Syngenta Thrive

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Since early 2021, there have been rumbles of enthusiasm and frustration about soybean oil prices right beneath the surface. Soybean growers and processors have been thrilled about record-high prices, but end-users of soybean oil, especially bakers, have had a significant case of sticker shock. What, exactly, has been going on?

Soybean Oil Prices Surge Higher

Soybeans are a bit unique in that they are a component crop. This means the economic value of growing a bushel of soybeans is derived from the value of the crop’s two primary outputs from the crushing process: meal and oil. Historically, Missouri soybean oil prices hit a high of $0.55 per pound between 2011 and 2012 (Figure 1). After those highs, prices fell to around $0.30 per pound for several years. In 2021, however, prices surpassed historic records. They abruptly jumped briefly above $0.80 per pound and spent most of the year above $0.60. For the entire year, the average weekly price was $0.65 per pound. In other words, the average price for all of 2021 was higher than any single weekly observation since 2010.

For the first five months of 2022, soybean oil prices have been even higher, averaging $0.77 per pound and twice exceeding $0.90 per pound. All else the same, higher soybean oil prices make it attractive for soybean processors to buy and crush soybeans. However, the value of soybean meal and the price of soybeans is also important.

Since 2021, soybean oil has accounted for roughly half of the total value of crushing a bushel of soybeans. This is significant as soybean oil typically accounts for just 25% to 35% of the total economic value. The implication is that the decision to crush soybean — or to build a new crush plant — is heavily influenced by high soybean oil prices.

A Trend Years in the Making

The USDA provides usage data for soybean oil, including the three primary uses (Figure 2). The largest category of soybean oil usage is the “food, feed, and other industrial uses” category. Over the last 12 years, this category has consistently accounted for 14 billion pounds of soybean oil usage. The smallest category of usage is exports. For 2022-2023, soybean oil exports are estimated at 1.4 billion pounds — the lowest levels in more than a decade.

Early in the 2010s, biofuel accounted for roughly 5 billion pounds of soybean oil usage. Since 2014-2015, however, biofuel usage has more than doubled to 12 billion pounds in 2022-2023. More specifically, over the last eight years, usage of biofuel increased at an average annual rate of 10%. For context, the Rule of 72 reminds us that a 10% growth rate results in a doubling every seven years. Overall, this is a pretty aggressive growth rate, especially considering it’s the only growth category within soybean oil.

Looking ahead, one has to wonder if, or when, biofuel might surpass the food, feed, and other industrial uses category.

Wrapping it Up

While the debate around high soybean oil prices came to the forefront in 2021, the increased biofuel usage trend has been underway for several years. In many ways, the current situation feels a lot like the “food versus fuel” debate that corn and ethanol faced around 2010. This time around, however, a better descriptor might be “doughnuts versus diesel.”

Beyond the data, one doesn’t have to go very far to hear about plans to construct a new soybean crush facility. With soybean oil prices maintaining record-high levels, the situation will undoubtedly incentivize the expansion of production. At the farm level, this demand will likely translate into even more soybean acres. All that said, the price of soybeans and the value of soybean meal will also affect the feasibility of widespread sector expansion. At some point, the industry might be searching for answers on how to utilize all the soybean meal created.

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Widmar and Gloy are the co-founders of Ag Economic Insights (AEI.ag). Founded in 2014, AEI.ag helps improve decision making for producers, lenders, and agribusiness through: the free Weekly Insights blog, the award-winning AEI.ag Presents podcast- featuring Escaping 1980 and Corn Saves America, and the AEI Premium platform, which includes the Ag Forecast Network decision tool. Visit AEI.ag or email Widmar(david@aei.ag) to learn more. Stay curious.

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Approximately every five years, most recently in 2018, Congress passes a package of program authorizations and funding commonly known as the farm bill. The legislation has immense consequences for the agricultural industry as it covers everything from crop insurance programs to farmer training to sustainability initiatives.

The latest version, the Agriculture Improvement Act of 2018 (2018 Farm Bill), expires on Sept. 30, 2023. The Act builds upon previous farm bills — but with a few changes from the 2014 legislation. Notably, the $867 billion package expanded programs related to trade, research and extension, specialty crops and organic agriculture, among others.

As we enter the final years of the legislation, we break down the major areas funded by the 2018 Farm Bill.

76% is dedicated to nutrition. The majority of this goes toward the Supplemental Nutrition Assistance Program (SNAP), but the 2018 bill also expanded funding for grants that promote healthy eating and reduce food waste.

9% funds crop insurance through the Federal Crop Insurance Program, which works with the private sector to offer insurance products that primarily compensate producers from losses in yield or revenue.

7% pays for conservation initiatives, including programs that assist producers/landowners improving water/air quality, soil health, wildlife habits and more.

7% is allotted to commodity programs — the two largest of which are Price Loss Coverage and Agriculture Risk Coverage. These initiatives provide price support through market and/or yield declines of certain commodities, which aids in business planning and accessing credit.

1% goes to everything else. Major areas covered include trade, research and extension, rural development, horticulture, and more.

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Agriculture is dominated by trends with small annual changes that play out over several years or decades. There are many examples of this, from yields to producer consolidation, but the trend that’s perhaps easiest to overlook is global acreage.

The adjacent graph shows global harvested acres since 1960. In 2021, world acres were 2.4 billion acres, up 63 million acres since 2016. For context, the U.S. harvested 85.4 million acres of corn in 2021. While 63 million is a small increase compared to the 2.4 billion total, it’s about three-quarters of the area of the U.S. corn crop.

