The cost of seed has been on the rise for years, causing many U.S. farmers to spend more and more money just to get their crop in the ground. In fact, according to the USDA, the amount farmers spend on seed has more than tripled over the past two decades.
One of the main factors behind this rise in costs are trait packages designed to help you reach your seeds’ yield potential. But are these traits always worth the added cost at the end of the season?
Learn how you can focus on your seed ROI.
The problem is, the net revenue for your seed isn’t determined by yield and commodity price alone—the equation takes your seed cost into account as well:
Yield * Commodity Price - Seed Cost = Net Revenue
Because high-yielding trait packages are often more expensive, they may not be more profitable than seeds that would produce a slightly lower yield but are available at more competitive prices.
Here’s an example of what this looks like:
Seed A Net Revenue 200 bu/A * $3.50/bu - $100/A = $600/A
Seed B Net Revenue 190 bu/A * $3.50/bu - $40/A = $625/A
As you can see, Seed A out-yielded Seed B by 10 bushels per acre, but it still didn’t fare as well in terms of net revenue because its cost was significantly higher.
John Heitkamp planted conventional corn hybrids from F2F Genetics Network™ last year for a variety of reasons, but one stands out above the rest—return on investment.
“Everything in farming is numbers,” says Heitkamp, whose operation covers more than 3,000 acres in Western Ohio.
When he realized he could purchase a bag of F2F Genetics conventional corn seed for $100 when he was looking at prices nearly double that or more for genetics with comparable yield potential, the decision was simple.
“I’ve got to look out for myself, my operation,” he explains in a matter of fact way. “It’s all return on investment now.”
Access to quality hybrids and varieties at competitive prices is one of many data-driven solutions we’re delivering to farmers to help them reduce the cost of production, maximize the value of their crop and make confident decisions.
Download our free report, The Future of the Family Farm, to learn more about ways we’re responding to challenges in today’s ag economy to put Farmers First®.
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