Agriculture and Natural Resources, Institute of (IANR)


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IANR News Service: News and Publishing, Institute of Agriculture and Natural Resources, University of Nebraska-Lincoln, P.O. Box 830918, Lincoln, NE 68583-0918.


Good planning is always key to success for agricultural producers -- but perhaps never more so than in today's economy, said a University of Nebraska-Lincoln agricultural economist.

"Planning what to grow in 2009 has many complications this year," said Doug Jose, UNL farm management specialist. "Among the possible unknowns at the farm level are market prices for commodities, the cost and availability of inputs and the cost and availability of operating credit.

"I say 'possible' because through contractual arrangements and forward pricing decisions, farmers already may have locked in many of these prices for the next production cycle," he added.

Like everyone, farmers are keeping an eye on the overall economy, Jose said.

"Agriculture needs improvement in our general economy and improved consumer confidence to prosper," Jose wrote in the Dec. 17 issue of Cornhusker Economics. "Yes, people will buy food, but they will spend more on food through buying more expensive items, more protein and more prepared meals, if they have more money in their pockets."

Jose offers these planning tips for 2009:

Establish your business model. Despite the unknowns, producers need to "start with describing the operating environment you think is going to exist for the next year," Jose said. "This gives you a base to respond to if the situation does change as opposed to reacting on a daily basis without any structure in your decision making process." Farmers should figure out what they plan to produce, the inputs they'll need, the forces that will impact production and major risks to their operations.

Define a marketing plan. Price patterns and relationships have changed, but it is still important to establish a marketing plan. Despite market volatility, seasonal price patterns are still relevant. Make farm program decisions. Details of the new farm program and specifically the Average Crop Revenue Election program are expected early in 2009.

Coordinate decisions. Once producers decide what they plan to grow, the next set of decisions will be the inputs needed seed, fertilizer, fuel, chemicals, Jose said. "But this should be coordinated with two other sets of decisions, namely the crop insurance decision and a marketing plan. All three groups of decisions should be tied together," he said. Evaluate the costs and benefits of seed alternatives. An increasing number of seed alternatives are available. Traits incorporated into these varieties have increased yields and reduced chemical use.