December 15, 1999 | By: Ellen Brightwell
LEXINGTON, KY

Wheat producers don't necessarily need to use high-cost inputs for intensive crop production. In fact, several best management practices can be incorporated into an intensive wheat management plan at no added cost or with reduced-cost inputs.

An upcoming program will give Kentucky wheat producers the latest information on best management practices to make their crops profitable during adverse market times. The program, "Wheat Production...Perception Vs. Reality," will take place January 6 from 9 a.m. to 2 p.m. (CST) at the Warren County Extension Office in Bowling Green.

"One of the most effective economic practices is to develop a marketing strategy, or preconceived plan of how to sell your crop," said Carl Dillon, associate professor of agricultural economics in the University of Kentucky College of Agriculture. "To develop an effective plan, you'll need to calculate the break-even price, based on expected yields, necessary to cover cash flow needs as well as non-cash expenses such as depreciation."

Keeping good records is a must to establish a successful marketing strategy. The plan should include trigger price levels to cover production costs and living expenses. Another decision is what percentage of the crop to sell at what prices to cover these items. Consider making options and forward contacting part of the plan.

As part of the marketing strategy, Dillon advised producers to investigate the possibility of selling crops through government programs. Knowing the loan rate is an important part of this decision.

Another crucial management practice is to make a conscious effort to manage the risks inherent in crop production, according to Dillon.

"No matter what the crop, you will face some risks related to prices, yields and finances. By recognizing these risks, you usually can adjust some management practices to lessen the negative effects they will have on your business," he said.

To reduce the effects of price fluctuations, investigate forward contracting and using options to set the minimum price per bushel you'll accept for the crop.

Use stable-yielding varieties to reduce the possibility of lower yields. These varieties do not have yields that fluctuate dramatically with changes in the weather. Buying crop insurance is another strategy to reduce the risk of lower yields.

If you rent land, be sure expected returns will exceed the rental cost. To spread out the yield and financial risks of renting, see if the landlord will accept a crop share, or cost share, rather than a cash payment, according to Dillon.

"Financial risks can limit your ability to pay off debt in a timely fashion," he added. "To reduce financial risks, shop around for the best interest rate. Compare low, fixed-interest rates to variable rates. Another way to reduce financial risks is to follow the adage to ‘save for a rainy day.'

"Machinery management is another important financial decision. Should you buy new or used machinery and equipment? And how long should you keep them? Depreciation, repairs and maintenance are some factors to consider in these decisions."

Wheat producers can use several other no- or reduced-cost management strategies. These include scouting fields for pests to reduce pesticide use and thus cost, using no-till planting, choosing the optimum planting date, selecting varieties that have a high yield potential with lower seed prices and smaller seed size, and following recommended seeding rates. Other strategies are to take soil tests and follow the recommendations to apply the amount of fertilizer needed for this crop season, and survey fields for compaction and sub-soil only those fields that need this practice.

Another meeting session will deal with on how no-till wheat affects corn, soybeans and the soil.

Producers receive several benefits over the long term from using wheat as part of a no-till system. One is improved yields of corn and soybean crops that follow no-till wheat. Increased soil moisture is available to a no-till corn crop grown the year after the no-till wheat and soybean crops. Short-term research indicates an improved soil aggregation and other soil quality aspects.

A farmer panel will give different views on making wheat profitable. Panelists will be Allen Franks of Todd County, Curtis Hancock of Hickman County and James Spinks of Warren County. A panel of state Extension specialists will discuss managing to survive. These specialists will include Lloyd Murdock, soils; Jim Herbek, grain crops; Jim Martin, weeds; Don Hershman, plant pathology; and Richard Trimble, agricultural economics.

Topics of other sessions will be a consultant's view of profitable wheat, production practices of wheat yield contest winners, diseases in no-till wheat, and a two-year study of no-till drill performance.

Two hours of Certified Crop Advisor credit will be available in crop production and pest management.

For more information on the wheat production program, contact Luther Smith, Warren County Extension agent for agriculture and natural resources, at (270) 841-1681.

Contact: 

Writer: Ellen Brightwell (606) 257-1376
Sources: Carl Dillon (606) 257-3267
Lloyd Murdock (270) 365-7541, Ext. 207
Dottie Call (270) 365-7541, Ext. 234
Jim Herbek (270) 365-7541, Ext. 205