00:00 Can wheat make more dollars per acre than soybeans? You're saying? Absolutely not. That's why they grow wheat in places you can't grow 00:06 soybeans, but let alone in Iowa, this guy says, get your pencil out. David Mason come at you 00:11 with Kelly Garrett from Garrett Land and Cattle. A neat experiment going on. We're standing in a wheat field, just 00:15 got harvested here in July. Behind US acres and acres and acres of soybeans as we know, you grow corn and you grow soybeans in Iowa. 00:22 Corn's number one, beans. Number two, wheat. You're not supposed to be doing that out here. This is both in the Palouse. 00:26 This is supposed to be in the prairie provinces. And you said Damian, I just ran the numbers. Soybeans are kind of a loser this year. Talk to 00:32 Me. I keep diving in my financials harder and harder using Jared Creed, using Jeff Janssen, my marketing consultants, financial consultants. 00:39 I gotta tell you, wheat is a more profitable than soybeans. Corn is the best. Mm-Hmm. 00:43 Corn is the best with the marketing program. Hedging program, insurance program after that is cattle. But then wheat. Wheat is far superior to soybeans for us. 00:50 And I think most people, okay, If we're losing, I wanna make sure we set this up for the viewer. 00:54 We're talking about 20, 24 numbers. You know what? Every year, I mean David Cole, the Kevin Matthews preaches David Cole's learnings so much. 01:02 The Virginia Tech financial guy, he's like, you know what? Know your numbers. We're talking about 20, 24 numbers. 01:07 This was probably a completely different set of circumstances one, two years ago, two years from now. But the main thing that I got from our discussion, 01:13 you got out your pencil or your marker on the whiteboard and you said, alright, let's run the numbers first thing 01:18 before we actually put those numbers there. Most people don't calculate their numbers correctly. You said that, not 01:24 Me. That's right. You know, when I started with Jared and Jeff, I told 'em that I was getting ready to go back towards a 50 50 corn soybean rotation. 01:31 I had been heavy corn. Jared said, well that might be the best thing for you, agronomically in a way, 01:37 it's not the best thing for you financially. Right. And then when we looked at the numbers, he, he showed that to me and it was very clear. 01:43 He even told me, most growers are two to $300 light on what their soybeans cost. And I said, well, I'm not that guy. I was 01:49 that guy. I was off. And, and the thing is, it's not that you didn't run the, what the cost of the seed cost of input costs her, you know, 01:55 herbicide, fertile side, you know, fun, fungicide, fertility, et cetera. Where were you off? I'm guessing it was return to land, 02:02 return to time, return to equipment. 'cause we've already done the other one. It was a combination of all three. Right. 02:06 You know, it was, I was trying to use some custom rate type of cost for the machinery. 02:10 I didn't have the interest in there correctly. Things like that. I was pretty close on my corn, you know, I, I was off on my beans. 02:15 For us to grow beans in 2024 is $917 an acre. And You thought it was gonna be like 700 Bucks. I thought 600. 02:22 Six 50. Okay. So you were definitely off on the soybean cost to grow. All right. Now are you thinking 02:28 that maybe you're overestimating or underestimating the, the wheat because a person watching this might be like, yeah, 02:34 well wheat costs less to put in but also don't make nothing. Well, what Jared and Jeff wanna do is say, 02:38 this is the acre of ground you have. How are you gonna allocate it? So it's the same land cost, it's the same machinery cost. 02:44 You know what I mean? Because of how we're dividing out our machinery cost, our repairs per acre, things like that. 02:48 Jared's point on wheat is don't ever figure more than $560 an acre outta your wheat. 02:53 Now this year is gonna be a couple hundred dollars more than that. The yields are tremendous and the price was tremendous. You 02:58 Mean for Rev? We could, could use $6 as a number, but you actually did sell it. You pre-sold a bunch of it for, 03:02 We pre sold a bunch of, we pre-sold about three fourths of it at $7. Okay. The person that's watching this that says, 03:06 okay, fine, I get it. Maybe I've underestimated my cost on my soybeans, but I still don't see it on the wheat. 03:11 You're trying to put it on the straw. Kelly, you know what? Every pound of straw that I removed from my acre, 03:17 I've removed pounds of fertility. It's a wash the left toes to the right. I don't believe that I actually can count the sale 03:24 of the straw as, as part of my net because it has to come back as fertility. We're removing $200 an acre worth 03:31 of straw. Yep. Okay. That Mean meaning you sell the sell the Sell selling. Either 03:35 you utilize or sold. If you sold it, it's whether you sold it or utilize it, it's $200 worth 03:39 of straw per acre. And then Yes, the Value of the straw is 80 bucks a ton. There's two and a half tons. Yep. $200 03:43 and you're removing about 30 pounds of K. Okay. Now the pound of K isn't a dollar a point. Okay. You know, it's more 60, 70 cents a point. Yeah. 03:51 You know, things like that. It's Not just potassium. Isn't there other stuff in that Straw? There is, but that's 03:54 the biggest cost of the Straw. Alright, so there is for 200 bucks you've gotta put back in 50 60. 03:59 Yeah. Yeah, exactly. So it's still $150 net. And then I will tell you what we do with our straw. We're gonna bring the manure back. 04:05 So I am removing the straw. Yeah. But I'm gonna bring the manure back. What About the, the allocation of time? 04:11 Some farms, I mean, you've got employees, some farms are a little more skinny. It's, you know, a guy and his daughter or whatever. 