This isn’t the first time global acreage has expanded. In the 1970s, acreage increased by 269 million acres. North America was a significant source of that expansion, contributing 74 million — or 28% — of the total increase. Global acreage again expanded in the 2000s and early 2010s due to demand from ethanol production and soybean trade. That expansion totaled 280 million acres, with South America and sub-Saharan Africa leading the increase at 73 million additional acres each.

Another important takeaway from Figure 1 is that those acres largely remain in production once the expansion occurs. In other words, sizeable global acreage contractions don’t happen, even when ending stocks are high and commodity prices are low. Even throughout the Farm Financial Crisis of the 1980s — when the U.S. government was trying to limit the pains of oversupply through programs such as Payment-in-Kind and Conservation Reserve Program — the overall global acreage trend was sideways.

Oilseeds in the Driver’s Seat

When the global acreage factory expands, it doesn’t do so uniformly across all crops. Of the 63 million acres added in recent years, a staggering 73% of those new acres have gone to oilseeds. While soybeans account for most oilseed gains (+25 million acres), all oilseeds — including peanuts, rapeseed and sunflowers — have increased.

Corn acreage has also trended higher but only gained 15 million additional acres. Across the other primary crops, cotton, rice and wheat posted small expansions, but acres of millet, oats, rye and sorghum were unchanged or lower.

Where the Increases Occurred

In addition to being concentrated by crops, oilseed acreage gains have also occurred in just a few regions and countries. For example, Brazil alone accounted for 44% of the increase between 2016 and 2021. Outside of South America, South Asia — mainly India— and the former Soviet Union region also have been a significant source of expansion.

Russian acreage increased by 8 million since 2016, and Ukraine added another 4.4 million. While many have recently noted these two countries are a significant source of global corn and wheat exports, they’ve also been a source of acreage expansions. The region’s largest crop is wheat — which increased by 4.2 million acres since 2016 — but oilseeds have again dominated the expansion, gaining 11 million additional acres. The crop with the most significant acreage gains within the region was sunflowers, up 6.6 million acres.

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Wrapping it Up

There are several reasons these data can be challenging to follow. First, the year-to-year changes, or variations, can be noisy due to weather-related issues. It often takes several years to establish a trend. Second, world acreage has increased by nearly 800 million acres since 1960, or a 47% increase, but the trend has played out over six decades. On average, this is equal to a lackluster 0.6% annual rate of increase. Third, the global factory expansion cycles between years of slow expansion and stretches of very little change. Taken together, one could monitor these data for several years before observing any significant changes. However, when financial conditions are strong, we can expect global acreage to increase.

Looking ahead, keep in mind the acreage expansion has been underway for at least two years. For example, South America and the former Soviet Union regions began to increase acreage during the trade war. It’s unclear how long the current expansion will last, but a significant element of the “cure for high prices” is already underway. The expansion will eventually begin to ease the current supply concerns.

Widmar and Gloy are the co-founders of Ag Economic Insights (AEI.ag). Founded in 2014, AEI.ag helps improve decision making for producers, lenders, and agribusiness through: the free Weekly Insights blog, the award-winning AEI.ag Presents podcast- featuring Escaping 1980 and Corn Saves America, and the AEI Premium platform, which includes the Ag Forecast Network decision tool. Visit AEI.ag or email Widmar(david@aei.ag) to learn more. Stay curious

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Syngenta recently held a groundbreaking event to celebrate the redevelopment of its North American Crop Protection headquarters in Greensboro, North Carolina.

Syngenta leadership shared a preview of the architectural renderings and innovative site features, including the more than 100,000-square-foot office building that will connect to an existing laboratory facility on campus.

At the event, state and local officials also discussed the local impact of the new headquarters and the legacy of Syngenta in the Greensboro community. For example, the company hired North Carolina subcontractors to make its vision for the redesigned headquarters a reality — an undertaking that will shape the physical and social landscape of Greensboro.

Visit Syngenta US’ website to explore more about the new workspace design.

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Midwest corn growers are coming off their worst season for tar spot since 2018, when many saw it for the first time. By 2021, they had some experience with the disease but were hit hard and suffered severe yield losses, according to Purdue University’s Darcy Telenko, Ph.D.

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Last year we saw a big response (in plant health) to two applications of Miravis Neo, and it gives us one of the widest windows of protection for the plant.

Andrew Tucker Precision Agronomist, Nutrien Ag Solutions

“I think when we get final data in, we’ll probably see more yield loss in 2021 than the other three years combined,” says Telenko, field crop extension pathologist.

Still reeling from their 2021 encounter with tar spot, growers got more bad news: Scientists found viable spores in the season’s field debris. This means the disease will likely be back next season.

“We know it survived in the debris, so it is overwintering,” Telenko says. “From now on, it’s going to be about how much inoculum is in your field, plus the weather conditions.”

Nick Groth, Syngenta agronomy service representative in Wisconsin, says tar spot’s Phyllachora maydis spores have definitely been on the move in his state. The disease expanded its host range over the past few years, and it is currently affecting cornfields throughout Wisconsin.

Don’t Stop Scouting

Tar spot hit with full force in 2021 in the second week of August for many growers, and those who weren’t ready for it realized significant yield loss. That’s why Groth encourages farmers to scout until silage harvest.

