6 Ways to Protect Organic Profits in Uncertain Times

  • Published On: October 6, 2020
  • Author: Bryce Irlbeck

Economic uncertainty hits all sectors of the agriculture industry, including organics. The good news? It’s possible to safeguard your organic profits.

For a start, it’s even more important for organic farmers to focus on executing their operations really well. The better the execution, the better you can weather the market conditions and remain profitable.

Here are 6 ways to maximize your operations to protect your organic income.

1. Write down your plan

One of most important keys to success in organics, regardless of the market, is a written plan. This is especially true if you’re new to organic farming.

Like it or not, the knowledge and intuition you acquired over the years with conventional farming is not sufficient for your acres in transition or your organic acres. Those experiences taught you what to do when problems arise on your conventional operation, but this is different. You’ll be rewarded if you think through your decisions in advance. And you set yourself up to win when you base those decisions on actual data.

Take the time to put pencil to paper. One benefit is that you’ll be able to stay calm when stressful situations pop up. You can make smart decisions. It’s also a good idea to think through potential challenges, such as delayed planting. Creating backup plans greatly reduces the potential for mistakes that result from a hasty decision process. Or from acting based on emotion rather than facts.

Use a platform like MyFarm to create and track your plans. It allows you to access information through your smartphone or tablet. You can always get to your data or see what field plan activities require attention.

2. Communicate frequently

Sometimes the best made plans have to change. That’s life. And that’s organic farming. When it happens, it’s important everyone on the farm is on the same page.

On B&B Irlbeck Farms, we sit down together every night when it’s necessary to evaluate the next day’s plans. We always make sure we can still do what we planned to do. If we can’t, then we determine a new course of action such as hiring extra labor or changing field work dates. Otherwise, we put our organic profits at risk.

3. Understand your weather windows to maximize your time

Another key to maximizing your organic profits is maximizing your operations. You need to understand your resource limits including time, labor, and equipment.

Weather can be your biggest time limit. And it is, without question, the biggest challenge organic farmers face when executing their plans. We’re reliant on fieldwork to control weeds, so we have to be sure we have the capacity to get those critical tasks done in the time that’s available to us. To pull that off, here’s what you need to ask yourself:

  • How many hours it will take to go across my acres?
  • How much time do I realistically have to cover those acres?
  • Do I have enough labor and equipment to execute the tasks in my planned timeframe?

To help answer those questions, AgriSecure teamed up with Farmers Business Network (FBN). We compiled historical weather data for various regions in order to determine how many working days are available on average in a given month. AgriSecure customers can contact their account executives who will be happy to share this data with them. 

Pairing the weather information with MyFarm’s Field Activity tool goes one step further. It allows growers to ensure they have enough buffer capacity to handle worst case scenarios. If you only have a minimum of ten days to get your fieldwork done versus the average 15 days, can you still complete it on time?

Knowing your average time windows for getting critical fieldwork done can also help you maximize your capacity in best case scenarios. For example, this year we had good weather windows on Rhea Brothers Farm. This gave us the opportunity to space out our planting so we wouldn’t need to do weed control on all of our acres at the same time.

And consider testing . . .

On my farm, we also maximized our time by getting saturated cold germ tests on our seed hybrids and varieties. This let us know which ones performed better under adverse conditions. In times where planting conditions aren’t as ideal, we can plant those seeds early, and this will allow us to extend our planting window to better spread out our fieldwork.

4. Balance the short term with the long term

It’s tempting in times like these to want to maximize organic profits too quickly. We want our economic return, and we want it now. But it’s actually better to adopt a forward-thinking approach and focus on maximizing the long-term average return (versus a specific year) across your organic acres. If you’re like many organic farmers, your organic corn fields will be the most profitable ones in the season they’re grown. But it’s the other years of the rotation that set you up for success.

For example, let’s say you’re debating between organic soybeans and organic wheat the year before organic corn. You may see it’s more profitable to grow soybeans. But that is short-term thinking. Wheat is more likely to set you up for success with organic corn because you’ll have less risk that weed pressure will get away from you. You could also plant a cover crop that would provide some fertility for the following corn crop.

You need to think about whether the money you’ll make this year on a less profitable crop is going to offset the reduction in earnings on a more profitable crop later.

Of course, the only way to evaluate these decisions is by having a long-term plan in place. In organics, you should have at least three years planned out. Ideally, this is more like five to ten years so that you understand where you’re headed and why you’re going that direction. If you don’t know what you’re going to do the next two years, your profitability is at risk.

5. Cut expenses without losing profit

Organic growers must always be looking for opportunities to save on expenses without reducing their revenue. For example, a good rotation plan should reduce disease and limit the need for organic fungicide. Planning ahead also allows you to source inputs for less money. We save up to 30% on chicken manure for B&B Irlbeck Farms by having a plan in place well in advance. We buy it in July.

However, it’s important to understand that you can’t cut your costs to organic profitability. We don’t use a lot of high-dollar inputs in organic farming, but that doesn’t mean we there isn’t times when we need to use different inputs based on the situations. The goal is to ensure we’re always giving our plants the best opportunity for success.

It’s a best practice to continually rely on your data when making decisions about cost savings. Use your historical data to figure out if an extra pass with the weed burner will pay off in the long run. Fortunately, some of the investments we make in organics have short payback periods because the value of the crop is so much higher.

6. Stay the course

While these are challenging times for everyone, there’s no reason to get discouraged or give up. Organic premiums are still substantial. And that means organic profits are well within reach. If you stay laser-focused on execution and reach your full yield potential, your organic acres can be very profitable.

We strongly encourage organic farmers to spend time working on their plan. You should also have your banker on board. AgriSecure customers can utilize the MyFarm platform to gather detailed information on their financial outcomes to help ease any concerns lenders may have.

AgriSecure can help

If you need help getting through challenging circumstances and want to better understand how you can maximize your operations, we’re here to help. Reach out for a free consultation today.

By Bryce Irlbeck, AgriSecure Founder and Owner of B&B Irlbeck Farms and J. P. Rhea, AgriSecure Founder and General Partner of Rhea Brothers

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