From the ground up - "Farm Strategies to Deal with Low Commodity Prices"

By  | 

For the last few years, farmers have been dealing with low commodity prices that have put financial strains on an industry that is extremely capital intensive. With most experts not expecting any price relief in 2017, producers are being told yet again to tighten their belts and streamline their management strategies. Mark Welch is an agricultural economist with Texas A&M Agrilife Extension.

“It’s so important I think to monitor the variety testing trials that we conduct through the Extension Service that we plant many of these new varieties as well as the old standbys side by side in real world real field applications all across the state so you can go in your area and see how your variety lined up against some of the old standards as well as the emerging technologies that are out there and see how it performs in a real world scenario.”

Welch emphasized that using new crop technologies was just one of the tweaks producers might make to their plans.

“In grain sorghum, for example, looking at budgets for 2017, if a producer were able to reduce their costs by five percent, and they were able to increase their yield by five percent, and through a marketing plan and marketing tools, if you could increase your marketing price by five percent, just small changes in each one of those areas, we’re looking at added net returns per acre, forty to sixty dollars per acre.”

Given the low prices farmers are predicted to be facing again in 2017, Welch said that implementing these strategies could make a difference that keeps some producers in business for another year.

“So a significant difference in gross revenue just by making those small changes. A little on the cost, a little on the market, a little on the production and have a substantial impact on a farm revenue. Those are the kinds of things we need to look at doing, and do that year after year after year. I think that’s the key to sustainability, particularly in the challenging commodity environment that we’re in right now.”

The message to agricultural producers remains the same. Do more with less.