“By mid- to late-August, growers may think they’re done scouting, that they don’t need to worry anymore because the yield is made, since by then it could be a month passed tassel,” he says.

But according to Groth, research from Purdue shows that even at full-dent stage, tar spot can result in up to a 20% yield loss*.

“A lot of yield is formed at the end of the year when you’re packing starch there, so you definitely want to stay on your scouting,” Groth says. “We like to say until silage harvest time — that’s about half milk line — and by then, yield loss will be a lot less.”

Andrew Tucker, precision agronomist at Nutrien Ag Solutions in Mineral Point, Wisconsin, helps his customers with scouting by participating in Cropwise™ Imagery — the Syngenta satellite imagery product that helps growers monitor field health by comparing satellite photos taken every three to five days.

“Cropwise Imagery has detected issues in the field that we could scout and figure out exactly what was going on way before harvest,” Tucker says, adding that he recently used it to monitor a trial of hybrids with tar spot. “You could see the differences clear as day.”

Know Your Pest

Josh Pickel, crop specialist at Insight Farm Services in Marshall, Wisconsin, says treatment for tar spot should be one part of a field management plan, not its sole focus. In his area, tar spot had a big impact in corn-on-corn fields where rootworm beetles had already damaged the crop.

“I think we put a lot of blame on tar spot, where if we controlled the root worm feeding early, we probably wouldn’t have had such severe tar spot,” Pickel says.

In hard-hit areas where corn was going from grass-green to brown in 10 days, Pickel conferred with Groth to find a solution.

“We needed to get a three-mode-of-action fungicide on to reduce the tar spot and protect the plants,” Pickel says.

Miravis® Neo fungicide fit that need. With the active ingredients azoxystrobin, propiconazole, and Adepidyn® technology, Miravis Neo provides broad-spectrum disease control and plant-health benefits for increased yield opportunity and harvestability in corn and soybeans.

“It’s been proven in the market and has a long-lasting residual activity,” Pickel says. “We’ve seen really good results with it.”

Tucker has, too.

“Last year we saw a big response [in plant health] to two applications of Miravis Neo, and it gives us one of the widest windows of protection for the plant,” Tucker says.

The agronomists agree that a management plan should consider field history and all potential threats. And tar spot isn’t the only obstacle to maximizing yields in corn, says Tyler Harp, technical development lead for Syngenta.

“Miravis Neo does much more than provide good tar spot control such as providing broad-spectrum disease control on difficult diseases like Fusarium ear rot and gray leaf spot, and it provides significant plant health benefits,” Harp says. “This is one reason why Miravis Neo helps provide consistently higher yields across the Corn Belt — tar spot or no tar spot — compared with other products in the market. Being good on tar spot is very important, but it needs to do more than that to consistently maximize yield potential. That’s the power and benefit of Adepidyn technology and Miravis Neo.”

Choosing a hybrid for its tar spot resistance may seem like a no-brainer, but Tucker says growers should make sure they’re considering what’s best for their ground so they don’t sacrifice yield before they plant.

“We can treat for tar spot,” he says. “You can’t treat for a hybrid that’s not the right fit for a field. It isn’t going to yield for you if you don’t have the right genetics out there.”

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*Adapted from Carter and Hesterman. 1990. Handling Corn Damaged by Autumn Frost. NCH-57. Purdue Univ. Cooperative Extension Service, W. Lafayette, IN 47907.

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With fertilizers at a premium this year, no farmer wants to see them wasted. Or, perhaps worse than wasted, taken over by weeds competing with crops. It is more important than ever to make sure fields are weed-free, and starting early is the best way to minimize the effects of weeds.

Weeds hamper profits not only by reducing yield, but also in more hidden ways such as siphoning valuable resources from crops, says Skyler James, a crop consultant with Crop Quest.

Weeds take water, nutrients, sunlight and leave fewer resources for crops — meaning they are especially harmful for crops’ early development. The longer weeds grow, the more they take.

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The first thing you need to do is start clean so that you don’t plant into any standing weed infestations.

Erin Burns Ph.D. Assistant Professor and weed scientist at Michigan State University

Know the Hidden Costs

Fertilizer is a significant investment from which successful farming operations want to extract maximum value.

“If a guy has already fertilized and has weeds out there, he’s worried about the weeds using moisture and the fertilizer,” says James. “Competition is a real issue you see in the field when weeds aren’t controlled early enough. One thing that really helps is having a good crop canopy to compete with the weeds. For example, if the wheat isn’t fertilized properly, then the stand can be thin; then we have the weeds come in and compete with the wheat.”

Pete Eure, Syngenta technical product lead for soybean herbicides, agrees. “With fertilizer prices being at high levels today,” he says. “Anything you can do to maximize that nutrient-use efficiency is key — meaning removing weeds and keeping them from taking the nutrients.”

Start Clean

With early weed management, it is essential to start with a clean slate.

“The first thing you need to do is start clean so that you don’t plant into any standing weed infestations,” says Erin Burns, Ph.D. assistant professor and weed scientist at Michigan State University. She recommends burndown applications to ensure that all the weeds — any winter annuals or weeds that have emerged before crop planting — are gone.

Burns explains that she has many herbicide trials with control plots where no herbicides are applied. These control plots are excellent evidence of just how detrimental competition from weeds can be for crops.

“Even if you only had minimal weed competition, once weeds have established themselves, they’re competing with crops all season,” she says.

Eure says weeds are constantly fighting for the resources crops need such as sunlight, water, nutrients and space.

