.” He adds that while using the template added a bit more work to setting up the evaluation, he’s confident that the results will be more accurate because of it.
This year, Holizki applied Holzapfel’s template guidelines to a fungicide trial on durum as well as a comparison of dry phosphate fertilizer to a new phosphate product, Alpine, on pea. (In the interest of full disclosure, Holizki is a part-owner in the company that retails Alpine, Briercrest Grain Ltd.)
“The yield map on durum showed no difference between the treated and untreated plots,” he says. That said, he is not planning to do any further analysis (protein, grade) but recognizes there could be differences in quality. It’s too
Negotiating a “first right of refusal” contract clause can come in handy, especially if you’re renting land that turns out to be a particularly good fit with your operation.
Right now PMG members are firing a lot of questions to us about land lease agreements. Outside investments have come to the Prairies, particularly in Saskatchewan, and big money is bringing a commercial real estate approach to land rental.
Farmers often sit across the table from landowners who want a tighter, more formal agreement than the old handshake. We’re seeing landlords ramp up security and crop insurance requirements, and in some cases, they’re requesting that the farmer retain a lawyer to approve the agreement.
Regardless of the hassles, renting land is the quickest way to expand. It’s worth your while to pursue a fair and equitable agreement this fall because it will affect your net income for years to come.
3 RENTAL OPTIONS
Basically you have three rental options. In a cash lease agreement, the tenant pays a flat fee for use of the land for a specified period. The tenant assumes all the risk. In a cash rent agreement, the landowner receives a fee for the use of the land and also pays certain costs such as taxes and maybe maintenance of ditches or the like.
A crop share agreement is more complex. The tenant contributes resources such as labour, equipment and fuel. Other resources can be shared, but these will depend on what the landowner is willing to contribute.
“In most areas, crop share is not a good choice,” says PMG’s Dallas Pike. “However, in areas where yield can range from zero to a bumper crop, a crop share agreement can work. We see a lot of these agreements in drier areas of Alberta and Saskatchewan.”
Fierce competition for land can make some farmers lease land they should walk away from. “Everywhere supply is low. It’s definitely a bear pit out there,” says Pike. “You have to bring a good reputation and a fair offer to the table if you expect to get the land.”
Watch out for land that has expensive thistle or noxious weed issues. If the land needs a little TLC, bargain with the owner. “You might be able to negotiate cheaper rent; it’s not unheard of,” says Pike. “If you’re competing for rental land, put in the lease agreement that you’ll be a good steward, use best agronomic practices and run a proper crop rotation. Retiring farmers with a real love and passion for their land want to be sure it will be well taken care of.”
CAN YOU REALLY HANDLE MORE LAND?
Before you sign a lease agreement on a big tract of land, do your numbers. At PMG, we’ve seen farmers take on land and start scrambling. More land will impact your fixed costs and cash flow.
Look at your combine capacity. “As you take on more land, you’ll want to spread out your harvest. Your seed drill dictates the harvest, so make sure some of your crops finish earlier than others,” advises Pike.
In cash rent agreements, the renter usually makes cropping and agronomic decisions. Rotations and input economics dictate management. “The renter isn’t going to sabotage himself by putting in a crop that doesn’t make sense,” says Pike. “He’s normally going to act in his own best interests, and that is to grow the biggest and best crop possible.”
Negotiating a “first right of refusal” contract clause can come in handy, especially if you’re renting land that turns out to be a particularly good fit with your operation. This clause gives the renter first option to buy if the landlord decides to sell. Let’s say the neighbour down the road puts a bid in for $1,000 an acre. A tenant with first right of refusal has the right to match that bid. Or if in his estimate the $1,000 is too much, the tenant can say, “No thanks, I’m not interested.”
When you lease land, you’re not building equity so you may have a more difficult time obtaining intermediate and long-term credit at the bank. If you know the land is productive, shoot for a long-term lease of three to five years. Your planning will be more comprehensive and more productive — and your banker will know your commitment is serious.
If you don’t mind a little tractor travel, spread-out tracts of farmland can mitigate risk through differences in weather patterns and rainfall. “If you rent land that is miles out, you’ll need to get your head wrapped around sitting in a tractor for an hour or two as you roll down the road to your next piece of land,” says Pike. “You’ll want to be sure it’s a large enough tract of land to be worth the drive. A lot of PMG producers are spreading out their land parcels geographically, and it’s definitely helping them.”
Gary Pike is president of PMG. PMG provides management, marketing, business-planning advice and coaching to members who represent 1.5 million acres in Western Canada. To find out more about PMG and how to become a member, visit www.agcoach.caor call toll free 1-877-410-7595.