Grain surpluses, record production levels and declining demand due to the Asian financial crisis have created low commodity prices that producers will be dealing with for at least the next 18 months. In response to this, the MSU Extension Field Crops Team has compiled the following list of proven practices and practical suggestions to help crop producer increase their net income. Incorporating these into your operation may help your business remain viable despite the low commodity prices. Some practices which reduce input costs require a higher level of management. Consider this carefully as you plan your management strategies for 1999.

Plant more mid-season corn hybrids and fewer full-season hybrids. The average net income from early-season, mid-season and full-season hybrids entered in the MSU hybrid performance trials from 1990 to 1996 were compared in the four growing regions in Michigan. Mid-season hybrids produced the greatest net income over this time period in all regions. The comparison used a market price of $2.50 per bushel and assessed the drying charges on the dry bushels sold. Lower market prices will favor earlier hybrids to a greater extent as will using the industry standard of applying drying fees to the wet bushels delivered. See "Corn Hybrids Compared in the 1997 Season" for relative maturity ratings for mid-season hybrids in the four growing regions.

Plant disease resistant varieties. Look for wheat varieties that are resistant to rust and powdery mildew, soybean varieties that are resistant to white mold and phytophthora root rot and dry bean varieties that are resistant to anthracnose, bacterial blight, white mold and viral diseases. This information is available from your local MSU Extension office and your seed supplier. There is typically no extra cost associated with these traits and they significantly reduce production risks.

Base hybrid and variety selection on yield, maturity, disease resistance and lodging and look for transgenic pest management traits after you have narrowed the field. Carefully compare the benefits and costs of herbicide resistant crops with alternative seed and herbicide programs. Remember that you give up the right to save your seed with Roundup Ready soybean varieties. Bt hybrids are essentially insurance policies that protect you from European corn borer damage. Pay the premium if your perception of the risk on your farm exceeds the cost. Keep in mind that you have to experience greater yield losses under low market prices to recover the premium than you would under higher prices. Also consider that your risk of having significant losses due to corn borer are no greater now than they were before Bt hybrids were introduced. See Extension bulletins E-431 "Corn Hybrids Compared", "Michigan Soybean Performance Report", MSU State Wheat Variety Trial Results" and "Alfalfa Varieties for Michigan".

Consider saving clean commercial soybeans, dry beans and wheat for seed. When you save your own seed you are soley responsible for how well it performs. Inspect potential seed fields for seed-borne diseases and other factors that may affect the seed’s performance. All seed should be fully conditioned and tested for purity, germination and vigor. Dry bean seed should be tested for bacterial blight, anthracnose and bean common mosaic virus and treated with streptomy cin. Wheat seed should be treated with Vitavax 200, Raxil plus Thiram or Dividend. Depending on the vigor test results, carryover soybean seed may perform better if planted into warm soils. Remember it is illegal to save Roundup Ready soybeans.

Calibrate your drill and plant the right amount of seed. Seed size varies tremendously in soybeans and wheat. Careful calibration is required to ensure that you end up with the proper seeding rates in these crops. Drilled soybeans should be planted at 175,000 viable seeds per acre.

To figure seeding rates simply divide 175,000 by the germination test for the seed (175,000 ¸ .90 = 194,444). If you have large seed (2,000 seeds per lb.), you need to plant 97 lbs. of seed per acre. If your seed is small (3,000 seeds per lb.), you will need to plant only 65 lbs. of seed per acre. Increase seeding rates by 10% when planting in adverse conditions or when planting late in the season. Wheat seed should be planted at 1.6 million seeds per acre when planting early and increased up to 2.1 million seeds per acre when planting late. Wheat planting rates are already adjusted for germination.

Increase Stand Establishment Uniformity in Corn. Yield losses of 10 to 15 bushels per acre have been attributed to plant spacing variability in corn stands in Indiana and Ohio. Plant spacing variability begins with the planter. Follow all adjustment instructions and service schedules listed in your operator’s manual. Check for wear on the metering mechanisms, double-disc openers, seed tubes and chains in the off-season prior to planting. Maintain your planting speed between 4-1/2 and 5-1/2 miles per hour. Deciding how deep to plant your seed is one of the most important decisions you will make as uneven emergence can also reduce yields. The correct seeding depth for a given field should be based on the depth of the uniform moisture zone and the 5 to 10 day weather outlook. Seeds should be placed into moisture whenever possible. If the soil is dry and the forecast calls for dry weather, you may need to plant as deep as 2-1/2 inches. Adjust closing wheels so that they close the seed furrow properly without exerting excessive down-pressure. Cloddy seed beds and soil compaction will contribute to uneven stands. Avoid working wet soil and reduce secondary tillage passes.

