Acres & Assets | Now Is Decision Time For The 2024 Cropping Year

With the ultimate outcome of the 2023 crop season unknown and the bulk of harvest activity still to come, it might seem a stretch to think about the 2024 cropping season.  However, now is the time farmers and landowners are making key management decisions about the 2024 crop that will greatly impact profitability and agronomic practices.

I always enjoyed the period in late summer and early fall when the crops were starting to mature and the culmination of a year’s efforts would soon come with harvest.  It was a time to not only get the combine and equipment ready for the six weeks of full throttle activity that would soon start, but it was also the time to plan for the next season.  I would make out our cropping plan for the next year and review recent soil tests in order to calculate the fall applied fertilizer and lime we would need so that we could book it and prepay if financially advantageous.  With cropping plans in place and fertilizer needs booked, early seed purchases for new and limited availability varieties could also be contemplated.

In regions around the country where there are more cropping options than the typical corn and soybeans grown in the Cornbelt, crop planning and harvest of the various crops happens over multiple months as compared to the main fall harvest period in the Midwest.  No matter the timing, important and impactful decisions are being made prior to and during harvest.

One of the most important strategies of farmers is controlling acres whether by owning or leasing.  Leading into, during, and after harvest, farmers are wanting to maintain their current leases and try to add additional acres to farm if they want to grow their operations.  Today’s typical farming operation will control acres through a mix of means including owning some land, possibly crop sharing some, and cash renting other farms.  The cash rent leases will probably include a portion of land rented from relatives, some from close neighbors or retired farmers, and some rented at market rates wherever it makes sense for the operator.  

A good share of the rental transitions involving landowner and tenant take place during the coming months as the aging of landowners creates a succession of ownership and new decision-making about leasing.  Also, farmers who are retiring start making arrangements to lease out their land if there are no farming heirs and they may also assist their landowners in securing new tenants.  

Land sales activity picks up prior to and after harvest.  A farmer can add to their acres for the next season by purchasing farms that come up for sale or by renting a farm purchased by an investor who needs a new tenant.  Competition for good cropland to own or rent is stiff and either way, farmers will need to be at market prices in order to add the acres to their operation.

In addition to the strategic decisions about adding acres to a farming operation being made over the coming months, there are several key management decisions that are often made during this time of year that will greatly impact farm profitability in 2024.

Input pricing, more specifically for fertilizer needed for the 2024 crop, is one of the most important decisions facing farmers as we enter harvest of the 2023 crop.  At times, the best pricing for nitrogen, phosphorus, and potassium fertilizers happens before harvest when operators can prepay for much of their expected fertility needs for the next season.  In areas where conservation practices allow fall fertilizer applications, buying now makes the most sense.  Even for those areas where application should be done during and after spring planting, the time value of money and the expectation of price fluctuations will come into play when deciding when to pay for fertilizers.

Important agronomic decisions are being made leading into and during harvest.  Crop rotations for each field are being set in order to facilitate fall tillage and fertilizer applications if appropriate. Soil testing needs are being booked for sampling after the crop is harvested so that actual amounts of fertilizer, lime, and micro-nutrients can be more precisely determined.  

Farmers are also starting to think about any major equipment upgrades or purchases they might want to make before harvest or after harvest and before the end of the year.  Financial ability and tax planning will go into any investment decision.  

Although it might look like a more quiet time on the farm right now, it actually is a period that can be critical to the success of the operation for the next season.  Plans are being laid and decisions are being made that will affect how a farmers farms and if they can be profitable next season.  The 2023 harvest is upon us, but the 2024 season is just around the corner.