Editor
Planning for the 2025 season didn’t just begin on Jan. 1. As the 2024 season progressed and rolled into harvest and ginning, cotton producers were already making mental “to-do list” notes in their quest for success in 2025’s arduous farming environment.
Aaron Smith, Extension crop marketing specialist at the University of Tennessee, said, “Farming in 2025 will be challenging for many row crop producers. Low commodity prices, disappointing 2024 yields, high input costs and policy uncertainty will require crop farmers to make important agronomic, financial and risk management decisions.”
He put together a to-do list for farmers to consider during their planning process. To see Smith’s remarks in their entirety, check out the Web Exclusive article located on the home page of Cotton Farming’s website — cottonfarming.com. To whet your appetite, here is a sneak peek at some of his suggestions.
■ Producers need to distinguish between cash versus non-cash costs (capital recovery) in the short term. We can farm in the short-term covering cash costs, but in the long term we need to cover total economic costs. (Depreciation is an example of a non-cash cost).
■ Input costs and profit margins need to be managed effectively. Do not cut costs at the expense of yield but do not pursue the highest yield possible. Approximately 90% of cash costs are in five categories: land, seed, chemical, fertilizer and operating expenses for equipment (fuel, labor, repairs and maintenance). Farmers should evaluate the efficiency of these five costs to assist in managing profit margins.
■ Develop a marketing and risk management plan that includes crop insurance, storage analysis, contracts, futures and options. Do not use the same marketing and risk management strategy in the current market environment as when we had higher prices and higher volatility two years ago.
Smith also recommends that farmers surround themselves with a strong support network. Some of the important roles he discusses include an accountant, crop consultant, Extension agent/specialist and lawyer. To see the complete list, refer to the Web Exclusive article at cottonfarming.com.
As go-time quickly approaches on the farming front, remember the words of one of history’s great minds — Albert Einstein. “Learn from yesterday, live for today, hope for tomorrow.”
Here’s wishing all of you a happy and prosperous new year!