Maximizing ROI During Low Crop Prices

Welcome to “The Weigh Wagon”. The YieldVantage Team at RVC have started this blog as another way to share vital and thought provoking agronomy information with you our grower partners.  Over time the YieldVantage Team will use this outlet to discuss new technologies, changing agronomic practices, current field trends, and other topics of interest in the world of agriculture and the global communities that we are an integral part of. We welcome your feedback, and hope that we can help to give insight and clarity into the myriad topics that swirl around the complex business that we are a part of.

All of the talk lately has been on the various pressures that will keep crop prices down, from large  carry overs, to record crop harvests, to switching from grain to cellulose in production of ethanol , to fund managers and speculation . All of this has led to real questions on where can I cut costs and what actually makes me money?  The elephant in the room answer to these questions is that producers need to raise more bushels on less inputs. The 800 pound Gorilla riding that elephant is Precision Ag.

During the recent boom years that we have seen, there was little broad economic incentive to fully utilize precision ag capabilities. After all everything works when you have $7 corn. All indications are that time is over. As producers and suppliers throughout the ag chain look ahead to lean times fully integrating the hardware, software, and big data basing and analytical capabilities available to us today to produce actionable and profitable decisions is going to be one of the biggest drivers of future success. Producers and suppliers will have to move beyond the 4R’s and more and more to the multiplicity of barrel staves that affect yield.

As we stride forward into these leaner times there will be a need to quantify and evaluate which input investments are generating real ROI (Return on Investment). Cutting costs across the board while easy does not equate to more profits. The limited dollars available must be pushed into the places that will yield the most return, while sacrificing spending on areas that yield lower or no return. Some areas which will see cost reductions will be inputs, some will be production method changes, while others maybe capital changes. The hardest part of these considerations is identifying which are an operations high paying and low paying investments, and which areas truly are a “cost”.

Fertilizer, Seed, and Chemical are three areas that often are seen as costs. The truth is these, in conjunction with the land on which they are applied, more properly fall into the category of investments in a grain production business. If an adequate amount of any of these three is not invested in the proper amounts, place, and time then ROI (i.e. yields) will decrease. Examples are easy to see; too little nitrogen leads to poor corn, not enough seed and we leave yield potential on the table, no residuals and resistant weeds take over. So how can a producer realistically identify what will generate the most return?

As technology has progressed the agriculture industries innovators have found ever increasing ways to utilize the technologies available. The ROI ( of precision ag has now gone beyond speculation and conjecture to solid fact . Nothing evidences precision ag’s move from fringe to genuinely profitable more than the Johnny come lately mad dash from all corners to offer exclusive precision services. Everyone from seed and chemical companies, to former defense contracts have developed the latest and greatest “tools” for growers to use. Almost all of them are new, virtually unproven, and offer an “easy button” one size fits the Corn Belt approach.

River Valley Coop has been working for 10 plus years to develop a grower centered method to identify where maximum ROI is for every operation, they call it YieldVantage. YieldVantage (YV) feeds a growers data, and intimate knowledge of the acres they farm into the latest big data analytic tools. From this convergence of data and knowledge the YV team is able to create reports that clearly identify a growers highest potential for ROI as well as the electronic keys to executing the decisions based on these reports.  By fusing multiple data and analytic platforms as well as the staff’s tremendous experience the YV system is able to adapt itself to any type of crop production operation. The services and products that can be created are virtually unlimited.  We can get any level of technical expertise started this fall and prepared for spring. Please feel free to contact any of us at any time to see how River Valley’s YieldVantage system can begin to help your operation maximize profitability and ROI.


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