The price of Corn dropped a remarkable 15.9% in August, the biggest fall of any commodity this year, and a terribly bitter pill to swallow for farmers as the price per bushel scraped barely over US$3.60.
There’s light at the end of the tunnel however – last week the USDA released their quarterly estimate of Corn stocks, and although there is a surplus, figures show there is also a greater demand for corn with exports higher than the 2013 figures.
So while 2014 may have been a dreary year for corn, there are certainly positive lessons that we can take away from the experience, particularly regarding how better management on a farming level is the key to successfully navigating the future of all commodities.
Lesson 1: Access to commodity information at any time
As much as others may wish it to be true, most farmers can’t simply pick up stumps and change their crop – climate, soil and geographical history play a large part in determining the strength of crops in specific geographical locations. However while it may be impossible for growers to change their wares on a whim, it’s not impossible, or even illogical, to assume that a lot of farmers could have better access to real time commodity prices and relevant information specifically regarding their crop.
But how and why could that possibly make things better? – Well, for a start, commodity pricing is incredibly predictive; most data sources can extrapolate the future of any given commodity for years to come, so a farmer could have a heads up of changes down the road a long time in advance of any price dips.
Tying it all back to corn, it’s important to remember that a large portion of the world’s corn supply comes from nations that are slower in adopting precision agriculture techniques. With better access to commodity and supply information, it’s not out of the realm of possibility to believe that a surplus could have been avoided.
DST’s such as the new AgDNA mobile commodity dashboard can feed this important information to growers on the ground in real-time, meaning on the most basic level famers can start planning their crops far ahead of schedule. The technology works by automatically assessing a farmer’s crop type for a specific field, and sending the grower useful messages on a regular basis about changes to this specific commodity.
Lesson 2: Increased efficiency means you get the most out of a low cost commodity
So $3 a bushel is a little worrying, but the impact of three dollar corn can be lessened with increased efficiency and maximum yields. I feel like I’m preaching to the converted when I shout from the rooftops “Try and maximize yields”, but the methodology behind doing just that is actually varied and a number of considerations that aren’t often adhered to need to be taken into account.
A good DST will do more than just record your yield, it will:
- Assess the threat level of pests and weeds in your fields
- Manage your seed spread and plot your seed volume
- Give you access to important soil data, including moisture reports
- Break down your time management
- Record your vehicle movements via GPS, making sure you’re covering every inch of field
- Give you weather information in real time, and record the level of rainfall on your farm
- Plot important irrigation data
- Sync with your machinery to get access to even more spatial data
At the end of the day, riding out the low prices is an alternative to changing crop. However there is still one more very important lesson to learn from the drop in commodities.
Lesson 3: Strategy is the key to success
Unfortunately in the Ag world, it seems that the concept of strategy is something that only larger growers or corporations seem to invest in. Of course ‘strategy’ conjures up images of Napoleon-esque generals standing around thick mahogany tables in pompous war rooms barking orders to subservients about warm cups of tea – the problem is with this kind of thinking is that it completely neglects the fact that DST strategy tools are not only available to farm operations of ALL sizes, but that they are fast becoming a necessity in the precision ag market.
You see not only is it important to record all your farm data, the important thing is to actually use that data to predict what’s going to happen on your farm in one, two, three years time.
In many ways that’s what is missing from smaller farming operations; most people seem to enjoy collecting data, but the application of that data and what it actually represents often falls by the wayside. A good DST will track the rise and fall of every aspect of your farm, something that gives even the smaller grower the ability to strategize next year’s harvest based on the conditions that either made the current harvest a success or failure.