world market
America gears itself up to
world market
US arable farming is changing dramatically to produce
a leaner, more efficient industry, ready to seize world
markets. farmers weekly farmer focus writer Jim Bullock,
who farms near Malvern, Worcs, visited cereal growers
in Oklahoma and Texas earlier this year to find out
who we are competing with
CUTS in government support and falling commodity prices have prompted radical restructuring of many US farms in recent years.
Fewer farmers are farming more land, with ever larger machines. Precision farming, GM crops and no-tillage drilling are key technical approaches being used to slash production costs.
Farm sizes have increased to such an extent that many farmers now own just 10-20% of the area they farm. Competition for land has also risen, holding rents up despite falling returns.
Rents are usually based on either 5% of the land value in an area or £18-£22/t of the lands yield potential.
Farmers may have as many as five or six landlords, usually retired farmers whose children have left the farm to work elsewhere. Some are still part-time farmers with a few cattle and a job off the farm.
Some land is share cropped, usually on a one-third/two-thirds basis, but this is becoming less popular, as it needs more administration.
Farmers are interested in taking on more land, but few will do so at any cost. One example was a farmer renting land for £334/ha (£135/acre) which could only leave a possible margin of £15/ha (£6/acre) growing maize. This was considered a very unwise business decision.
Most farmers believe it is better to make more from each acre on their existing land before renting extra at high prices.
Monitoring costs is seen to be important and the use of computers on farms is almost universal.
US farmers record machinery costs more thoroughly than their UK counterparts and most include them in gross margins to give a better comparison of crop performance. Most include land costs, too, where applicable, so a true cost/ton can easily be derived.
The US governments "Freedom to Farm" bill is seen by most as beneficial, allowing a greater choice in cropping and rotations.
Few farmers mention that they receive government subsidies, which will all be phased out by the year 2003.
Farmers visited felt EU area payments were enough to cover extra land costs and hefty legislation on this side of the Atlantic.
Most would be happy to take part in a quality assurance scheme, if their grain buyer required them to do so. But they commented that they felt it was unnecessary.
Non-tillage drilling is seen to offer a number of key advantages in the present economic climate – reducing labour and power needs to one man and one 250hp tractor on 800ha (2000 acres). High outputs and quick turn around times between crops are also possible, allowing double cropping to boost margins.
Improved soil structure and long term sustainability of soils through reduced erosion and moisture loss and increased organic matter also lead to increased yields.
The scope to do contract work for other farmers who cannot justify their own machine, also appeals. But it is acknowledged that a high level of management is required and no-till drills are expensive to buy.
Work is now being done to find rotations which suit no-till drilling, focusing on trash management and weed and disease control. A double wheat, double break rotation has given wheat yields up to 20% higher than a wheat, break, wheat, break rotation, due to reduced soil borne disease, possibly take-all.
Precision farming is also being widely adopted by combinable crop growers in Texas and Oklahoma, who use it to accurately monitor and control costs.
Most new combines now come with a yield monitor and mapping system. Users reason that it will take three years before any positive benefits are seen, so the sooner they start the better.
In the long term users not only want to vary fertiliser and agrochemical inputs, but also to use the system to monitor and vary cultivations.
In future it will be possible (through the use of aerial photography) to determine the water holding capacity of soils and hence the lands ability to respond to inputs, especially plant populations.
Other precision farming systems being used on farms included hand held positioners for crop walking and GPS on sprayers for accurate bout marking; there being no tramlines in Oklahoma and Texas.
But the lack of tramlines in not hampering US growers as they gear up to cope with world market prices. They are a long way down that road already. UK growers beware!
GM CROPS
All the farms visited were either growing GM crops or were prepared to do so. Roundup-Ready soya beans were the most popular, cutting the cost of weed control by up to 60%. Herbicides are the most expensive crop input, so this has cut the cost of production dramatically. Farmers see GM crops as a means of competing on the world market when subsidies disappear. No one could believe EU farmers were not going to use GM crops. "How will you compete with those that do?" they ask.
Butch Aycock, McKinney, Nr Dallas, Texas
Butch farms 1620ha (4000 acres) with two full-time men and a summer part time. Just one-tenth of the farm is owned, the rest being rented at £31-£62/ha (£12.50-£25/acre). Rainfall of 1000mm (40in) supports a rotation of one-third wheat and two-thirds corn (maize).
