Podcast: Adjusting Your Fertility Budget To The Price of Corn
8 Jul 2415m 16s

Chad Henderson doesn’t like to skimp on crop inputs. He is, after all, one of the “send it twins” — always ready to push the limits and add an additional application. That’s why we at XA thought it’d be fun to put a throttle governor on Chad. Along with our field day partners at AgroLiquid, we gave Chad three budgets based on three different corn prices — $4, $6, and $8 per bushel.  Some corn plots seek only to show you how big of corn they can make. Chad’s 2024 research plot, conversely, will show you exactly what to expect with $100 per acre increases on fertility spend.  

00:00 Changing your fertilizer budget with the price of corn, you should do it. But do you, we're gonna talk about how 00:05 and the tests that we're doing at Extreme Ag to help you get better at it. Welcome to Extreme ags Cutting the Curve podcast, 00:13 where real farmers share real insights and real results to help you improve your farming operation. And now here's your host, Damien Mason. 00:23 Hey there. Welcome to another fantastic episode of Extreme Ice Cutting Curve. I'm joined by Stephanie Linco, agronomist 00:27 with Agro Liquid and Galen Beer. Also with Agro Liquid. We are talking about your fertility budget. You know what? We are in a downturn of commodity prices. 00:37 You farm, you know that, uh, we're 40% off of the 2022 Ag revenue is the projection for this year. So what are you cutting back on? 00:45 Where can you cut back and what should you cut back without losing yield? That's a big topic. We've covered this in different fashions 00:52 before, but you know what, we're doing it now in actual field day plot. You probably missed the field day. It was May 16th. 01:02 That's okay. Stephanie and Gay are gonna tell you what you missed. So Stephanie, you set up a plot down at Chad Henderson's 01:08 for the May 16th Field Day Agri Liquid Partners with Extreme Ag on all of our field days. And one of the big things here was you said, Chad, 01:14 I'm gonna give you three budgets. I'm gonna give you a budget. If it's $4 corn, I'm gonna give you a budget. 01:18 If it's $6 corn, I'm gonna give you a budget. If it's $8 corn, so how'd you set up the, uh, the, the plot and then what did you see in May? 01:25 And then, uh, I wanna get to through the season. Yep. So that's exactly what we did. We had those $3 bushels for corn 01:33 and then we're able to turn that into what we should spend for our fertility components. 01:38 So we kept seed crop protection the same and then gave Chad $3 budgets, um, $200 per acre, $300 and $400 per acre. 01:47 So that's what he had, um, to spend on fertilizer. Everything from his dry strip till program all the way through those, uh, late season foliar 01:55 applications. So, so isn't Like one of those deals where you remember that game show where they would like sale the century, 02:00 they'd give you a certain amount of money, and then you went around in different vignettes and you chose what you're gonna buy. 02:04 You gave him $200 and then he went through different vignettes and bought stuff. Like I know you gotta be old. 02:10 Remember the game show sale of the century anyways? Or did you tell him what he's buying? Nope. Um, so I don't remember the show, 02:17 but that's exactly what we did. Um, that he had those three budgets and he told me what he wanted to do. 02:24 So we, you know, just had a phone call and walked through that of where he spent money. Um, and it was kind of like a running calculator. 02:31 I'd be like, okay, you have $50 left, you have $40 left. And he would start, you know, as we had, you know, 02:36 that $400, he had lots of money left to spend and so it was really easy. But when we were at that $200 budget, 02:43 a little more challenging that he's like, well, okay, wait, I need five more dollars back. 02:47 Um, let's swap out, you know, product A for product B. 'cause he thought that would be a better return. Alen, these young kids that don't remember game shows, 02:57 I mean, she's from Michigan. Clearly they would've had snow days where the school was canceled. 03:02 Yeah. And the problem is they got screwed. They probably had to, she had to probably like watch like the Maury Covid show 03:08 or something as opposed to a sale. Yeah, for sure. Uh, yeah, you have to go back ways. I remember the game show though, Damien, 03:18 so you can take comfort in that. But, um, those decisions that took place in that show, or even to what Stephanie is referring to, it's to force 03:29 a farmer to think that through. Chad will tell you that he found it a little bit challenging and it's, it's kind of to bring an awareness of what rises 03:39 to the top when you have money to spend. It's interesting because you and I covered this, I think we're at the hefty field day 03:46 and we talked about where should you spend your last dollar, you know, uh, where, where's 03:50 that last brush stroke on the piece of art? Where, where do you stop? And it, it's $7 corn things are really good. 03:59 You can just keep blowing money and it's like, ah, you know, this might work. You gotta be a little more, uh, sharp 04:05 with your pencil and you're like this. So that's what's cool about this experiment. Where do you think, um, in the, in the, the, the field day 04:13 that you did, you, you looked there and looked at where do you already, where's your gut already tell you the spend should be 200 04:18 bucks, 300 bucks, 400 bucks? Yeah, it, it is probably going to be around that two 50 to $300. 