Machinery and other input costs determine profits more than prices, say Kansas growers Terry Kastens, his son Dietrich and brother Gary.

Terry’s part-time job as Extension ag economist for Kansas State University has helped him to scrutinize the balance between costs and profits.

The Kastens plug in price vs. inputs numbers right and left for their corn, wheat and sorghum farm in northwest Kansas outside Atwood.

While conducting statewide ag econ seminars, Terry sees strong opportunities to lock in solid corn prices. “Marketing corn and wheat is almost easy now,” he says. “If you have sufficient rainfall or irrigation, you can go out three years and price corn in the high $3.90s or low $4 range.”

But even at that level, the profit potential can be in jeopardy if inputs are not managed as well or better than prices, he says.

These 100% no-till growers have upgraded their machinery and technology to match their farm’s 20-in. annual rainfall (no irrigation). Corn yields average below 100 bu./acre, so cost management is a must. And it starts with equipment.

To continue reading this article about managing input costs to assure profitability, click here:

By Larry Stalcup, Corn & Soybean Digest

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