The Next Four Bushels
A Collaboration with Elston Solberg and Sean Taylor
One of the most talked about session from the inaugural Crop Intelligence Summit, held in November 2019 in Regina, was Sean Taylor’s presentation, Are You Maximizing Your Profits. Sean is a manager with MNP’s Agricultural Services Team in Regina. In his talk, he stated that four additional bushels of canola can mean an 80% increase in profits for western Canadian farmers.
Elston Solberg (Crop Intelligence’s resident agronomic advisor) and Taylor would seem to be an unlikely match coming from two different disciplines, times, and places. However, they are both coaches to some of the most forward thinking and profitable farmers in western Canada. They both employ a straight-forward and systematic approach in their work. Solberg has quoted Taylor in every Crop Intelligence presentation he has given since November. Four bushels – 80% profit has implications far beyond financial planning. It’s a powerful piece of information for farmers and agronomists.
Several years ago, Taylor and his colleagues at MNP started exploring the 5% rule in farm management. They wanted to understand the implications of small improvements in production to the profitability of their clients. They crunched the numbers and were shocked to find that a 5% increase in yields didn’t increase profits on the same scale. It was, in fact, much greater. A four bushel increase in canola production lead to substantially more profits – an 80% increase.
In the words of Solberg, “That stopped me dead. Holy shit, Man! Four bushels, that’s easy-peasy. Four bushels is super attainable with some sound agronomy.”
From Taylor’s perspective, this means that the management and production improvements that are needed aren’t necessarily as big or as overwhelming as most of his farm customers think.
Growing 38-bushel canola across the farm seems attainable to most (38.2 is the five-year canola average for Saskatchewan, according to the Canola Council of Canada). Growing an additional four bushels, or 42 bushels per acre, is not out of the realm of possibility. Most of the time, in order to get those next four bushels, it’s not major change that’s required, it’s a series of little tweaks.
Four bushels can make a huge difference in an operation and in the life of a producer and their family. We all know a lot of farms that are struggling to stay viable in our current environment, and if four bushels can generate 80% additional profit, that could have massive implications. It could improve the long-term viability of an operation for the next generation or the provide the opportunity to take the family to Hawaii. This is a game changer for agronomists as well, to know that tiny improvements can lead to big results.
It’s a liberating outlook. Solberg put it in terms a baseball fan can relate to; instead of focusing all our energy trying to hit home runs, we can be equally successful by hitting a bunch of singles. Of the last 40 teams that have played in the World Series of Baseball from 2009-2019 - only four of them (10%) had either the National League or American League home run season leader on their team. We are all so focused on the home runs, but teams that hit lots of singles will win more World Series in the long run.
Taylor talked about some of the commonalities of their most profitable customers. The most successful farms seem to be the ones talking about their business and their numbers constantly. These people are learning more all the time and they are continuously asking questions. In today’s environment, the average farm is a multi-million-dollar operation. They can’t afford not to know. The more they learn, the more they come to understand how much they don’t know. Whether it’s agronomy, business, marketing, or some other facet of the farm, they depend on specialists to push them.
These producers understand that asking for help isn’t a sign of weakness, it’s self-awareness. They value outside advice and understand the potential returns that can come from investing in individuals who can focus their time and energy on a specific area of their business. It’s what’s required to get them to the next level. These farms have already made the easy tweaks, and the next four bushels will be a little harder to come by.
The next natural question leads to agronomy – how do we get the next four bushels? We make hundreds of decisions in a growing season, and with each decision there is room for incremental improvement. In the major cereal and oilseed crops, we as an industry have been mining every nutrient but Nitrogen. Solberg believes there is an opportunity to reallocate some of our resources from nitrogen to phosphorus, potassium, and sulphur on a field by field, zone by zone basis.
We continue to under-utilize analytics, soil tests, and tissue tests. These tools will inevitably result in some found resources. There is an opportunity to reallocate those found resources to balance the nutrients we are applying, including optimizing the N:K and N:S ratios. Sulphur (S) and Potassium (K) are both widely over-looked and these two nutrients contribute to more efficient water and nitrogen utilization. It doesn’t necessarily require major change; it’s about moving around the playing pieces that are already on the table.
Solberg mused that, in some respects, 2019 was a gift from mother nature. That’s not something most of us want to hear. Many of us are still licking our wounds from a tough year, but if we slow down and critically assess the outcomes, there are some lessons to be learned. There’s still some time before seeding to take a step back from the challenges and examine the gift. We can make adjustments, a few incremental changes, and come into 2020 a little wiser.
Solberg challenges farm customers and their trusted advisors to question the way we approach yield goals and the way we target profit margins. We seem to have standard goals as an industry, whether its $30-40 profit per acre or 50-bushel per acre canola. If we shifted to a water driven focus, we would understand that in some years we have the opportunity for much more.
It’s like accepting that we are only ever going to play in the minor leagues and never make the big show. It’s possible to shift to $200-300 profit per acre. Maybe not overnight, but with incremental change – it’s doable.