00:00 Right now is when the combines were done rolling. We're heading into frozen ground. It's the end of the year. You got a little bit of slow down 00:09 and then your mind is still going and this is the time when you should be thinking about everything that just happened this year and take down 00:15 your notes. Think about next year and start strategorizing. That's a George W bush word start strategizing and so 00:22 welcome to extreme mags cutting the curve more than just a podcast. It's the place for insights. You can apply immediately to your 00:31 farm operation for increased success this episode of cutting the curve is brought to you by AG Explorer. With Innovative products that improve fertilizer efficiency 00:40 protect yield and reduce stress. AG explore helps maximize field potential find out how AG Explorer can help you get more out of 00:49 your crop at Ag explore.com. And now here's your host Damien Mason. Sitting down here Kelly Garrett, one of the founders of extreme AG talking 00:58 about adjustments and changes. You're gonna make in 2023. This is the contemplation season, right? He's strategizing. What 01:04 adjustments what changes what things did you see this fall that are giving you pause that make you say, oh boy that really worked. Aha 01:10 moments. What are you gonna do next year and why based on what happened this year Kelly here? We're gonna be reducing our soybean acres and 01:19 we'll be putting in even more corn on corn than we have in the past. Okay, so I was at your farm and the summertime and we talked about how you were going to do beans on beans 01:28 because it required less inputs. We thought there's gonna be maybe some problems getting fertilizer. We still might have that issue and then you didn't do 01:37 a bunch of beans on beans. We you nice change. I still believe that that's coming the demand for the soybeans and we very much 01:45 need to know how to handle that situation. But right now the Chicago Board of Trade and the basis levels are 01:51 saying you better plant some more corn. Yeah, so it all comes down to the money and you know continuous corn is something or corn on corn we've seen 02:00 we never used to see beans on beans, right? That's just something that in our lifetime you didn't do you didn't see it at least know where that I'm familiar with. It was always corn than 02:09 beans or corn on corn. And you said we're gonna do soybeans on soybeans. The reason you said that in going into 2022 was about all the things. We just 02:18 said little cheaper to put out the margins. We're looking skinny. Anyhow, maybe inputs were less available you change your mind because the numbers that 02:27 economics changed heading into spring like in April absolutely they did. You are now making a decision in its November 02:35 that we're recording this about what's going to happen come April May. 02:39 The Economist might change in the next six months again They could but I don't think that the ratio between corn and beans will change 02:49 that much and you know, we are we have the fertility. We're putting it on, you know, also you have to to take into account the federal crop insurance program. Yeah, 02:58 you know, I don't ever want anyone to think that I'm Farming Farming for an insurance check but to security it provides 03:04 on a corn crop and it just doesn't it doesn't come out work the same way for us on a soybean crop the security it provides is let you sleep pretty 03:13 easy. Well, that's the thing is you know, you always hear the coffee shop talk about these, you know far we're just forward for the 03:19 insurance. Well, not really but let's also, you know, let's be proud and let's be you know, we're not being crooked but there's also let's not be stupid. It's right. 03:28 So when you're talking about the dollars of input costs to not give yourself some backup is foolish. Absolutely. You 03:37 know, when you tie, you know, Jared Creed my marketing consultant he ties that insurance program into marketing program and it gives him great leverage. It 03:46 gives him a lot more Independence in the marketing decisions that just don't exist with the soybean when you look at the adjustments 03:52 you're making about the soybeans to Corn it's not because soybeans were unprofitable. It's not because you can't grow good soybeans and it's not even just because the insurance you're 04:01 just saying that in Crawford County Iowa the US Department of Agriculture and the crop insurance made available to you. 04:09 It works a little better on corn the profit is better on corn and it's more secure because of the insurance program. Yeah so good for 04:18 you, but that doesn't mean you're going to go all you know, 7200 acres of corn. You're going to still do mix it, etc, etc. 04:27 What would have to change between now and April to make you reverse this thinking it happened last year you reverse your 04:33 thinking like at the last minute? I I just don't see it happening. But the bean price going up much more relative to the 04:42 corn price changing that ratio between the two and bringing more profitability into the soybeans, but it 04:48 would have to go up a lot because it's still that security of the insurance program. Is that there? You got to weigh that in on your decision as well as a 04:54 historically these spread been like 2.2 to 2.4 times soybeans are 2.2 to 2.4 times almost without 05:03 any