Conscientious Cost Cutting

Our best and most desirable products, likely our competitors’ as well, will always be the most expensive to plant. When margins were fatter, growers could afford to plant the best genetics and traits on all acres plus be rewarded with better performance. With current commodity pricing, it will be worthwhile to evaluate every acre and product choice to squeeze as much as humanly possible from your cost equation without giving up too much from your production.

There’s been a lot of discussion this winter about reducing the number of traits used on farm with some growers thinking that conventional hybrids would be the way to go. Sales of conventional hybrids at Renk Seed have not changed for several years, so growers have not cut traits from the product mix. However, sales of double stacks now exceed sales of triples and SmartStax®. This makes sense on rotated acres and I would like to reinforce that growers should match the trait mix to the acre rather than one mix fits all acres.

Conventional hybrids might make sense on acres with low risk of insect and weed pressure. Whenever this question comes up at field days or winter meetings, I remind producers that conventional hybrids were grown for many years and remember to “scout and spray” if problems arise.

Renk Seed aggressively prices older, proven hybrids when newer genetics are introduced that will in time replace the older product. Quantity and age of the inventory will dictate how aggressive the price. With a high percentage of our seed sales as double stacks and higher, most of the products with a more attractive price are trait stacks. We have several SmartStax® hybrids priced like VT2P products. Some “doubles” are priced like single trait Roundup. These value-priced products make the most sense on acres with average or below productivity. Unless the crop is under severe stress, newer genetics won’t produce enough extra grain on average acres to overcome the cost difference.

After two back-to-back record seed crops at Renk I think growers can expect to see a bigger spread between newer and older hybrids for the 2019 season. Many dealers are most comfortable selling the plot-winning hybrids. I challenge you to quiz them a bit about potential opportunities to reduce your per acre cost for acres where you don’t need the best genetics
and it makes sense to reduce your cost.

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