“Where we see a lot of the best success in weed control is when the grower comes out with a clean field,” he says. “With no weeds present, crops planted and a solid preemergence herbicide with multiple effective sites of action in place, the fight is largely over before it begins.”

If weeds are not controlled early in the season and become firmly established, harvest efficiency decreases, and a field’s weed seed bank grows. That means growers face unnecessary difficulties throughout the current season and at harvest and will likely start the following season in a less advantageous position regarding weed management.

Think Through Options

Growers can choose from a wide range of practices and products. The most significant opportunity for success lies in figuring out what best fits the operation and what each field needs.

Burns says growers in some areas use cover crops to help manage weeds. Cover crops create shade and block sunlight from weeds — such as the one he sees most frequently, ragweed. Effective cover cropping requires large amounts of biomass to layer the soil surface and impede weed germination.

“If you have shady conditions,” Burns says, “It makes it hard for weeds to make it through that thick layer, and we can have various levels of success.”

Mark Kitt, Syngenta technical product lead for corn herbicides, says each grower has their preferred weed management strategies. He suggests growers consider including herbicides with multiple effective modes of action in their weed-management program such as Acuron® and Acuron Flexi. Kitt says Acuron GT herbicide is the strongest post-emergence knockdown plus residual product for glyphosate-tolerant corn on the market and a great option for growers.

“Acuron GT combines four active ingredients — bicyclopyrone, which is exclusive to Syngenta — as well as mesotrione, S-metolachlor and glyphosate,” Kitt says. “It is specifically designed for post-emergence use in glyphosate-tolerant corn.”

Consider Geography

Of course, a grower’s location is also a significant factor in selecting the best weed control methods for an operation.

In Kansas, T.J. Binns, Syngenta agronomy service representative, says one weed gets most attention these days.

“Out in my world, here in western Kansas, the only weed we talk about right now — and any more — is Palmer amaranth,” Binns says. “We start with tillage, but it doesn’t help much with the Palmer because our Palmer starts emerging later than we plant our corn.”

That’s why he and his peers use different herbicides to attack the weeds head-on. For example, Binns says Acuron is an enormous advantage to growers in his area. He points out that weed control is difficult because there is no one-size-fits-all method. For example, cover cropping doesn’t work well in the dryer Kansas climate.

“The problem is we’re in a very arid environment,” he says. “Where we live, cover crops aren’t used very much because we barely have enough water.”

James agrees and adds that moisture is a make-or-break factor for crops.

“Moisture is normally our limiting factor. There have been several people trying to cover crop, and maybe it helps with the weeds, but it uses so much moisture that the crop yields are usually down in the dry land scenario,” he says. “Under irrigation, they’ve had some success, but it’s pretty limited unless you consider wheat a cover crop.”

Moisture and weather go hand-in-hand in preventing weeds. The weather, James says, heavily affects the possibility of weeds.

“If it’s really dry, which a lot of times it is, we don’t have any weeds sprouting,” James adds. “If we have moisture, we have weeds.”

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A child fighting leukemia in the Philippines faces a significant disadvantage compared with a child in this country. For one girl, the U.S. agricultural community stepped up to make a difference. Thanks to Bob Kemerait, Ph.D., extension specialist in the College of Agriculture and Environmental Sciences at the University of Georgia, the world has gotten a little smaller and a lot more compassionate.

Global Ties

“I work a lot in agriculture around the world,” Kemerait says. “And one of the places where I work is the Philippines.” Over the past 20 years, he has worked closely with colleagues in the country, visiting frequently to help the farmers there, and ultimately acquiring a wide array of friends. He and his wife, who is from the Philippines, also vacation there.

Kemerait’s trips are normally routed through Manila, and he’s come to know some of the families living in the capital city – including some from impoverished backgrounds. During his stays, he often invites them to participate in fun activities to bring a little sunshine into their lives.

On a visit to Manila several years ago, Kemerait invited Rema, a family friend, and her children to go swimming and then to eat at a local restaurant. Rema brought along her cousin’s 6-year-old daughter Rhianna “Ula” Jhane – whom she refers to as her niece.

“Ula stood out from the other children because, though she was small in stature, she was filled with exuberance,” Kemerait says.

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After Rema told me about Ula’s diagnosis, I decided I had to do something for that sweet girl, her mother and her aunt. I didn’t quite know what could be done; but I knew if Ula would fight, then I would fight beside her.

BOB KEMERAIT, PH.D. Extension Specialist in the College of Agriculture and Environmental Sciences at the University of Georgia

Ula lives with her mother, Josiephine, and her 3-year-old brother, Ar-J, in Navotas, a hard-scrabble coastal town located within Metro Manila.

Exuberance to Exhaustion

In 2021, Josiephine noticed that Ula was having difficulty walking and experiencing pain in her hips. The once active Ula had little to no energy. Josiephine scraped together the money to take Ula to the hospital. Following that visit, she called on Kemerait to help her understand the diagnosis. Kemerait and his wife, Pam, working through the medical system, eventually learned that Ula had Childhood Acute Lymphoblastic Leukemia (ALL).

Childhood ALL is a type of cancer that affects the blood and bone marrow and worsens without proper treatment, such as chemotherapy and radiation therapy. However, this type of treatment requires access to appropriate medical care and money to fund it, both of which can be major obstacles for children from Navotas. Kemerait’s research revealed that a child in the United States who is diagnosed with this same type of cancer has a 90% chance of survival; for a child without ready access to medical care, the disease is a death sentence. This disparity was inconceivable to him.

