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How Do You Win In Tough Times Webinar, January 23, 2015
How Do You Win In Tough Times?
Michael Boehlje, Dis:nguished Professor & Extension Economist
Michael Langemeier, Professor & Associate Center Director
Bruce Erickson, Agronomy Educa:on Distance & Outreach Director
James Mintert, Professor & Center Director
How Do You Win In Tough Times Webinar, January 23, 2015
Improving Your Farm’s Management 5 Management Strategy Categories to Consider
ü Financial
ü Input Purchasing
ü ExecuEon
ü MarkeEng Strategies
ü Government Programs & Crop Insurance
Becoming Best in Class!
How Do You Win In Tough Times Webinar, January 23, 2015
The Fundamental Premise
Be Best In Class!
• Well beyond being a low cost producer
• What is your class/your strategy
How Do You Win In Tough Times Webinar, January 23, 2015
What is Your Strategy? • Low cost
• your job every day in a commodity industry
• Customer centric • ask what your buyer wants… Services?
• Innovator/first mover • new products/markets/services/business models
How Do You Win In Tough Times Webinar, January 23, 2015
Elements of Best in Class 1. Intense Cost Control -‐ efficiency/producEvity is criEcal -‐ know your cost components per bushel 2. Margin Management -‐ know your producEon costs -‐ know your margins
-‐ contribuEon margin – revenue above operaEng costs -‐ profit margin -‐ revenue above all costs
-‐ protect posiEve margins
How Do You Win In Tough Times Webinar, January 23, 2015
$1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 $5.50 $6.00 $6.50 $7.00
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Year
Breakeven Prices for Corn West Central Indiana
Cover Variable Costs
Cover Total Costs
How Do You Win In Tough Times Webinar, January 23, 2015
-$200
-$100
$0
$100
$200
$300
$400
$500
$600
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Historical Net Returns West Central Indiana
Contribution Margin
Net Return to Land
Earnings
Per Acre
How Do You Win In Tough Times Webinar, January 23, 2015
Land 35%
Fer:lizer 20%
Seed 14%
Machinery 8%
Labor 5%
Other 18%
Share of Corn Produc:on Costs, By Category West Central Indiana, 2014
How Do You Win In Tough Times Webinar, January 23, 2015
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Year
Land Cost per Bushel of Output West Central Indiana
How Do You Win In Tough Times Webinar, January 23, 2015
$0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Year
Corn Fer:lizer Cost per Bushel of Output West Central Indiana
How Do You Win In Tough Times Webinar, January 23, 2015
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Year
Corn Seed Cost per Bushel of Output West Central Indiana
How Do You Win In Tough Times Webinar, January 23, 2015
Elements of Best in Class 3. Execu:on
- Use SOP’s (standard operaEng procedures)
-‐ Timely operaEons
-‐ Details, details, details
How Do You Win In Tough Times Webinar, January 23, 2015
Elements of Best in Class 4. Buying Right - Procurement mentality
- Compare supplier offers - Use a bid sheet
- Sets your cost structure
- Don’t pay premiums for control
- Consider repairing rather than replacing
How Do You Win In Tough Times Webinar, January 23, 2015
Elements of Best in Class 5. Use The Best Science - Research based decision making
- FerElity…soil tesEng strategy
- Weed control
- Seed technology & seeding rate(s)
- Fungicides
- Aggressive crop scouEng
How Do You Win In Tough Times Webinar, January 23, 2015
How Do You Win In Tough Times Webinar, January 23, 2015
Op:mize Your Fer:lizer Rates
How Do You Win In Tough Times Webinar, January 23, 2015
Take Advantage of Decision Tools
How Do You Win In Tough Times Webinar, January 23, 2015
Siteofac:onweeds.com
How Do You Win In Tough Times Webinar, January 23, 2015
6. Do Fewer Things Beaer
-‐What do you do beder than anyone else?
-‐ Focus and intensify
-‐ Consider outsourcing
Elements of Best in Class
How Do You Win In Tough Times Webinar, January 23, 2015
7. Data Management
-‐ Collect efficiently
-‐ Aggregate, but share carefully
-‐ Capture the insights
-‐ Think carefully – be wary of false signals, confirmaEon bias
Elements of Best in Class
How Do You Win In Tough Times Webinar, January 23, 2015
Be Best In Class… It’s Not New ü Return to the basics
ü Dust off the old playbook
How Do We Win in Tough Times?