And Now for a Look at the 2022 Budget

Dec 27, 2021

A new year is loading for agronomy decisionmaking
Crop production 2021 is done and it’s on to 2022, and the biggest challenge is figuring out what the 2022 budget looks like in view of significantly higher input costs.

“Taking a look at your budget by crop is important, of course,” said Kevin Carlson, Federated’s agronomy sales manager, but “figuring out how to get the best return on investment (ROI) in this environment is also important.”

It’s time to evaluate the budget for 2022 and ask key questions:
           Where do I look to improve ROI? (Across the board.)
           What can I cut back without adversely affecting ROI? (Cut inputs last.)
           Are there changes I should make that don’t include cutting back? (Definitely.)

Seed prices are essentially flat and crop prices are high. Fertilizer and chemistry costs have risen and there’s no predicting what will happen between now and spring/summer. Carlson recommends using a simple crop budget calculator to help evaluate your 2022 budget. This tool provides an easy way to list all the expenses and calculate the gross: expenses, yield, etc.

Those figures clarify important information that guide decision making. Carlson said Federated Agronomists will look at critical soil test values to help with crop recommendations. “There are two different qualifiers,” he said, “mobile nutrients like nitrogen and sulfur, and non-mobile nutrients like phosphorus and potassium.”

Don’t cut applications of nutrients – even costly nutrients – if soil test values fall below the critical value. “You should build those nutrients back to critical value. “The highest ROI on fertilizer is maintaining or being above the soil test value,” said Carlson. (Watch for news about critical values in upcoming Agronomy Updates.)

“Don’t cut yourself out of yield. In corn production, for example, certain nutrients have a higher ROI than others. The highest return is on nitrogen,” he said (see this nitrogen rate calculator).

“The last place to cut is on inputs,” said Carlson. “It’s really hard to cut corners [and preserve yield]. For how productive hybrids have become, with the right environment, they can perform at a high level. You don’t want to starve the crop, to any extent – especially considering crop prices,” he emphasized.

While looking at input pricing, check out prepay options. “Your Federated Agronomist can provide pricing on the inputs you are interested in,” said Carlson, and you have until January 10, 2022, to take advantage of prepay pricing” (which you may or may not pay for by Dec. 31, 2021, depending on your tax needs). A prepay contract secures a price and product availability.

Don’t let 2022 budgeting become a burden. Talk to your Federated Agronomist for helpful recommendations on inputs and other ROI-improving options for 2022.

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