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“After Rema told me about Ula’s diagnosis, I decided I had to do something for that sweet girl, her mother and her aunt,” Kemerait says. “I didn’t quite know what could be done; but I knew if Ula would fight, then I would fight beside her.”

Social Support

As this ordeal developed, Kemerait shared Ula’s story on social media. The outpouring of support he received for Ula was immediate and astonishing. People he hadn’t seen in years — and current acquaintances like Chip Blalock, the executive director of the Sunbelt Agricultural Expo — wanted to help support Ula’s treatment.

“When a man like Dr. Kemerait champions a cause, you know it’s important,” Blalock says. “He has never asked for a dime [for Ula], and it shows how much people think of him when they are willing to help someone on the other side of the globe.”

Blalock decided to help Ula and asked if Kemerait had Venmo®. Kemerait responded, “Well, I do now.”

Kemerait also familiarized himself with other electronic payment platforms that made donations to Ula possible, including Zelle®, PayPal® and Cash App®.

Ag Steps Up

Kemerait says it’s incredible how many people in the industry came together to support a child thousands of miles away. Upon learning of Ula’s plight, attendees from various growers’ conferences came forward quietly to hand him donations. Meanwhile, farmers from four states reached out to contribute.

“At one growers’ conference, a colleague slipped a $100 bill in my hand,” Kemerait says. “Farmers from all over, some of whom I’ve never met personally, joined to support Ula’s cause.”

Randy Thrash of Randy Thrash Farms and Produce in Albany, Georgia, is one such farmer. Thrash regularly donates to St. Jude’s Children’s Hospital; but after reading Ula’s story on Facebook, he felt compelled to help.

“Farmers are some of the most compassionate people there are,” Thrash says. “I have more respect for Dr. Kemerait because of what he’s doing for that child.”

The financial support farmers and others in the ag community provided helped Ula celebrate her 11th birthday and Christmas with her family this past year.

Contributions for Ula’s treatment range from $10 to $5,000. In total this past year, Kemerait has raised close to $20,000. He carefully reviews bills from the hospital and attending physicians, then pays for Ula’s medical expenses and sends extra to Rema and Josiephine to buy nutritious food, such as bananas and other fresh fruits and vegetables, which would otherwise be out of reach financially for Ula’s family.

“It is important that Ula gets proper nutrition to help with the treatment,” Kemerait says. “It’s not only the illness we are treating, but we’re meeting her nutritional needs as well.”

Moving Forward

Kemerait emphasizes that this story is about Ula, and he’s just the liaison to the rest of the world. Unfortunately, it is a common story for families around the world without access to life-saving medical care.

For Ula, however, the future is bright. She finished an aggressive treatment regime and is now in the maintenance phase of fighting cancer. Her condition continues improving, and her doctors are optimistic she will recover. Josiephine is grateful for the care and love that everyone has shown for Ula and her family.

“I would do anything I could to make my Ula healthy again,” Josiephine says. “But life is hard here, and it is so very difficult to take care of medical needs for this cancer. I am grateful to my cousin Rema for helping us. It is because of Rema that we know Dr. Kemerait and his family. As a mother, I am so very grateful to them.”

The doctors say that it will take a total of three years before Ula will be cancer free. Even though she still worries about her daughter’s continued health care needs, Josiephine trusts Kemerait and those contributing to Ula’s expenses. Their help is a bright light in a once hopeless place.

Kemerait only intended to share Ula’s story with his social media network. Now, almost a year later, his intention has brought much needed medical assistance to Ula and united many in the single goal to save a child.

If you would like to follow Ula’s story, please contact Kemerait on Facebook, where he shares daily updates and pictures about Ula’s progress.

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There has been an ongoing debate in farm management circles about calculating cost per bushel versus cost per acre throughout our careers. To be honest, we’ve wrestled with this over time. At some points, cost per bushel seemed like a clever, highly intuitive metric, but at other times it feels like hand-waving and just dividing total costs by a different number.

The Rub

The crux of the debate gets down to a mismatch of units: Inputs are purchased (or applied) on a per acre basis, while outputs are sold on a per bushel basis. We probably know our cost per acre, but we usually don’t sell corn, soybean, or cotton by the acre.

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Reviewing budget projections on a per bushel basis can unlock powerful management insights. Great managers across business sectors understand their costs.

The biggest challenge with cost per acre is that we often don’t know what final yields will be until the end of the growing season. Even under irrigated conditions, yield variations can be enough to move the needle. Given this uncertainty and variability, cost per bushel can become confusing.

The short of this is simple — both have their advantages and flaws. Neither is a perfect, end-all measure of production expenses. At the end of the day, producers must know their costs — per bushel, per acre, total, etc.

