Small changes can double farm profit

How do top farmers make double the profit?

The Top 20% of farmers in our annual reviews generally make about twice the ‘average’ profit.This is worth around $300,000 a year – something worth chasing by spending more time on management.

Top farmers grow crops with slightly better yields due to less profit draggers, such as crown rot, nitrogen or weeds. Storing a little extra soil moisture is also a key factor in better yields.Growing the most profitable crops in well planned rotations and getting things done well and on time are just as important as fertiliser.

Margins are fine and it only needs an extra 15% of yield and 10% lower costs to double profit on the average farm.

  1. Viewpoint and focus

It is important to start with a view that it is possible to make good money from farming. Managing is about spending time on planning for good crop margins and farming operations.

  1. The farming system

Profit demands profitable crop margins from well-planned rotations. Managing disease and weeds is as much about the rotation program as it is about agronomy.

  1. Optimising moisture storage and use

Storing an extra few millimeters of rainfall is possible with good management of zero-tillage, controlled traffic and rotations which optimize soil cover. An extra 20mm can produce 400kg of grain - enough to double profit in a dry season.

  1. Sound operations – good planters

A good strike under difficult conditions or deep sowing after rain depend on good machinery, labour, and planning. Timeliness of planting, spraying and harvest is essential. This also involves rotations and diversification.

  1. Pre-season planning

The most profitable crop options and rotations need ongoing comparisons. Decisions should be based on soil moisture. A high frequency of low yielding crops, with small margins may be less profitable than a rotation which includes some crops grown on long fallow during the change between summer and winter cropping.

  1. Maximise legumes and yields

Chickpea has been a profitable crop which also provides nitrogen and rotation benefits. Good seed and inoculation techniques can improve yield and nitrogen inputs. Yields may be improved by planting later and growing smaller chickpea bushes on narrow rows.

  1. Good agronomy – attend to details.

Every disease problem, every mistake with seed, planting or variety selection, or not enough spent on inputs such as weedicide and fertiliser, can cost more than 10% in yield. It is common for three or more of these issues to be dragging down crop yields by some 30% and profit by more than 60%

  1. Learn from paddock variability

Somewhere on the farm, a high yielding area of crop shows what is possible. Yield maps, EM surveys, soil moisture and fertility testing and trials measured by yield maps can help you understand high yields and the limitations of soils on your farm.

Moisture is the key driver of grain yields and measuring soil water holding capacity and soil water at planting time can improve decision making. EM measurements allows rapid assessment of soil moisture and soil moisture variability across paddocks.

  1. Farm costs can be managed

High farm profit is about high margins not low costs. However, costs need attention, starting with the four big ones: labour, machinery, fuel and repairs. Manures and legumes can help reduce fertiliser costs. More long fallow and fixed rotations allow use of more residual herbicides to beat resistant weeds and reduce fallow costs.

  1. More nitrogen in better years

Sorghum is limited by nitrogen around 3 years in 10, when yield potential is more than 10 t/ha. Extra nitrogen fertilizer should be added if there is good soil moisture and a strong signal from the SOI (above 10). Feedlot manure can release more N in a good season to help produce better yields.

By Peter Wylie

Agripath

This information is facilitated by a GRDC supported project.

 

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