04:25 We might be a bit low for, uh, the 200 because that's $4 corn based on 250 bushels per acre. And I think we are, we are seeing some of that 04:36 around the country, but we're also seeing a lot of areas where the basis makes up 04:41 where a guy actually is getting $5 and above. Yeah. So I, I think, I think that he has a little bit more than 200 still a good 04:49 process to go through though. Yeah. So to explain that the money part of it, so we said $4, $6, $8 corn, $200 spend 300 spend 400, 04:58 that was based on, uh, $4 bushel on what's the bushel then? 200, Yeah, 250 bushel per acre. 05:05 So, and we always use 20% of that expected revenue. So our budget's based on expected revenue. Uh, so that's based on Chicago corn. 05:14 A person listen to this right now though, Stephanie is saying, uh, they're budgeting based on 250 bushel yields. 05:20 That seems a little gratuitous. Am I right? It Is, but Chad has irrigated corn. Um, and so we kind of looked at what reality was 05:28 for his farm and I think that's the recommendation we need to make to all growers. You know, just don't look at a two, three and $400 budget. 05:35 You know, look at a realistic yield goal for your area and then set your budget according to that. So you think fertility Galen should be 20% of, I mean, 05:46 that's the low end, 20% of expected, uh, revenue. Yeah. Yeah, that should be the target, Damian. The reality is, is when corn prices come down, farmers 05:56 actually get more conservative than that in a lot of cases. And we'll try to go down to 17 or 18. 06:02 And oddly enough, when you get to $8 corn and 20% of, of that is a big number, they, they will sometimes stretch up to 22, 20 4%. 06:11 So we chose 20%. It's kind of what economists would call a bounded rationality. 06:16 There's probably not a lot of farmers scratching that out on a piece of paper, but they have that sense of this is too much 06:22 or this is too little. I love economic terms and that's actually one that I, uh, I have not heard. Bounded rationality. 06:29 Yes. I will never forget that. Okay, Stephanie, you said we kept prices the same spend budget, the same seed and crop protection. 06:38 And that's because everybody listening to this, whether they went to Chads Field Day or not, they're listening to the recap. 06:44 Now they face this, their seed probably stays the same unless they decide to go, you know, budget basement and you know, get the guy down the road that like 06:53 has some bin run stuff. So essentially, unless, unless you're doing something crazy, seed stays the same and, and you're saying crop protection, 07:01 unless you're talking about, um, a discretionary fungicide pass in August or something, generally crop protection 07:09 seed stays the same, right? Right. Yep. So that's what we're looking at is trying to keep those kind of standard practices the same, um, 07:16 based on Chad's history of knowing what he needs for his area. But fertilizer is one place that you can, you know, 07:23 make adjustments and reallocate dollars from one to turn to the other to help, you know, 07:27 better fit within that budget. So most folks, if they are looking at, I'm getting a little squeezed 07:33 and I'm looking at, you know, $4, $6, $8 corn, I'm going to adjust on fertility. 07:38 And Galen pointed out Stephanie, that some will overdo the cut. And so I guess, what's your advice to them 07:46 or what might we learn from Chads where, you know, you, you, you really hurt yourself on going too low a budget? 07:53 Where do you think the lesson is? You know, the lesson I think is work with somebody that can help you make some of those decisions. 08:01 Um, don't try to do those on your own. You know, you're the, you're the number one person 'cause you know your field, you know your crop potential, 08:07 you know your geography, but there's a lot of research out there that can help you make those decisions 08:13 of when nutrients will respond. So have a good soil test, look through your tissue analysis, look at, you know, all those resources you have available 08:21 and then make good management decisions. Just don't cut back. You know, what we did for his, you know, 08:27 $200 budget is we cut nitrogen out and, you know, that tends to be the instinct for most people. 08:33 You can save money by cutting nitrogen. Was it the best decision? Um, maybe, you know, return on investment might be there. 08:40 Um, but as far as shooting for top yield, we may not hit that 250 bushel yield goal 08:45 because we did have to cut that, that nitrogen back. So work with someone that knows, you know, and can help you make decisions. Where to cut 08:53 Jalen all joking about, uh, being old enough to remember game shows aside. Um, you and I remember an era where it was only about NP 09:01 and K and it was poor as much as you can. It didn't matter whether corn was four bucks, six duck, eight duck, or in the old days, whether 09:07 where corn was a dollar 60 or a dollar 85 or two in a nickel, which is about where, where it was about where it was range bound for. 09:14 Seems like the entire eighties and early nineties. I don't think that there was a lot of variation. And we're getting smarter about this on our, 09:22 our technology, our ability. I almost wonder if 20 years from now we're gonna look back at this discussion and say, oh, 09:30 we thought we were good at it in 2024. Look at now. I mean, is is this gonna be one of these things where 20 years from now it's like, oh my God, 09:39 we still were blowing too much fertilizer out there that didn't get used. I, I think to a degree, you're right Damien. 09:46 I I just think, uh, crop nutrition, it, it is crazy to me think, to think that I've spent my career in crop nutrition 09:53 and I still have so many questions. So I think, I think we will have learned some when we do this in the future. 09:59 I think we'll still have a ton of questions out there. And those questions will revolve against, uh, around that art of refinement. 