Scenarios

To consider how per acre and per bushel can be relevant — or confusing — to producer decision making, consider the following scenarios:

  • Buying or renting land — The per acre measure has a strong advantage in farmland situations. Social norms are such that submitted farmland bids are on a per acre basis. While bidding might take place for the entire parcel, everyone is doing the per acre math in their head.While farms aren’t often purchased on a per bushel basis, it can be a helpful metric for benchmarking, especially across several years of data. Furthermore, it is common to see soil productivity metrics used to adjust for quality variations.
  • Selecting inputs — Comparing only per acre costs of alternative inputs can be very shortsighted, especially when there are different yield outcomes. There are two ways to reconcile cost and yield differences.The first option is to calculate the total per bushel cost of each alternative. For example, start with your initial budget assumptions and consider two alternative scenarios. For each herbicide program, plug in the yield assumptions and per acre costs. The program with the lowest per bushel cost is the better deal.The second option is partial budget analysis. For each alternative, consider the revenue gains minus the costs. The program with the highest return is preferred. For example, one fungicide program might cost $30 per acre and generate $45 per acre of additional revenue for a net benefit of $15 per acre. The alternative might cost $20 per acre but only generate $30 per acre in additional revenue. With both measures, the goal and outcome are the same: Don’t singularly focus on cost per acre and overlook potential yield differences.
  • Initial budget projections — When creating farm-level budget projections, per acre measures are often the natural starting point. As previously discussed, inputs are typically discussed on a per acre basis.While challenging, converting and reviewing initial budget projections on a per bushel basis can unlock powerful management insights. You will need to establish a consistent method for the “average” yield used to divide by, but doing this can be insightful for benchmarking across fields or over time. Again, this isn’t easy but can be a powerful tool when done appropriately.
  • Corn versus soybeans — This is the rare case where there is a clear winner: per acre basis. Compare the returns of alternative crops by comparing the per acre contribution margins or returns after variable expenses are paid — and what is left to cover the fixed expenses.The per bushel calculation of profits or contribution margins isn’t insightful at all. Why? Yields are different across the crops. For example, corn will almost always have small profits per bushel compared with soybeans but yield considerably more bushels. On the other hand, we’d expect soybeans to have more returns per bushel but considerably fewer bushels.
  • Early growing season marketing decisions — Again, this is the rub: Inputs are per acre, but you are selling bushels. Perhaps the most significant advantage of per bushel measurement is when making early growing season marketing decisions. Initial cost projections — from budgets — reported on a bushel basis are decisive for making preharvest marketing decisions. While yield assumption must be made, the per bushel measure is extremely valuable in sizing up any market rally opportunities.
  • Post-harvest marketing decisions — will often rely on both measures when making post-harvest marketing decisions. Starting on a per acre basis allows for all revenues to be considered (government payments, crop insurance proceeds, etc.). From there, producers can calculate the per bushel prices needed to reach their break-evens.There can be a few challenges when allocating fixed expenses, such as machinery or family labor, across different crops (irrigated versus non-irrigated) or a livestock enterprise. For example, the machinery cost of planted irrigated and non-irrigated corn will be about the same on a per acre basis, but the per bushel basis will differ given higher irrigated yields. Therefore, it’s helpful to start with the per acre basis, capture all the variables and convert the final numbers to the per bushel basis.
  • Yearly review — Per acre measures make managerial sense for reviewing the financial performance, especially when benchmarking over time or versus initial budgets.Producers will need to use caution with per bushel measures as production abnormalities, such as the drought of 2012 or prevented planting of 2019, can heavily skew the results. Did final production costs come in over budget because Mother Nature walloped yields or input expenses were high? The implications are not always intuitive.

The Big Picture

Most of the time, conversations and debates about the cost per bushel versus cost per acre miss the big picture: You have to know your costs! At the end of the day, this is an exercise of allocating costs over units. In some cases, it makes more sense to consider the cost structure on an input basis (per acre). In other situations, it makes more sense to consider the cost structure on an output basis (per bushel). Set procedures and practices in place that allow you to have an accurate and up-to-date understanding of your costs. Then you can start to decide which metric is more insightful and intuitive for the questions at hand.

While we’ve focused on crops, the lessons are similar for livestock — cost per acre of pasture versus per cow (or calf sold), pens sold versus head (or pounds) of cattle sold, or per stall versus per hog.

This leads us to the last point: Sometimes, this debate comes across as an ag-related problem. In reality, it’s a situation every business and sector face. Only a few retailers buy bananas at wholesale and pass the same product along at a higher price. Airlines have seats, fuel, trips and hours flown as inputs, with passengers, seats and revenues as outputs. Whether a farmer or ag input supplier, great managers know their costs and challenge their thinking to generate, capture and utilize insights. Start simple and build a system that works for you.

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Corn popping through freshly planted soil gives farmers a little spring in their steps. There’s nothing quite like it for folks who love farming.

All too often, however, that step goes flat when farmers see tough weeds emerge alongside those corn plants. Those weeds reduce yield starting with that first leaf. With widespread herbicide resistance increasingly commonplace in weeds, farmers must develop management plans to wipe out weeds and protect their yield.

Crop rotation, which in corn country generally means planting soybean in alternate seasons, is one tactic to consider. Crop rotation gives farmers the option to use different herbicides, increasing the modes of action available to combat weeds.

“A comprehensive weed control program should include tools to reduce incidence of herbicide resistance,” says Sudeep Mathew, mid-Atlantic area agronomic service representative at Syngenta. “In the mid-Atlantic, we not only have resistant Palmer amaranth, common ragweed and grasses like barnyardgrass, foxtail and Italian ryegrass, we also have resistant horseweed, which was first identified in this area.”

Resistant weeds vary between regions. In North Dakota, waterhemp and kochia show resistance to both glyphosate and ALS inhibitor herbicides, says Joe Ikley, Ph.D., assistant professor and extension weed specialist at North Dakota State University.

Waterhemp also causes problems in the western Corn Belt, says Bill Johnson, Ph.D, Purdue University weed science professor. However, Johnson points out, farmers farther east are more concerned with weeds like giant ragweed, foxtail, lambsquarter and morningglory.

