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Avoid pennywise and pound-foolish decisions

Chad Hale for Progressive Forage Published on 31 May 2021
Social meida

I know just enough about social media to be dangerous. I don’t spend a lot of time online, but I do belong to some forage groups, and I enjoy following some of the questions and debates. Recently, a fertilizer discussion caught my eye.

As with many of these online discussions, the specifics were quite vague. Someone from an unknown location with unknown production goals and unknown financials asked about the feasibility of fertilizing pastures. A custom fertilizer applicator from an unknown location responded with some recent fertilizer recipes and prices he had been using. He was promptly vilified, and there was a long string of comments pretty much centered around the idea of “How can the grower afford to spread your expensive fertilizer?”

Some quick napkin math revealed that the custom applicator was applying reasonable levels of nitrogen (N), phosphorus (P), potassium (K) and some micronutrients for about $120 per acre, including application. It was enough fertility to support the growth of several tons of forage. I have no idea if it would be feasible for the person who posed the original question to apply the fertilizer recommendation that was given. The interesting part though is that none of the following discussion had anything to do with figuring out the particulars. The discussion focused solely on the feeling that $120 per acre is too much money to spend on fertility.

It is very probable that spending $120 to grow 2 extra tons of forage is an excellent investment, especially with the direction hay prices seem to be going. But the overwhelming sense of “that won’t work” in the discussion didn’t even allow for consideration of the idea. There was comment after comment to the effect that fertilizer was just way too expensive. It was as if spending any money out of pocket was out of the question. When the bank account is empty, all spending has to stop; that is clear, and that scenario does happen at times. But over the years, I have observed people who keep up the same spending habits even when there is money in the bank.

My hope with this article is that we can examine the difference between good investments and bad. The more restrictive your budget, the wiser each spending decision must be. Many readers are experiencing a tough growing season, and difficult decisions will need to be made. Every situation is different, and you have to consider your own circumstances. The goal here is not to provide cookie-cutter answers, but rather to get us all thinking.

Here are a few places I have seen forage producers invest, and I offer some discussion of why this might be a good or bad investment. Any concepts or products mentioned here have value but may not be for everyone. My comments are not meant to be an endorsement or criticism. These are just some real situations I have encountered to get us thinking.

1. I had a discussion probably 10 years ago with a corn grower about his corn seed choice. He was planting thousands of acres of the most advanced insect-resistant corn available. When I asked him why, he simply said, “My agronomist told me I need to.” When asked how often he had insect issues, he said he had issues about one year out of every 10. The grower felt his corn seed was cheap insurance. Insurance, yes; cheap, maybe not. While insect-resistant corn is almost a necessity for many growers, this individual may have overspent on protection he did not need.

2. Another recent corn example involved a grower who was trying to save money on seed by planting conventional corn. Seed expenditures were cut by about a third, and the plan was working well – until he wanted his local co-op to come spray his crop. He was told in no uncertain terms that the co-op only sprayed fields planted with herbicide-tolerant corn to limit their liability. His few dollars saved on seed were quickly eaten up when no suitable spray options could be found, and his crop was a failure. In this case, a little more money spent on seed would have resulted in a much more profitable crop in the end.

3. Novel endophyte tall fescue has revolutionized pasture management in the southeastern U.S., mainly due to the increase in animal production when toxic fescue is reduced in the diet. In other parts of the world, novel endophytes in grasses have had an impact on insect pests of pastures. In the age of the internet, information is shared widely around the world. When a Northern producer read of using endophyte-infected grass stands in South America to combat insect damage, he planted significant acreage on his farm. He didn’t have the same insect pests they do in South America. In fact, insect damage was not limiting production on the farm. So he paid extra for a very valuable trait he did not need.

Let’s revisit the fertilizer discussion. If you plant the latest forage varieties with very high yield potential in a low-fertility environment, you have wasted your money on seed. If you have low-growth plant genetics and fertilize them with reckless abandon, you likely have wasted money on fertilizer. If you have well-fertilized, highly productive plants but your grazing system does not allow you to harvest the extra growth, you have wasted money on both fertilizer and seed.

The system must work together, and online discussions with complete strangers are rarely advanced enough to delve into all the details. Any decision on purchasing inputs or capital improvements needs to be put into the framework of the whole operation. All of the products and practices in the examples above have been extremely profitable under the right circumstances. But if they are placed in the wrong system, they are money wasted. I am not advocating for reduced spending; I am advocating for wise spending that fits within your entire program.

Hands down, the most valuable class I took in college was a senior-level course that was supposed to integrate everything we had learned for four years by giving us a hypothetical operation to manage on paper. One important decision we had to make was if we would harvest our own hay or have a custom operator do it. Every single kid who grew up on a place that had their hay custom harvested gave an economic analysis that showed it was the economically correct choice. Every single kid who grew up cutting their own hay gave an economic analysis that showed cutting your own hay was the most profitable choice.

I am not sure it was the intended lesson, but I learned very well the power of preconceived notions. It is a force that is almost impossible to overcome on your own. We make so many assumptions in our decision-making process that those assumptions can almost make the decision for us. Get some outside eyes and ears to review your plans. A peer group is a powerful driver of good decision making, but perhaps the Social Media School of Management should not be your first choice.  end mark

ILLUSTRATION: Illustration by Corey Lewis.

Chad Hale
  • Chad Hale

  • Research and Acquisitions Manager
  • Western Forage Resource
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