The soft milling wheat is sown in Sept/Oct at 146kg/ha (130lb/acre) using a 9m (30ft) JD disc drill, which is used after two passes with tines and one pass with discs. Pre-drilling Roundup (glyphosate) costs just £3.50/litre (£16/gal) and is used wherever weeds are present. Phosphate is combine drilled and nitrogen top dressed in spring at up to 187kg/ha (150 units/acre).
Crops are sprayed once with a sulfonyl-urea herbicide. Insecticide is sometimes used in autumn/winter to control aphids carrying BYDV, but fungicide is not a regular input.
Harvest involves two JD 9600 combines, usually starting in early June. Yield is usually 3.5-4.9t/ha (1.4-2t/acre), but topped 4.9t/ha this year.
Grain is sold direct off the combine to a Cargill mill at Fort Worth 60 miles away or goes to a local store either for immediate sale or for storage and sale later in the year.
Some grain is harvested for certified seed and stored on the farm for sale to local farmers priced £78/t. Although that represents a £22.50/t premium, seed production is hardly worth the effort, says Mr Aycock.
Watson Family, Leonard, Texas
James Watson, his father, uncle and son farm 1620ha (4000 acres), of which 15% is owned, and the rest rented at £31-£84/ha (£12.50-£35/acre) from five different land owners.
Cropping is quarter wheat, half maize and quarter grass for up to 1200 cattle. There is no employed labour and the wives do office work as well as odd jobs on the farm.
Three BIG As do 32,000ha (80,000 acres) of contract spraying and fertiliser spreading a season, up to 40 miles from the farm. Spraying charges are about £4.57/ha (£1.85/acre), depending on location and area to be covered. The family also supplies liquid fertiliser and agrochemicals.
Soft milling wheat is sown using a JD disc drill after maize has been disced up to three times. The production system is similar to Butch Aycocks, but cattle are often grazed on wheat during winter, so liquid autumn N is applied at drilling.
Harvesting is in early June, using two John Deere combines, one fitted with a GreenStar yield mapping system. The other machine is a 10-year-old 7700. There is no storage on the farm, so all grain goes to the local store or Cargills Fort Worth mill for immediate sale. Yields are 3.45-5.6t/ha (1.4-2.25 t/acre).
Wheat costings
Costs £/ha
Seed, fert, spray 123
Machinery 61
Sales
4.9t/ha at £63/t 311
Area aid 37
Margin 164
Tony Kodesh, Diamond K Farms, Red Rock, Oklahoma
Tony farms 1000ha (2500 acres), of which he owns 400ha (1000 acres).The rest is rented for £46-£109/ha (£19-£44/acre). Cropping includes hard wheat, cotton and soya.
So far this season 800ha (2000 acres) of contract drilling has been done at £20/ha (£8/acre) for no-till or £15/ha (£6/acre) into a conventional seed-bed. Contract spraying is charged at £4.45/ha (£1.80/acre), including water supply.
Double cropping sees grain sorghum and soya sown into wheat stubble in June, the soya yielding about 1.85t/ha (0.75t/acre) when it is harvested later the same year. Wheat is often grazed during the winter and yields 2.7-5.5t/ha (1.1-2.22t/acre).
The farm is capable of some high outputs when double cropping and cattle grazing are included; 220kg/ha of beef, 5.3t/ha of wheat and 3.5t/ha of soya beans in 12 months, giving a gross output of £1022/ha (£414/acre).
But such outputs are not achieved regularly, notes Mr Kodesh.
Crops are drilled using a 9m (30ft) John-Deere No-Till drill with Seedstar monitoring, behind a JD8400 tractor working at 6.5mph. Output is 9ha/hour (22 acres/hour) with 190mm (7.5in) row spacing.
The No-Till drill has transformed Mr Kodeshs farming system, allowing double cropping and contract drilling for £20/ha (£8/acre) to boost farm income.
During the transition from ploughing, to minimal cultivations, to No-Till drilling soil organic levels increased from 1% to 4%, making soil working easier. Trash now left on the surface helps retain soil moisture for double cropping. A lot of Roundup is used pre-drilling and soya is a Roundup-Ready GM variety.
Mr Kodesh employs no permanent labour, relying on son Scott aged 17, plus an ex-employee at harvest. His brother farms across the road and shares some of the work.
Mr Kodesh is involved with the Oklahoma Wheat Growers Association and would have no problems qualifying for an ACCS-style scheme if required.
