Sunday, July 22, 2012

When at odds with Mother Nature, bet your chips on a sure thing


This is not the growing year any of us wanted to see. Fields are dry, brown and some growers are already considering insurance relief and calling it a year. This is not a time to panic, but rather a time to focus cashing in on the facts.

If you look at precipitation totals for the year, they are below average. The Corn Belt saw stretches of over 100 degree temperatures with barely 0.10” of rain. But as you can see in the map below, you can’t say it isn’t raining. It’s just not raining where many need it most.

Courtesy: NOAA

This map provided by the National Oceanic and Atmospheric Administration shows the amount of precipitation 14 days prior to July 18. Much of the Upper Midwest saw at least 1.5” and the South experienced as much as 6” in some places.

A lot can happen in a few weeks’ span. It was at the end of May when Illinois farmers were reporting “80% of their corn was in good to excellent condition,” in a Peoria Journal Star article [link]. There is still plenty of time for rain to make a difference. In the hardest hit areas, this is especially true for the soybean crop. When that time comes, growers will then have to turn their attention and watch for three perils before harvest: fungus, bugs and weeds. Perils all too familiar to applicators.

The combination of extreme heat and minimal rain has increased certain insect populations, making conditions ideal for eggs to hatch. Spider mites, podworms and others are out in droves during this unusual season. Then when a little rain does come, fungus begins to develop. Finally, weeds in the field absorb any moisture that falls away from the stressed crop. The best line of defense in saving yields and protecting your investment from the terrible trifecta of fungus, insects and weeds is a self-propelled sprayer.

Looking at the NOAA map above, a typical Corn Belt farmer, for example, would be relying on corn and/or soybean harvests along with crop insurance as generated income this year. Projected corn yields in June dropped 12% from May, which seems like a significant downturn. In general, a 12% drop is pretty common as seen in the chart below. This yield decline is packing a larger than usual punch to growers because we haven’t experienced a significant drop in yield in more than 10 years. The positive side to this story is that the past years have put the grower in a favorable financial position.

Courtesy: USDA

Soybean prices through the middle part of July, however, are dancing around $16.00/bushel with experts predicting the price to hold until after harvest. That is if any rain falls. One soybean agronomist was recently quoted as saying that from water deficit stress during the reproductive growth stage, the soybean plant is vulnerable to “reduced pod numbers, reduced seed per pod and small seed." [link]

Adding crop insurance into the mix, it’s clear a farmer’s net income this year will have to be spent wisely. Risks exist every year. When playing the odds with Mother Nature accompanied with declining income, it’s assuring to not only have a low risk financial investment sitting on the farm, but also a machine that increases yield potential for seasons to come.

Already identifying the importance of owning a self-propelled sprayer, the clear choice among all competitors is the Apache sprayer. Whether it’s an off year or not, cost of ownership and return on investment are two critical points of concern when purchasing any farm equipment. The Apache leads the way on both fronts.

When you compare the Apache to competitors, there are numerous factors giving the Apache the lowest cost of ownership in the industry:

     - Service costs are lower
     - Replacement parts cost thousands of dollars less
     - More efficient fuel economy
     - Factory-installed state of the art precision options
     - An industry best 5-year warranty saves money on parts and labor
     - Purchase price is $25,000 to $75,000 less than comparable hydrostat sprayers

In addition, the Apache offers the highest resale value in the industry. Based on a statistical analysis by a Indiana University school of business professor, a five year old Apache has an average resale value of 72% of its original purchase price.

That’s making a sound financial decision based on consistency in an inconsistent world. 



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