Fine-tune your corn planting rates. Evaluate your harvest populations each fall. The highest yield generally results from populations and environmental conditions that produce an average ear weight of 1/2 pound. If your ears are heavier than this, the population was too low, for that site and environmental conditions. If the ears are lighter than this, the population was too high. Work with your seed supplier to determine a good starting point when trying new hybrids.

Sample soils and follow soil test recommendations. Accurate soil tests allow you to reduce fertilizer costs by taking advantage of the nutrients supplied by the soil. If you don't sample your soil and follow the recommendations, you are losing money. Either you are applying more fertilizer than the crop needs or not applying enough for the crop to reach its yield potential. See Extension bulletins E-550A " Fertilizer Recommendations for Field Crops in Michigan and E-2567 "Tri-state Fertilizer Recommendations for Corn, Soybeans, Wheat and Alfalfa.

Fertilize for realistic yield goals. A reasonable yield goal is the average of the three highest yields from the past five production years for that crop in a given field.

Apply most of your nitrogen in a sidedress application if time and labor permits and base your rates on the pre-sidedress nitrate test. This practice has been thoroughly evaluated in Michigan since 1989. Nitrogen credits of 30 to 40 lbs. per acre are common on non-manured fields in southern Michigan and credits of 55 to 75 lbs. per acre are typical on non-manured fields in the thumb.

Don't apply nitrogen to soybeans or alfalfa. Well nodulated legumes will fix all of the nitrogen required for top yields. It is better to inoculate the seed with Rhizobium bacteria than to pay for nitrogen fertilizer.

Reduce or eliminate phosphorus fertilizer applications. Additional phosphorus is not required for corn or soybean production when phosphorus soil test levels are above 40 ppm. Additional phosphorus is not needed in wheat and alfalfa where the phosphorus soil test levels are above 50 ppm. Sugar Beets have not responded to applied phosphorus when the phosphorus soil test levels are above 40 ppm. Additional phosphorus will not produce a yield response in dry beans when phosphorus soil test levels exceed 30 ppm.

Apply micronutrients only where a response is predicted. Highly responsive crops will show a yield response to a specific micronutrient if the soil test level for that nutrient is low. Zinc, manganese and boron are the only micronutrients that grain and forage producers should apply to crops grown on mineral soils. Dry beans and corn are responsive to zinc. Dry beans, soybeans, wheat and potatoes are responsive to manganese. Alfalfa is responsive to boron. Foliar applications of zinc work well in dry beans but have yielded mixed results in corn. Foliar applications of manganese are effective in all responsive crops. See MSU Extension bulletin E-486 "Secondary and Micronutrients for Vegetables and Field Crops".

Take advantage of rotational benefits. Corn planted after soybeans yields 6-11% more than corn planted after corn. The soybeans also contribute 30 lbs. of actual nitrogen per acre to the following corn crop. Corn planted after wheat over-seeded with red clover yields 10 to 18% higher than continuous corn. The red clover contributes 40 to 60 lbs. of actual nitrogen per acre to the following corn crop. Longer rotations will reduce yield losses from insects, nematodes and diseases. The crop diversity they provide also offers greater risk protection from production losses and low commodity prices. Refer to an article entitled "Using Wheat to Enhance Michigan Crop Rotations" and Extension bulletin E-2646 "Michigan Field Crop Ecology" for more information on rotational benefits.

Utilize manure nutrients whenever possible. Manage manure to reduce nitrogen losses. Test manure, calibrate application equipment and apply manure based on soil test recommendations. The MSU Nutrient Management computer program (MSUNM) will help you manage manure nutrients efficiently. The program will help you follow the Michigan Right to Farm Manure management practices, calculate field-specific manure application rates, account for residual nitrogen from previous manure applications, apply legume nitrogen credits and determine your fertilizer cost savings from utilizing manure. Pre-sidedress nitrate testing has also been utilized to measure the amount of nitrogen available to corn from fall manure applications. The Huron County lab tested 144 soil samples from manured fields in 1998. The average nitrogen credit in these fields was 178 lbs. per acre. Nitrogen credits from manured fields in Calhoun and Branch Counties average between 80 and 100 lbs. per acre.