Wheat costings
Costs £/ha
Seed, fert, spray 170
Machinery 46
Sales
5t at £78/t 390
Area aid 37
Margin 211
NB: Then add double crop.
Paul Regeir, Deer Creek, Blackwell, Oklahoma
Paul farms 2400ha (6000 acres), one-third owned, the rest rented for £31-£62/ha (£12.50-£25/acre.)
Cropping is now wheat, cotton, sorghum and soya. It used to be continuous wheat.
Wheat is established using tines and discs followed by a new disc air drill rather than a no-till. Row crops are established using a JD planter recently fitted with serrated disc openers to allow no-till planting of soya and sorghum double crop after wheat.
Three new JD 9610 combines, two fitted with GreenStar GPS, and a CTS also fitted with GreenStar, harvest his crops and a further 5700ha (14,000 acres) on contract. Of the contract area 4000ha (10,000 acres) is wheat, up to 600 miles away.
Contract combining charges are £19/ha (£7.50/acre) plus £2.75/t transport for yields up to 2.4t/ha (1t/acre), then a few cents more depending on distances to be hauled and yield.
Contract discing and heavy cultivating are both charged at £6.20/ha (£2.50/acre) and drilling at £9.25/ha (£3.75/acre).
Paul tries to cover all his machinery costs by doing contract work.
Labour consists of Paul, wife Barbara, father in law and two sons aged 9 and 11, with trucks and drivers hired as needed during harvest.
Johnson Grain, Enid
Johnson Grain at Enid is a typical privately owned store with a capacity of 450,000t. Half the wheat goes for export using the US rail network, half for home consumption.
Wheat is tested for bushel weight, add mix (max 2%), protein (min 12/13%) and moisture (max 9/10% max) before tipping. Extensive facilities for storing different grades and moisture percentages mean grain can be blended to make up parcels of consistent quality.
The store turns lorries about in 30min, including testing, weighing and unloading, making it popular with local farmers.
It stays open seven days a week when necessary, and as long during the day as trucks arrive to unload. More product in means more profit.
Farmers are generally happy with stores like Johnsons, but less so with bigger corporations like Cargill. They feel multinationals take too much margin.
Little grain is stored on-farm in Texas and Oklahoma, just 8% compared with 30% nationally. This is due to problems with weevils and other insects in such high temperatures plus the fact that farms have expanded so much in the past 10 years.
GMCROPS
All the farms visited were either growing GM crops or were prepared to do so. Roundup-Ready soya beans were the most popular, cutting the cost of weed control by up to 60%. Herbicides are the most expensive input, so this has cut the cost of production dramatically. Farmers see GM crops as a means of competing on the world market when subsidies disappear. No one could believe EU farmers were not going to use GM crops. "How will you compete with those that do?" they ask.
BUTCH AYCOCK
Butch Aycock, McKinney, Nr Dallas, Texas
Butch farms 1620ha (4000 acres) with two full-time men and a summer part time. Just one-tenth of the farm is owned, the rest being rented at £31-£62/ha (£12.50-£25/acre). Rainfall of 1000mm (40in) supports a rotation of one-third wheat and two-thirds corn (maize).
The soft milling wheat is sown in Sept/Oct at 146kg/ha (130lb/acre) using a 9m (30ft) JD disc drill, which is used after two passes with tines and one pass with discs. Pre-drilling Roundup (glyphosate) costs just £3.50/litre (£16/gal) and is used wherever weeds are present. Phosphate is combine drilled and nitrogen top dressed in spring at up to 187kg/ha (150 units/acre).
Crops are sprayed once with a sulfonyl-urea herbicide. Insecticide is sometimes used in autumn/winter to control aphids carrying BYDV, but fungicide is not a regular input.
Harvest involves two JD 9600 combines, usually starting in early June. Yield is usually 3.5-4.9t/ha (1.4-2t/acre), but topped 4.9t/ha this year.
Grain is sold direct off the combine to a Cargill mill at Fort Worth 60 miles away or goes to a local store either for immediate sale or for storage and sale later in the year.
Some grain is harvested for certified seed and stored on the farm for sale to local farmers priced £78/t. Although that represents a £22.50/t premium, seed production is hardly worth the effort, says Mr Aycock.
High output machinery deployed across big farmed areas is keeping US arable men profitable as world market prices bite into margins.
TONY KODESH
Tony Kodesh, Diamond K Farms, Red Rock, Oklahoma
Tony farms 1000ha (2500 acres), of which he owns 400ha (1000 acres).
