After I made the call to change chemical suppliers, I spent the better part of a weekend feeling guilty. While I should have been happy about saving $15,000, I was feeling bad about telling our faithful supplier that we bought chemical elsewhere.
Whenever we say “no” to a current supplier, my dad has me make the dreaded call. It’s partly because he doesn’t want to turn people down, but mostly because he wants me to make the tough business decisions.
Good, bad, or indifferent, we book chemical in early spring. For the past seven years, we have bought chemical locally and hired our neighbors to custom spray. I’m a big proponent of custom spraying; it’s cost effective and allows us to focus our time and resources on our hay and cattle operations.
Over these seven years, we became lazy and didn’t quote other chemical dealers. We blindly bought from a loyal retailer because it was easy and the service was good.
This year, I called the wholesaler where we used to do business 10 years ago for some quotes. Some chemical prices were the same, but a few of the quotes were much lower than the retailer. We decided to split our business between the local retailer and wholesaler. This switch saves us $15/acre on corn post-emergence and $5/acre on soybean pre-emergence passes.
Costly status quo
When it comes to input suppliers, we found that the status quo cost about as much as a new John Deere gator.
This isn’t a post about how wholesale is better than retail. Local retailers provide good service, information, rebates, and financing. The wholesaler provides less service and wants payment upfront. Every farmer’s situation is different, but what worked for us this year was splitting our chemical business.
This is, however, a post about becoming complacent. We can’t assume that what worked last year will work this year.
It’s part of our quest to question every decision we make on the farm. We’ve changed suppliers in the past, whether it be in finance, accounting, or seed. It wakes people up, and can make them work harder for our business in the future. We know what our expected crop is worth, and we need to manage expenses so that crop is profitable at harvest.
In retrospect, we should look at every cost in detail every year, not just in the years where we are on the cusp of break-even profitability.
The opinions of the author are not necessarily those of Farm Futures or Penton Agriculture.