Apply agricultural lime as needed. Applying lime when needed will increase nutrient availability and improve crop yields. Select liming materials based on their neutralizing value, mesh size and magnesium content (if magnesium is recommended). Check into local sources of by-product liming materials. Pelletized lime is not your best investment over the long-run.

Scout fields on a regular basis and treat for insects and diseases only when it looks like the damage they will cause will exceed the cost of the treatment. See Extension bulletin E-1582 "Insect and Nematode Control in Field and Forage Crops".

Use three-quarter rate applications of soil insecticides where needed in 1999. Performance of full vs. three-quarter rates of Aztec, Counter, Dyfonate, Force, Lorsban and Thimet were compared in Michigan State University field trials from 1990 through 1995. Results of this study and similar studies conducted in other midwestern states indicate that root protection and consistency ratings of the three-quarter rates for these products were similar to the full rates. Carefully calibrate application equipment. Using lower application rates than recommended on the label is legal but it exempts the user from the right to make claims of poor performance to the manufacturer.

Calibrate your sprayer to avoid over applying pesticides. A survey conducted in 1989 revealed that 48% of the sprayers tested were over applying by more that 10%. If your annual herbicide bill is $20,000 you could be losing $2,000 each year. See MSU-Extension Agricultural Engineering Information Series publication # 628 "Calibrating Your Sprayer"

Use half-rate applications of postemergence herbicides in soybeans. Refer to the Soybean Fact Sheet entitled "Using Reduced Rates of Postemergence Herbicides in Soybeans" for a list of herbicides, the weeds they control at half-rates and specific recommendations prior to reducing herbicide rates. MSU research demonstrates that many broadleaf weed species can be controlled using half-rate applications of postemergence herbicides. The half-rate should be applied in a split application with 1/4 applied at early post to weeds that are less than one inch tall and 1/4 applied two weeks later when the weeds are less than one inch tall. Catching the weeds when they are extremely small is the key to success with this strategy as small weeds are easier to control. Scout fields and identify weeds when they are small, select the optimal herbicides for these weeds and keep adjuvants at full rates. Do not reduce herbicide rates when the weeds are under moisture stress. Using lower application rates than recommended on the label is legal but it exempts the user from the right to make claims of poor performance to the manufacturer.

Shop around for the best weed control program. Identify and map weeds in the fall. Select the least expensive herbicides that will control these weeds and fit within your management capabilities. Consider soil pH, crop rotations, insecticide interactions and time management when evaluating weed management options. See Extension bulletin E-434 "Weed Control Guide for Field Crops".

Consider band applications of herbicides followed by cultivation. Applying herbicides in a 10 inch band over 30 inch rows reduces herbicide costs by 66%. However, be sure that you have enough equipment and time to cultivate on a timely basis as this will determine your level of success. Select fields that are well suited to cultivation.

pre-emergence herbicide applications. This practice controls small weeds that would have escaped the herbicide and reduces the need for costly postemergence applications. Rotary hoe again in five days if at least a half an inch of rain has not occurred.

Perform tillage operations only when necessary and under the proper soil conditions. Deep tillage operations should only be performed when a compacted zone has been identified and the soil is relatively dry. Late summer and fall are the best times of the year for deep tillage. Perform secondary tillage operations only as needed to prepare an adequate seedbed. Shallow compaction created by excessive secondary tillage has been shown to reduce dry bean yields.

Purchase inputs early and pay cash to maximize discounts. You may need to work with your lender to secure enough operating money to do this. Weigh the interest rate you are paying against the discounts realized for purchasing early and using cash.

Compare the drop charges, drying costs and discount schedules from all of your grain buyers and deliver to those that yield the most net income. The easiest way to do this is to determine a scenario that most closely represents your corn crop and provide this same scenario to all of your delivery points. Ask for the amount of the check after all drying charges, shrink losses, test weight and BCFM discounts have been assessed. For example: 100,000 lbs. of corn at 25% kernel moisture, 53 lbs. per bushel test weight and 3% BCFM.