exception ever. It's just that way isn't that the way it's generally always been 2.2 is about where they are 2.2 times. Yes, but it has been 05:12 less than that. It's been more down towards just too and it seems like it's right now a little is almost sub to right. So 05:18 that's why we are making the decisions we are okay, but then the question of course comes about that the company that needs soy to stay in 05:27 business. We'll start building up the price. So don't these things fix themselves, doesn't it? Go back to two point two because there's not enough 05:33 soybeans getting planted it could and it probably Will at some point but right now when we're needing to make these decisions, this is what it's Point. Yeah, and so 05:42 you're gonna sell when you make this decision. What are you going to sell? You gonna sell half of expected are you gonna sell half expected corn 05:48 crop like right now before Christmas? I believe that by probably not before Christmas, but I believe by February Jared will have a fair amount of it priced. 05:57 Okay, what do you look at and say I'm concerned about this new decision. So you're thinking what 60% you'll be 640. 06:06 Oh probably closer to 65-35 even maybe a little bit of course a little bit of wheat. So I guess it's more like 65 30 one and 06:15 three or something. Yes. I mean, you got a few Acres of wheat that you're still gonna do right? We will still have 200 Acres 06:21 a week and then the old double crop that yes. All right, that's something else. We're gonna talk about adjustment. But you wanna go there now, you will finish out on corn. 06:27 Let's finish out. All right finish out on corn. What would be the decision other than the price thing? What about inputs does it would input 06:33 scarcity or input price climes force your hand of going back to a more balanced approach. No, you know, we're very fortunate 06:42 with our plant food product that the scarcity of the fertility that that fear doesn't exist for us part of the decision is what maturity 06:51 of corn to put in and we believe that the basis opportunity the basis in September this year. That was we hold a lot of corn at 95 over which is 07:00 a very very strong basis very strong basis. I mean, you're talking about almost a buck more than what you know, Forward to saying and you're talking about that could be that's pure profit. Exactly 07:09 and we believe that that opportunity will exist again because of the short crop that is, you know, the perceived shortcrop that we have this year. The demand 07:18 for corn is very strong. Okay, you're a larger scale operation, but you still have some of the same whether if I'm a guy listening to this and I farm 1200 Acres half and half. 07:28 I've still got the reality of equipment time and Manpower you're hauling three to four times as much stuff with corn in 07:37 terms of product right output. Right right bushels. That's that's three to four times has made trucks three to four times. I mean truck driver 07:46 hours three to four times as much combine not really much time hours, but you don't get as much done. I mean, you're just you're just handling a lot more stuff you are 07:56 that's that's more diesel. That's more people which is the big thing and more hours. You're gonna have it. Yes. 08:04 Over when you have to you have to manage that, you know, they're just talked about going up up. More than 1,000 Acres of added corn this 08:13 year. That's versus last year. Yeah. Well, that's 200,000 more bushels of corn right or maybe 250,000 more bushels of corn. So, you know, 08:23 we'll make the decision we'll have probably 1200 acres of corn that is a hundred and one to 108 day 08:29 corn which would we would be I would consider during this to spread out your you're doing this to first off trying to 08:35 capture some September you might get up a touch of yield but you grabs September basis. Yes, and you're also gonna it's kind 08:41 of like when Farmers plant wheat, it spreads out your workload. Yes, you're spreading at your workload trying to start like Labor 08:47 Day. Absolutely. the basis opportunity on that early corn Versus the yield opportunity on the later corn the 08:55 is more than a wash. It's still it's still favors early corn it. Probably it depends on the Year this year at favor the early corn next year if we 09:04 get some rain, I believe that it will the the later corn will could yield enough more the rotate by 95 cents 09:10 difference it it justifies that you're you're happy with both. How's that? Okay. Yeah, that makes sense. All right, so an adjustment you're making you're going to up The Corn Acres, you're gonna reduce 09:19 the soybean Acres. What's this do on the soybean front well means they're gonna be less soybeans. If a bunch of people make your same decision, although many do 09:25 not Chad Henderson doesn't vary his acreage and a portioning his Acres. He told me this because he's got the issue of machines and time. Yes, 09:35 absolutely. So do you think that more people gone makes this decision like you to change the mix really more people gonna be like Chad and stay the way they always do. 09:45 I think more people stay the way that they always do is it because of is it because of a good reason or because they just don't like 09:51 change. I I think that you know, the long-term plan that's just the steady flow of things, you know, some people don't like