In the mid-South, Palmer amaranth resistance to glyphosate appeared more than a decade ago and presents a particular challenge.

“Mississippi may rank at the top of the list for resistant weeds,” says Tripp Walker, Syngenta area agronomy service representative in Mississippi and north Alabama. “I think there are 13 weed species here with herbicide resistance. To get control now, you have to diversify your strategy.”

Plan Intensively

Starting with a solid weed management plan is essential.

“Crop rotation is really your biggest strength,” Walker says. “If you’re having a resistant-weed problem, rotate to a monocot crop like corn on some acreage. Then you have more tools for effective weed control. You can reduce the weed seed bank that way.”

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We spray Acuron as we plant, right behind the planter. That way, the ground is fresh. There’s a little moisture in the soil, which helps activate the herbicide.

Al Hill Owner of High Yield Farms in Deep Run, North Carolina

Walker and Mathew recommend a two-pass herbicide approach on fields where potentially resistant weeds are present. They say the best approach is to consider these weeds herbicide-resistant from the beginning.

“You have to think differently these days. Using multiple modes of action is the key,” Mathew says. “Be sure to use herbicides effective against the weeds. If you use a preemergence herbicide at corn planting, plan to come back within 21 to 28 days with a post-emergence application of a different herbicide. Overlay a residual product before canopy closure.”

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According to Walker, growers should design weed-control programs that include pre- and post-emergence applications.

“You should design a total weed control program with a preemergence herbicide followed by a post-emergence material as a priority, and use multiple modes of action,” Walker says.

Additionally, Johnson says, “Scout fields. See what’s leaking through.”

For effective control and to anticipate herbicide resistance, Johnson says, “Most Indiana farmers use a glyphosate product along with something else as a post-emergence program.”

Acuron® herbicide from Syngenta is effective preemergence because it combines four different active ingredients with three modes of action. Acuron contains atrazine, mesotrione, S-metolachlor — also sold under the brand names of AAtrex®, Callisto®, and Dual II Magnum® herbicides, respectively, — and bicyclopyrone, a novel active ingredient designed to improve weed control and consistency. The four active ingredients together provide broadleaf and grass control for over 70 weed species.

Ikley likes to see farmers use a multiple mode-of-action approach like that.

“When you get three or four active ingredients spanning three modes of action, you’re more likely to help your situation with resistance,” he says. “Most of our soybean farmers have gone to Roundup Ready 2 Xtend® or Enlist E3® soybean technology, which helps with resistance.”

Choose Wisely

It is important for farmers to stay alert and inspect your fields for escaped weeds. Johnson says weeds like velvetleaf, cocklebur and jimsonweed, which seemed to be easily controlled a few years ago, have returned in some areas. In North Dakota, Ikely says he’s seeing more wild oats and green foxtail. Waterhemp, too, seems to be a never-ending challenge — with seeds arriving in floodwaters as well as being moved by harvest equipment.

Fortunately, growers have choices. Halex® GT and Acuron® GT herbicides are effective post-emergence herbicide options because they provide both the control of emerged and unemerged weeds. Acuron GT is a new herbicide developed specifically for postemergence. Because it contains the full-season label rate of bicyclopyrone, it cannot be used if Acuron was used preemergence. However, if growers want to use Acuron GT postemergence, they can use Lexar® EZ, Lumax® EZ or Bicep II Magnum® preemergence.

Al Hill, who farms 3,100 acres of corn and soybeans in Deep Run, North Carolina, says a one-pass approach in corn using Acuron herbicide, a premix formulation of bicyclopyrone, mesotrione, S-metolachlor and atrazine, preemergence with a burndown application, such as Gramoxone® SL 3.0 herbicide, works well for him.

“Doing it in one pass simplifies things and works for me,” Hill says. “I start with a fall application of [herbicide] to keep weeds from overwintering. We tend to have mild winters in eastern North Carolina, and this keeps weeds from popping up. Then I come back with Gramoxone® SL 3.0 and with Acuron when we plant corn in late March and early April. We spray Acuron as we plant, right behind the planter. That way, the ground is fresh. There’s a little moisture in the soil, which helps activate the herbicide.”

Hill also strip-tills corn in 20-inch rows so it can canopy quickly, shading out late weed emergence.

Walker notices farmers taking more comprehensive approaches to weed management, which he sees as necessary to deal with today’s weeds. Farmers, he says, are more innovative because they’ve seen the writing on the wall and know long-term farming requires maintaining soil health and reducing the seed bank.

Don’t Delay

A quick start to corn weed control programs protects against yield loss. Mathew advises initiating weed removal at least four to five days before the critical period of weed control, which is the V1 to V11 corn growth stages.

Some weeds can surprise you with lightning-fast growth. Palmer amaranth, for example, can grow two-to-three inches a day.

“People underestimate it,” Mathew says. “They see it, then look at it again in four or five days, and it’s gone from a two-leaf weed to a six-leaf weed. Don’t underestimate these weeds. Be sure you apply proper herbicide rates to control them.”

“Research tells us that for every leaf stage of delay from V1 to V11, there’s a 2% yield loss,” Mathew continues. “You can easily get a 10% yield loss just by delaying post-emergence herbicides. For $6 per bushel corn, that adds up.”

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COVID-19 chucked a boulder into the global and local supply chain ponds, and the resulting waves will ripple outward for quite some time. With the surplus safety net gone, securing supplies last minute is no longer an option. Farmers, retailers and manufacturers who plan ahead and stay flexible are better situated to stay afloat until things settle.

