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Have a Backup Plan Against Rising Production Costs
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The price of oil causes the prices of all other commodities to increase, fertilizer and seed included. Developing a strategy will be different for everyone depending on their own risks and preferences.


Source: Michigan State University, College of Agriculture and Natural Resources

Contact: Beth Stuever at 517-432-1555, ext. 105

 

Having a Backup Plan Against Rising Production Costs Can Help Reduce Crop Producers’ Risk


Having a plan to avoid losing too much investment is the best way to reduce risk in an unstable market. Although futures prices have been favorable for the last three years, the cost of crop production has risen so much that good yields and strong prices are needed to cover the expected expenses this year, said Dan Rossman, Michigan State University senior Extension educator.

The price of oil causes the prices of all other commodities to increase, fertilizer and seed included. Developing a strategy will be different for everyone depending on their own risks and preferences.

Rossman suggests establishing a crop budget or cost of production plan as the first step to reducing risk. Relook at alternative rotations and special use crops and premiums just in case. The current prices are not guaranteed to continue through harvest, so develop a marketing plan and stick to it.

Additionally, basing your fertilizer program on good soil testing and crop needs will help ensure good yields. Soil fertility involves more than just testing nutrient levels; active soil biology, stable soil structure and effective organic matter levels are all necessary for quality soil.

Crop rotations, tillage, cover crops, manure use, planting and harvesting all affect the quality of the soil. Learning how to apply proper techniques as needed as well as establishing a good soil test program will help maintain the health of your soil.

To learn more about how to reduce your risk despite rising production costs, please visit Michigan State University (MSU) Extension News at www.news.msue.msu.edu. MSU Extension News features helpful articles about various topics submitted by MSU Extension experts throughout the state.