change but by 09:58 and large, you know like Chad he he's managing his Logistics and his workflow and things like that. What about the change in the crop inputs when I 10:08 said, you know, you don't think you got to worry about it, but you still need you plant food doesn't do at all. You still need you still 10:14 need Nitric copious about some nitrogen. Yeah, and you still have a lot of things to bring in and the seeds more expensive. The seed 10:20 is more expensive so is a cash flow issue that some people might experience you say as long as you can get 10:26 the money operating alone, whatever it probably makes sense still because at the end the net the net so if 10:32 you have to carry, but you know now we're talking the cost of money eight percent. So if I gotta borrow 8% money 10:38 to buy it, I see you say still do it. Yes, you know, we're I'm looking at Double. If not triple the profitability 10:44 on corn versus soybeans can't you also and since we're recording this in the end of the year, there are programs. I don't buy seed you. 10:52 You quite a bit. If you made the decision, you don't do this can't you go ahead and commit and buy the Seed and get like a pretty hefty discount if it's done before like Christmas time. 11:01 Yeah, there's there's discounts when you're for the early order. And so you think that's it that alone then if you're 11:07 making the decision do you buy it now? Yeah, we are we're making those decisions that we this week actually. Oh fantastic locking all 11:13 that in. Okay, what else then has to change this adjustment is because of money what else has to change I talked about Manpower. I talked about more diesel more trucks more 11:22 guys to drive trucks or gals more nitrogen a bigger feed. I'm sorry a bigger spend on seed there is what else you know, there's a more intensive management 11:34 to corn on corn, you know, the the plant Health becomes an issue or it can become an issue. So we're gonna make talk about things like all the different rootworms all the stuff that we had 11:43 in the old days and that's why you absolutely thought you should rotate is that still an issue 11:49 or do we have better products now or is it worse because we have to Um, we have better products now, I believe if you 11:55 don't deal with the problem it's worse than it used to be but you know, we we use an insecticide from FMC that 12:01 we have had great results as I way ziway is the fungicide. Yeah. Yes ethos the name escaped me for yeah there ethos from 12:10 FMC. We actually put on every acre B at rotated or nothing corn. That's just highways of fungicide. Yes confusing my product and you 12:19 know maroon bio like we talked about has morphed into ProForm or become part of that. They have a new insecticide coming out that I'm excited to try. Okay. And so you think 12:28 you think once once you get dialed in on the right insecticides corn on corn is not as big of a challenge as it once was no 12:37 it's not good. The ethos has really eliminated that problem when you look at the decision to do this and 12:46 you've already decided it's gonna take a hell of a big move on soybean prices to change this. So it looks like there's nothing to change it. Is there 12:52 anything that like you would have been surprised by the 25 year old farmer version that now the 12:58 47 year old farmer version is like one thing I know because I tried this 20 years ago. I'm not gonna get that problem this time. Is there any like historic knowledge? 13:08 Yes, it is thinking about things financially rather than agronomically. I wanted to a year ago. I wanted to go back to more of a 13:18 50/50 rotation because of the the corn yield that was because of that and Jared told me that we needed to look more closely at the numbers that I was wrong. Mmm. And he said 13:27 he said it agronomically for your corn yield. It might be the best decision but financially for your farm it is not and when we set down I really look 13:36 at it as three crops now. I look at my Acres going into soybeans. I look at my rotated corn and I look at my corn on corn and I'm going to make the decision 13:45 based on the total the total revenue that we're gonna forecast the farm to make and Jared is Right financially. This is the best 13:54 decision agronomically though with my yields. Yeah. They're they're gonna come there the earlier corn and then the corn 14:00 on corn. It's a little tougher scenario to yields might not be quite as good. There's a few other things that we talk about and I never thought about until I join extreme egg. We got 14:09 much more residue to manage we do and with with corn on corn the residue stays, so we needed we need to use some of the products that 14:17 Measures like what? Is it Titan? I think it is or eat it or something like, you know, extract and from agerson. We need it. There's 14:26 a probably a bigger call for these things to make sure that we're making the getting the residue broken down. And yes, so extract from Titan res cycle from 14:35 integrated egg dcom from hefties residue RX from concept agrotech. All of these products are things that we have used 14:44 to to try to break down the greatest degree the residue and that's that's more important on a corn on corn year. I'm just thinking through some of 14:53 the stuff that you got to be. Cognizant of on a more corn year residue would be one of them anything. I'm forgetting. 