ILSOYADVISOR POST

Building a Successful Soybean Budget

Farming in the modern era is a skill that must balance biology and agronomy with cost and markets. Thus, it’s important to understand what the top influencing factors are for raising high-yielding soybeans. Once you know the factors, you can balance them with the current market. Like any budget, it’s important to separate cost into fixed and variable.
 
Fixed costs:
  • Seed, crop insurance, herbicides, fertilizers, land payments
Variable costs:
  • Storage, trucking, labor, fuel, parts
Fixed to Variable:
  • Seed 
    • Replant: Understand service policy and try to get 100% replant to move this into the fixed cost category.
    • Overseeding: It’s important to properly calculate true seed needs and to monitor seeding rates during harvest so this stays as a fixed cost
  • Crop Nutrients (Seasonal need of N, K, S)
    • Nitrogen and sulfur availability are influenced by organic matter and soil moisture. Build these needs into the budget as a fixed cost (inoculant, AMS, potassium sulfate)
  • Herbicides 
    • Respray: What is the quality of the program and what is the service policy?
  • Fungicide + Insecticide 
    • Move this to fixed cost, so that it’s in the plan from the start and won’t be the reason to not protect soybean plants going into grain fill.
Sometimes when developing a crop budget its easy to allow emotion to influence a business decision or override an agronomically sound practice. An example of this could be investing in a soybean residual herbicide, a premium seed treatment or applying a fungicide and insecticide during R3-R4. 
 
Allow good agronomy to guide major decisions and then evaluate the cost of investment as a percentage of the total fixed cost. This process can help bring investments and cost into perspective. Yes, you may not want to spend XYZ dollars per acre, but what does it represent as a percentage of the total cost and how much influence does it have on top yield?
 
Below is a chart showing different fixed costs at different options and how these costs per acre are influenced by percentage of fixed cost. Once you go through your full budget, and if your total cost surpasses a safe value, then focus on the inputs that represent the highest percentage of cost and work within that category to negotiate a favorable price per acre.
At the end of the day, a field and crop will talk to us and tell us what it needs. It’s up to us to manage the crops needs and to allow for some flexibility in the fixed cost category for good in-season decisions to be made. 
 
I have seen many potential 100 bu/ac beans shrink to 60 bu/ac beans because the budget wouldn’t allow for a nutrient, an additional herbicide, fungicide or insecticide. Seek out a good CCA who can help you develop a strong budget that will highlight the items that are must have to obtain high yields. 

Todd Steinacher
Steinacher is an ISA CCA Soy Envoy alum and currently supports ISA on agronomic content as well as serving as an Illinois CCA board member. He was recently awarded the 2020 IL CCA of the Year & the 2021 International CCA of the Year. He has over 15 years agronomic experience, currently working with AgriGold and GROWMARK previously. Steinacher has an associate degree from Lincoln Land Community College, a B.S. in agronomy and business from Western Illinois University and a master’s degree in crop science from the University of Illinois at Urbana-Champaign. If you have any questions for him about this article, he can be reached at steinacher@ilsoy.org.


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