10:07 Uh, you know, what little subtle things are we doing to make the, the nutrients like nitrogen, phosphorus, 10:15 and potassium more effective? So I, I think we'll be a little farther down the road, but these are not easy answers that we're seeking 10:22 and that's why we're really having an educational focus at some of these field days this year. 10:29 I like it. So let's talk about the field day that we, uh, that, uh, anybody listen to this, maybe they were there 10:33 or maybe they missed it on May 16th. What did you see, Stephanie, that you think is already like, got your wheels cranking on this budgeted 10:41 fertility, um, experiment? So probably the, the most unique thing that happened is actually Chad had a 10:49 mistake in the application. So the, the $4 corn, um, the two by two didn't get turned on. 10:56 So his first instinct was, yes, I save money, you know, I have, you know, dollars now that I can spend. Um, in reality, he'll go out 11:06 and put a wide drop application or something on. But you know, it was a good learning lesson because that's sometimes reality with growers. 11:12 You know, maybe that's an option. We can have cut out that two by two nitrogen and then save that for later on, um, when you're seeing 11:19 what that crop potential is. And so that was a very visible plot. It looked, you know, a little bit paler. 11:24 You could see that it was a little bit short on nitrogen. So it will be, you know, not the intended trial that we had, 11:30 but a really good twist to that. Well, there's a lot of folks that are listening that maybe don't even use two 11:35 by two technology on their planter, but they're still probably putting nitrogen fertility out at or right before time of planting. 11:42 So it's kind of the same, I mean, you can make the extrapolation on any of those, right? That's what you're, you're saying, right? 11:49 Yes. Uh, galy, what did you see at the field day that you wanna share, share that, uh, somebody that missed the field day might have as a takeaway 11:55 that you already saw on May 16th? Yeah, it, it was kind of interesting. Uh, Chad had a process 12:02 that he actually verbalized when we were, were talking about these plots and uh, it kind of goes back 12:07 to the bounded rationality phrase that I used earlier. Damien was, uh, we, yeah, Stephanie came back to him, I think it was in the $6 plot 12:16 and says, Hey Chad, you've got $8 left to spend. And his immediate response was $8 worth of micro 500. Why? Well, you know, that's, that's that gut feeling, 12:29 that bounded rationality that I have confidence somehow, somewhere that micronutrients have proven their value to me 12:38 and I think that's the best $8 I can spend. And it was interesting to see he didn't even hesitate. So somehow Chad has proven to himself the value 12:50 of micronutrients and felt strongly that $8 would pay him back. And, and the thing is, Stephanie, 12:56 this will be the last thing, uh, before we get outta here. Is that founded in the results? 13:02 That's why we do these trials. Or that's his gut. I think it sounds like that's his gut. 'cause he's a send it guy, he always thinks, wait a minute, 13:08 I got $8 in my budget, send it. Is there a reason? Is there a rationale for doing so? Yeah, we asked him, like, that was kind 13:16 of our follow up question is why did you respond so quickly? And he said, even though, um, he didn't like his answer, 13:22 he said it came back to tissue tests. And so after the video that we did, you know, kind of anti tissue test, he said just, you know, 13:28 long term knowing that tissues respond to micronutrients, that's where he was confident that he could see 13:35 that response, which hopefully leads to yield. Got it. So that, her name's Stephanie Delinko, uh, joined by Galen Beer. 13:43 Our friends from Agro Liquid, they are partnering with Extreme Ag on all of our field days. We've got five of 'em. You missed the one at Chad's 13:49 that was May 16th in northern Alabama. And you know what, that doesn't mean you can, you, you, you're screwed because you can come to all the rest of 'em. 13:56 On June 13th, we're gonna be in Crawford County, Iowa. That's at Garrett Land and Cattle, our friend Kelly Garrett, all of his crew will be there on June 13th. 14:03 We're gonna start at two in the afternoon. If you're a paying member of Extreme A, you can come in the evening before you can meet people like 14:09 Stephanie, Galen me, talk to our industry partners, shake hands and have a little dinner, then come to the field day. 14:14 You don't have to be a paying member to attend the field days. We want everybody to come to the field days. 14:17 You know what, bring your, bring your family, come to the field day. It's very educational. June 27th, 14:22 then we're gonna be at Arkansas and McGee, Arkansas, down the Delta region with Miles Farms friends Lane and, and Matt. 14:29 Then we're on August 8th, we're gonna be at, uh, Matthews Farms in North Carolina. Then on August 22nd out in Maryland for Temple Roads. 14:36 Agri Liquid will be a participant in all of these field days. And so our other business partners who want you 14:41 to come there and learn, interact every one of our field days then concludes with a dinner and a panel, a panel discussion that's interactive 14:49 so you can ask questions and go a little deeper in depth on all the stuff that we learned about. 14:53 Till next time, thanks for being here. That's Stephanie. That's Galen. I'm Damien Mason. 14:57 This is Extreme Ice Cutting the Curve. That's a wrap for this episode of Cutting the Curve. Make sure to check out Extreme Ag Farm 15:04 for more great content to help you squeeze more profit out of your farming operation.