15:02 The plant Health, you know, we'll like a product like Cube from spraytech will be something that we'll use more K fuel from Nature's liberate 15:11 CA from agril liquid. I can name any products that we pay we pay attention. Anyway. Yeah, but we pay more attention and we 15:20 try we will probably apply more of these products in a corn on corn setting to try to help the plant Health. You're a you're a reduced till to no till person. That's why you got 15:29 your carbon deal. No-till corn planting into soybean stubble is easy. No till corn 15:36 planting into corn stalks and the fodder was big because you had a huge yield last year is more problematic. What does The 15:45 Listener need to know about that? Because it seems to me that's where you'd have a hard time getting good seed to soil contact and you got 15:51 a lot of that to do your planter needs to be perfect or as close to perfect as you can have it perfect means what I know 15:57 you've talked about those little things in the front that separate the crap better way your row cleaners, you're real cleaners need 16:03 to be calibrated. See now you call a real clear and I call those little things that blood Trails I call them the 16:09 stuff the little things up front that blow the crap out of the way and you call the Rope clean a real clear things more descriptive. Yes, you 16:15 need the row cleaner. You did a better job than I did of that. The row cleaner needs to be in the planner needs to be level, you know, Kevin and Chad will talk about 16:24 that and that's very important that we need to level the Planner. Yeah you to make it everything's going in. 16:30 The same inch and a half inch and three quarters, whatever Although our friend Matt who Farms a lot and is good at it. He 16:39 says about a thumb. I mean, he doesn't even talk about inch and a half inches three quarter. He just always talking about thumbs and 16:45 Knuckles and things like that. We we actually will plant our corn about three inches deep which is about my index finger. Yeah. That's a 16:51 ways. Yep. That's not we don't agree. We want to get it down there deeper because of the root system. Yeah, so you think that you get down there and you're always guaranteed moisture 17:00 but really In May is moisture much of a problem. No it we have always, you know, my dad. We've always planted our corn like that. 17:10 It's on the deeper side next to talking to other people, but for what they plant but we've had success with it and we we 17:16 very much believe in that. Big adjustment you're gonna make more corn might be 65% of your acres in corn next year over 60% That's 17:25 big. You're definitely changing your thing. You're going to have more corn on corn obviously to to achieve that talked about 17:31 all the things you ground at the manage around more cost of seed because it's more expensive you're going to work maybe getting 17:37 the stuff early and and taking pre discounts. You will maybe have to use some operating money because you're gonna have the cost of inputs for corn is greater than for soybeans. 17:46 But you say even if you're obligating eight percent operating alone the margin justifies it absolutely it does and then you talk about the product you're 17:55 going to use to make this all work insect decide is probably the biggest one to pay like you 18:01 said, it's important to pay attention to everything but insecticide because your issue on those Acres that are repeat going absolutely 18:07 must And then we didn't cover we got it all big adjustment. He's gonna make Kelly gear is gonna make the big adjustment and next year. 18:15 He's going to do a lot more corn in 2023 stay tuned. We'll tell you how that all works out. And if for some reason he makes any Amendment or changes to that plan because he did 18:24 last year. He's gonna go way big on soybeans. You know what the boys person varies from their plan because it makes 18:32 sense. So we might vary but right now it doesn't let any reason to and part of that is line up the money and also line up the sales exactly, you 18:38 know a year ago. We talked about being on being research now we're talking about doing more corn on corn. 18:44 The market made a switch Yeah, well the market and the person that looks for an opportunity here to make a change also maximizes some 18:51 some opportunities on money. Absolutely. His name is Kelly Gary is one of the founders of extreme Ag and we got lots of this kind of stuff out there. If you're not watching all 19:00 these great videos and listening to these cool podcasts, please do so, we've recorded hundreds of videos and then these podcasts cutting 19:06 the curve man. It's just really cool stuff share with somebody you think that can benefit from it because that is our entire objective here extreme AG 19:12 dot Farm as we find it and we call this kind of the curve because it is our objective to shorten your learning curve. So next time, he's Kelly I'm Damian Mason. Thanks for being here. 19:21 Thanks for listening to another edition of cutting the curve for more information that you can apply to your farm operation. 19:27 Visit extreme mag dot Farm are your crop stressed out AG Explorer has you covered with a full line of products to help protect your crop from 19:36 environmental stressors such as cold and wet or heat and drought check out AC explorer.com and start protecting your yields and profits.