Cropping includes hard wheat, cotton and soya.So far this season 800ha (2000 acres) of contract drilling has been done at £20/ha (£8/acre) for no-till or £15/ha (£6/acre) into a conventional seed-bed. Contract spraying is charged at £4.45/ha (£1.80/acre),
Double cropping sees grain sorghum and soya sown into wheat stubble in June, the soya yielding about 1.85t/ha (0.75t/acre) when it is harvested later the same year. Wheat is often grazed during the winter and yields 2.7-5.5t/ha (1.1-2.22t/acre).
The farm is capable of some high outputs when double cropping and cattle grazing are included; 220kg/ha of beef, 5.3t/ha of wheat and 3.5t/ha of soya beans in 12 months, giving a gross output of £1022/ha (£414/acre).But such outputs are not achieved regularly, notes Mr Kodesh.
Crops are drilled using a 9m (30ft) John-Deere No-Till drill with Seedstar monitoring, behind a JD8400 tractor working at 6.5mph. Output is 9ha/hour (22 acres/hour) with 190mm (7.5in) row spacing.The No-Till drill has transformed Mr Kodeshs farming system, allowing double cropping and contract drilling for £20/ha (£8/acre) to boost farm income.
During the transition from ploughing, to minimal cultivations, to No-Till drilling soil organic levels increased from 1% to 4%, making soil working easier.Mr Kodesh is involved with the Oklahoma Wheat Growers Association and would have no problems qualifying for an ACCS-style scheme if required.
Wheat costings £/ha
Costs
Seed, fertiliser, spray 170
Machinery 46
Sales
5t at £78/t 390
Area aid 37
Margin 211
NB: Then add double crop.
PAUL REGEIR
Paul Regeir, Deer Creek, Blackwell, Oklahoma
Paul farms 2400ha (6000 acres), one-third owned, the rest rented for £31-£62/ha (£12.50-£25/acre.) Cropping is now wheat, cotton, sorghum and soya. It used to be continuous wheat.
Wheat is established using tines and discs followed by a new disc air drill rather than a no-till. Row crops are established using a JD planter recently fitted with serrated disc openers to allow no-till planting of soya and sorghum double crop after wheat.
Three new JD 9610 combines, two fitted with GreenStar GPS, and a CTS also fitted with GreenStar, harvest his crops and a further 5700ha (14,000 acres) on contract. Of the contract area 4000ha (10,000 acres) is wheat, up to 600 miles away.
Contract combining charges are £19/ha (£7.50/acre) plus £2.75/t transport for yields up to 2.4t/ha (1t/acre), then a few cents more depending on distances to be hauled and yield. Contract discing and heavy cultivating are both charged at £6.20/ha (£2.50/acre) and drilling at £9.25/ha (£3.75/acre).
Paul tries to cover all his machinery costs by doing contract work. Labour consists of Paul, wife Barbara, father in law and two sons aged 9 and 11, with trucks and drivers hired as needed during harvest.
WATSON FAMILY
Watson Family, Leonard, Texas
James Watson, his father, uncle and brother farm 1620ha (4000 acres), of which 15% is owned, and the rest rented at £31-£84/ha (£12.50-£35/acre) from five different land owners.
Cropping is quarter wheat, half maize and quarter grass for up to 1200 cattle. There is no employed labour and the wives do office work as well as odd jobs on the farm.
Three BIG As do 32,000ha (80,000 acres) of contract spraying and fertiliser spreading a season, up to 40 miles from the farm. Spraying charges are about £4.57/ha (£1.85/acre), depending on location and area to be covered. The family also supplies liquid fertiliser and agrochemicals.
Soft milling wheat is sown using a JD disc drill after maize has been disced up to three times. The production system is similar to Butch Aycocks, but cattle are often grazed on wheat during winter, so liquid autumn N is applied at drilling.
Harvesting is in early June, using two John Deere combines, one fitted with a GreenStar yield mapping system. The other machine is a 10-year-old 7700. There is no storage on the farm, so all grain goes to the local store or Cargills Fort Worth mill for immediate sale. Yields are 3.45-5.6t/ha (1.4-2.25 t/acre).
Wheat costings (£/ha)
Costs
Seed, fertiliser, spray 123
Machinery 61
Sales
4.9t/ha at £63/t 311
Area aid 37
Margin 164