how do you win in tough times purdue center for commercial … · 2015-05-12 ·...

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


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!


The Fundamental Premise

Be Best In Class!

•  Well beyond being a low cost producer

•  What is your class/your strategy


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


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


$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


-$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


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


$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


$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


$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


Elements of Best in Class 3. Execu:on

- Use SOP’s (standard operaEng procedures)

-‐ Timely operaEons

-‐ Details, details, details


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


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


Op:mize Your Fer:lizer Rates


Take Advantage of Decision Tools


Siteofac:onweeds.com


6. Do Fewer Things Beaer

-‐What do you do beder than anyone else?

-‐ Focus and intensify

-‐ Consider outsourcing

Elements of Best in Class


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


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?

how do you win in tough times purdue center for commercial … · 2015-05-12 ·...

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