Reduce harvest losses through proper combine adjustments. Field studies have shown that soybean harvest losses of 10% are common and header losses account for more than 80% of all harvest losses. Repeated wetting and drying cycles occurring after the beans have reached 13% will greatly increase header losses. Harvest losses of 3% or less can be achieved through proper management and combine adjustments. Check the ground behind the combine and compare the number of beans you find per square foot with those on the ground in areas that have not been harvested to determine your harvest losses. For every five beans per square foot you find on the ground, you have lost one bushel per acre. Keep knife sections and guards sharp and tight. Maintain the proper pick-up reel speed (25 to 50% greater than the ground speed) and position the reel axis eight to 12 inches ahead of the sickle.

Look for ways to reduce overhead costs. Direct crop inputs such as seed, fertilizer and chemicals represent less than 40% of your total costs of production. The difference between high-cost and low-cost producers is generally not found in these areas. Look at other costs such as repairs, fuel, machinery, labor including family draws, debt servicing, depreciation and land expenses.

Develop a short-term goal for the next two years to control all farm and family costs. Rate every expenditure to determine if it is needed, wanted or desired, and say no to wanted or desired expenditures.

Share equipment with neighbors or family members. Joint purchasing or cash-renting can greatly reduce your farm's cash cost of equipment ownership. Work out the details on scheduling, maintenance and repairs before sharing equipment to avoid future conflicts.

Re-negotiate your rental rates with your landlords. If your potential income is reduced by 25%, then your rental rates should be reduced by a similar percentage. Being creative in developing rental agreements will allow you and the landlord to share the risks and profits.

Re-size your farm to fit the current economic realities. Lease or sub-lease any land that may not be within your economic plan. Sell mature timber with the help of a consulting forester. You may need to sell other assets including land to get debt structure in balance.

Consider taking advantage of the currently low interest rates to refinance some of your long-term debt. Many home computers have amortization tables installed that will help you make this decision. Consider moving short-term and intermediate debt to long-term. This will help cash flow and you should be able to obtain better interest rates on land versus short-term or intermediate. Pay off all high-interest credit card debt with lower interest rate money.

Keep accurate and current financial records and use them to understand your financial position. Understanding your financial position and past income statements will enable you to make the best management decisions and improve working relations with your lender. Check into the Microtel record keeping system and see Extension bulletin E-2216 "Farm Financial Position".

Evaluate risk management tools. How much risk can you afford? Understanding your financial position will help you understand your risk position. Risk management tools such as crop revenue coverage, multiple peril crop insurance and various marketing strategies will help you transfer some of your production and price risk to others.

Develop projected income statements and cash flows to help you write a financial plan. Use your monthly accounting records to monitor how closely you are able to follow the plan. Good financial records can do a lot more for your business than just help you prepare your taxes.

Certify all your crop acreage with the USDA -Farm Service Agency. You will not be eligible for some of their programs unless you certify. Also make sure you thoroughly understand the government programs such as the Loan Deficiency Payment so that you can realize the maximum benefit.

Develop a marketing plan and follow it. 70% of the grain is sold at the bottom 30% of prices. Calculate your actual cost for producing each commodity. Look for outside help if necessary.

Look for off-farm employment. Many cash crop producers are only employed four to six months per year. Unemployment is currently at historically low levels and skilled labor is in high demand.

Consider performing custom work to fully utilize existing equipment. If you have surplus equipment and time, you can generate cash or trade services with other farms. In some cases, you may rent the machinery to other farms rather than operating it yourself.

Michigan State University Extension has the staff and the resources to help you implement these practices and ideas on your farm. We encourage you to utilize our expertise as you and your family develop your plan for keeping your farm business viable during the current economic crisis.

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The following individuals contributed to this publication:

Mike Staton, editor

Karen Renner

Ned Birkey

Roger Betz

Dennis Stein

Pat Hart

Lee Jacobs

Paul Wylie

Jim LeCureux

George Silva

Roger Brook

Larry Copeland

Don Christenson

Chris Difonzo

Paul Gross

Mark Hansen

Tim Harrigan

Dick Harwood

Doug Landis

Steve Poindexter

Dave Pratt

Natalie Rector

Harold Rouget

Fred Springborn

Bill Steenwyk