Diversification, though no silver bullet, offers farmers a weapon to fight an economic battle that's been virtually unwinnable for the past few years. Multiple crop options help spread risks and increase efficiency for labor, equipment and water, according to a panel of farmers and an agricultural economist.
“Farmers can find good reasons to diversify,” said Fred Schmedt, agricultural economist with the Noble Foundation in Ardmore, Okla.
Schmedt, who moderated a farm diversity panel recently at the Southwest Crops Production Conference, co-sponsored by Southwest Farm Press, said adding crops to an enterprise mix could improve the aggregate cash flow for a farm. “Or it may just spread the cash flow out over the entire year.”
He said planting crops with varying maturity dates — cotton and wheat, for instance — allows farmers with limited irrigation to divide acreage into two cropping systems. Farmers plant half in winter wheat and irrigate that crop during the winter, when moisture demand usually is lower. Then they plant cotton on fewer acres and have more water available to make the crop during the dryer summer months.
Year-round cropping systems also provide year-round employment for labor. “And diversification adds rotation to the mix and that is extremely important to keep yields up,” Schmedt said.
Depending on the enterprise mix, Schmedt cautioned growers that diversification might not always reduce risk factors. “Farmers must know the crop demands and market opportunities.”
Ronnie Hopper, a Petersburg, Texas, cotton farmer and current president of Plains Cotton Growers, Inc., said a hailed-out crop several years ago left him with three options:
“We could have planted maize with limited water and made 4,000 to 5,000 pounds per acre.
“We could have planted dryland sorghum with a yield potential of 1,500 to 2,000 pounds per acre. The difference in production would be the water cost, so we really had nothing to gain by irrigation. The rotation would benefit the next year's cotton crop, however.
“Our third option was to let the land lay fallow during the summer, get a head start on a fall wheat crop and graze cattle over the winter.”
He chose cattle and wheat, even though he “had no real experience with cattle. We went into partnership with a friend. We put nitrogen on the acreage under the circle in August and planted the wheat. We invested about $50 per acre on seed, fertilizer and water costs.”
The partner bought and sold the cattle. “He had the expertise,” Hopper said. “We provided the pasture and upkeep.
“We made money on the cattle and that was a big part of our profit for the year.”
Hopper said farmers have to be willing to change and try new things. “If a man says he'll never have a hoof of livestock on his farm, he's not thinking about opportunity. It's our responsibility as farmers and businessmen to listen to what we're told and weigh the potential for opportunity.”
The scheme makes sense, Schmedt said. “The supply and demand picture for beef is much more positive than for cotton and the demand relies primarily on domestic consumption, which follows the economy.”
He said, in spite of the recent economic downturn, the “beef sector still looks better than most crops. It's a good option for an enterprise mix.
“It also makes sense as a way to conserve resources. Cool-season crops use water in the off-season for row crops.”
Neil Reimer, a Seminole, Texas, cotton, peanut and wheat farmer and the 2001 Southwest Farm Press Peanut Profitability Award winner, says his triple option rotation plan helps maintain yields, especially on cotton and peanuts.
“We have to do everything we can to make high yields, especially when cotton prices are lower than the cost of a postage stamp.”
His rotation follows a four-year cycle: two years of cotton, wheat, and then peanuts. “Peanut yields average close to 6,000 pounds per acre and cotton following peanuts can make more than three bales per acre.”
Reimer said the wheat crop, which follows cotton, “allows the land to rest almost a year. We harvest in June and then take care of the weeds until we're ready to plant peanuts the following spring. During that fallow time, we can use irrigation water elsewhere.”
He said he needs labor all year. “We spend the winter maintaining equipment, and by spring we're getting ready to plant. We farm 3,000 acres with three full-time hands.”
Yield is the key. “Never hesitate to plan on making the yield,” Reimer said. “I haven't conceded high yields on either cotton or peanuts to lower production costs. And rotation is essential.”
He plants 360 acres of peanuts, and, despite the profit opportunity and the temptation to plant more acreage in a high-value crop, he said he has to “discipline myself not to plant too many and ruin the rotation pattern.”
Schmedt said it's easy for farmers to “take in new ideas. It's much harder to get rid of the old ones, but they have to look at new things.”
Implementation comes with some hand wringing, Hopper said.
“We pulled the cattle off in April to get land prepared for cotton. We either had to pulverize the field with conventional tillage or plant in the stubble and cow tracks and see if we could get the cotton up and then use Roundup to control weeds. That's hard for a traditional farmer to do, but after we get the cotton up, the stubble protects it from wind damage.
“It's essential that we get good penetration for planting with a double-disk opener. Good equipment is available to make the system work.”
He said planting cotton in wheat stubble provides farmers with an option that may decrease production costs and protect the crop from damage.
Reimer plants cotton and peanuts into wheat stubble and says stand and weed control offer no real problems.
“I've been farming for 10 years,” he said. “And I'm still learning. I do some custom combining and I try to learn from the farmers I harvest for. Also, timing is extremely important. Planting early gives us a better grade with cotton and promotes timely harvest, before weather hits cotton or peanuts and damages yield and quality.”
Reimer said farmers should be confident in their production systems and be “aggressive with your bankers. Assure them that you know what you're doing.”
Hopper said farmers must be willing to alter cropping strategies to contend with variable economic and erratic weather conditions but said the change must be “productive change.
“Some farmers look back and wish things were like they used to be. Well, they never will. We used to have more water, higher native fertility and better rotation options.
“Now the water table has gone down and we plant less grain. We may have to consider new systems where we plant half as much cotton, if available irrigation water is only half enough to make a crop. If we plant half the acres, we double our water supply.
“In some cases, landlords will require full planting, and intermediate and long-term debt may influence planting options.”