“In just two years, as a country and industry, we’ve gone from essentially free-flowing supply of all materials to an environment where there’s a strained supply of many,” says Kevin Duhe, head of supply for Syngenta North America. “In the ag industry and even in our personal lives, we’ve seen — and will continue to see — longer lead times for ordering and receiving all sorts of goods.”

While suppliers of crop protection products fared better in the short term than those needing microchips, there’s still cause for long-term concern. Conditions in 2022 create an especially challenging situation for crop protection products.

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Retailers and farmers will need to lean into their agronomic teams. Agronomists should be ready with recommendations that can help maximize a farmer’s return on investment through the best inputs available.

Jeff Cecil Head of Crop Protection Marketing at Syngenta

Find Balance

Farmers are faced with a careful balancing act in 2022. While input costs have risen substantially due to various factors, including inflation and exponential increases in transportation costs, strong commodity markets continue to offer profit opportunities.

These factors combine to drive increased demand for crop protection products. Growers must plan long-term to ensure the necessary products and tools are available to help them protect higher-than-normal investments, maximize yields and increase income potential.

When planning for crop protection purchases, growers should include a fluid assessment of current pricing, as experts believe inflation will continue accelerating through 2022. These factors contribute to pricing increases on products in most industries, including crop protection.

“Retailers and farmers will need to lean into their agronomic teams,” says Jeff Cecil, Syngenta head of crop protection marketing. “Agronomists should be ready with recommendations that can help maximize a farmer’s return on investment through the best inputs available. This includes where a farm will get the biggest benefit as they navigate increasing costs and potentially limited product availability.”

Consider Supply Chain Complexities

Syngenta is well-positioned to meet farmer needs, Duhe says. The company planned for larger supplies of its crop protection products for the 2022 growing season than in 2021, and all products in the portfolio should be available.

“We don’t have an unlimited supply, but we’re in a good spot,” Duhe says.

That’s not to say all products will be freely available all season. When there’s a shortage of a major product, such as the glyphosate shortfall Bayer announced, there is a domino effect on the supply chain. In this situation, demand for herbicides that work similarly increases, explains Mike Hollands, Syngenta head of global supply and operations.

Crop protection products are especially vulnerable to supply chain disruption for several reasons. For one, most require months to produce. Then, there’s the global travel time.

Crop protection product manufacturing spans the globe — with the early stages of the process sometimes starting in distant locations like China and India. Multiple stages require fabrication of chemicals, and manufacturers move products several times before they get to local formulation and packaging.

This complexity creates many potential pain points, especially since each product contains multiple components — chemicals, stabilizers, surfactants, colorants, plastic bottles, caps, labels, printer ink, glue, boxes and more.

“Not having any one of those components can delay or keep a product off the shelf,” Duhe says. “Everything might be done, and then the cap didn’t show up because the plant that produced it had to slow down due to COVID. That throws off the schedule by a week or more. Those situations aren’t easy to plan for, but that’s what we’re all adapting to — us, retailers and farmers.”

Have a Long-Term Plan

When the pandemic hit, those who had full pantries and freezers — maybe even a spare roll of toilet paper or two — were probably less stressed. The pantries at Syngenta were well-stocked, company leaders point out, thanks to years of strategic long-term planning.

“What positioned Syngenta so well to handle upheaval in the supply chain compared with other crop protection companies and industries is that long before any crisis hit, we formed long-term strategic collaborations across our entire supply chain,” Duhe says.

The company and its customers continue to realize benefits from its strategic planning as the world hopscotches from one supply chain disaster to the next, including a global pandemic, canal-blocking ships, clogged ports, power outages in China, and war.

Syngenta secured long-term contracts with guaranteed levels of service and supply end to end — from raw materials to packaging to transportation. And as a long-standing contracted partner, Syngenta has priority when orders continue to come in but supplies or space on transport run low.

One way Syngenta planned ahead for potential disruptions was locking in rates with partners. For example, Duhe says, Syngenta signed a long-term contract with global shipping titan Maersk years ago. Prior to 2020, the Maersk deal may not have looked so savvy to outsiders. However, it wound up cementing rates and securing a consistent supply of space on Maersk container ships during an unexpectedly turbulent time.

“Traditionally, spot market buys could sometimes be lower than the rate Syngenta secured by contract. But by 2020, costs had skyrocketed from $3,000 to $20,000 to get a shipping container from China to the United States,” Duhe says.

While companies needed to adjust even contractual rates with such a wild swing, Syngenta was positioned for capacity and cost benefits due to its long-term supplier relationships.

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Track for Success

An innovative tracking system also helps Syngenta — literally in this case — navigate around supply chain issues. The company invested in a cutting-edge global online tracking and visibility platform that helps it assess where in the world its products are at all times, Duhe says.

“We have a global team with people who work around the clock in all time zones and constantly track our raw materials and products around the world,” he adds.

The real-time digital tracking and constant surveillance allow Syngenta to detect transit and supply problems sooner. When issues arise, it can redirect and adjust plans to keep things moving.

Even as the world optimistically looks for the pandemic to wind down, supply chain issues persist. Syngenta supply teams are doing their best to insulate farmers from feeling the effects, but it’s an ongoing battle. It will take time to work through global supply chain backlogs. Cecil and Duhe point out that careful planning and contingency plans are always good business strategies. They’re even more critical now.