04:17 I think they can make the case that utilizing some of your time during July, June, you can justify that. Is that, did they even factor in? It 04:26 Does. You know, at one point when I started with wheat and things like that, I'm like, I could find our farm 9,000 acres 04:32 with 6,000 acres worth of equipment. Yeah. 3000 acres of corn, 3000 acres of beans, and 3000 acres of straw because it's in July. 04:38 Absolutely. That's a huge thing. Have I quantified that? No, but it is a big deal. 04:42 Okay. There's plenty, plenty of years when it didn't make sense. This is one of the years that it did. 04:45 What's your advice to the person watching this? I I I want to disagree a little bit. It makes sense. Every year relative to beans, 04:51 beans are gonna lose a couple hundred dollars. An acre wheat's gonna break even or make 40 or 50. And that's without me putting my cattle out here, 04:58 which I understand everybody can't do. So it isn't about breaking even. It's about what is it relative to soybeans. 05:03 And I'm telling you it's better than soybean To, to the skeptic that is somewhere that says we just don't grow soybeans. 05:07 Here we are. We don't grow wheat here we are in, I don't know, name a place where they don't grow wheat. Yeah. 05:12 Why, why can't you grow wheat? Okay. You know, I, I would say why, why haven't you tried? Why does it always have to be the way 05:17 that we did it? Let's try to get better. All right. And then the other one is your advice to people about finding their numbers 05:22 because they're, there's somebody right now listening saying, I don't know man, I think my numbers are solid. You thought they were too, but 05:28 I thought my numbers were sold and they weren't. I would sit down with a professional and I would go through some strict, strict 05:33 detailed financial analysis. Right. To make sure, you know, and I, this is one of the things 05:38 that is frustrating with me for ag. I was that guy five years ago, 10 years ago I was ball parking. 05:42 It. The margins are getting thinner, the dollars are getting bigger. How can we afford, how can you afford to not know? Right. 05:50 So any, any last thoughts on this? We make some more than soybeans in Iowa. Hell no. But we've proven that it has. Yeah. 05:55 So help somebody get over the hump here. Last thought. Well my, my thought would be is that when I tell you it costs me nine $17 06:01 to put my beans in, I'll tell you what my dad said. How in the heck did you get that much money in a bean crop? And I said, well dad, it's always been there. 06:06 We've just been wrong. So the viewers are probably thinking, how did he get that much money into a bean crop? 06:11 I'm telling you also have that there Isn't, isn't one of the common mistakes, Kelly, that people will pretend 06:17 that they didn't spend any money on the fertility for soybeans. 'cause they spent it the prayer year on corn 06:21 and, and had it in the field. I've heard that before. Yep. Well, that doesn't mean that you didn't spend the soybeans, 06:26 it just meant you spent it a year ahead. Right. So that's a probably where I'm thinking there's a calculation. 06:31 It could be, you know, there's several areas. I mean, there's so many different entries on that spreadsheet. 06:35 I'll tell you, you think I got $917 in there and I'm too high. Jeff says, every farmer that is of my size, I'm 06:41 below average on my cost relative to other farmers of my size. So any other thoughts then on, on running your numbers? 06:46 Because I think a lot of people are, this is gonna be kind of, I agree with that. Some people are gonna stick with what they've always done. 06:51 Your point is, what if next year it was different? What if it was different than you? That you're not married, you're not in love 06:56 with soybeans. Love making money. I'm, I'm in love with making money. Yeah. I'm gonna tell you next year it is gonna be different. 07:00 It's gonna look at the commodity price. You're right, right now. And November beans are 10 44 on the board. 07:05 December corn is what? Four? It's just about got a three in front of it. Yeah. As we're recording this, 07:09 Well, at the ethanol plant, Dennison, Iowa, October delivered corn is 3 84 right now. Yeah. All right. So is this gonna be a thing 07:15 where next year there's a different crop out here? You've already talked about cover crops and going to and going to cattle 07:21 Next year. The crop out here will be a rye Tri Kali mix. In the spring we'll chop it in may, I hope. Yeah. 07:26 And then we're gonna put out here forage sorghum, and we're going to chop that because we want to enlarge the cow herd. 07:31 We wanna raise more of our feed instead of buy it. And I'm gonna tell you then I think that that crop, I think that that double crop system on this land we're standing on 07:39 will be worth $1,400 an acre. Gross. Does Wheat make more than soybeans? Of course you said no. And we just told you. 07:43 No, actually it did. It did This year. Every year has is a little different. We understand that. But you know what, you gotta run your numbers. 07:49 If you want more economic information. We have recorded a number of videos about this with some really good guests. 07:54 So go check out the library. At Extreme Ag Farm, we cover agronomics economics, farm management practices, equipment. 08:00 You know what, it's all there. It's all free for you Extreme Ag Do Farm. Until next time, thanks for being here.