Benedict T. Palen, Jr. | The Home Garden—What Is The Return On Investment?

With the cost of food being a large part of the budget for many families these days, it makes sense to think about ways to lower that cost.   The home gardening can be a good way to do so.

With a space of, say, 15 by 20 feet, one can grow the following crops—as an example:

• ·         100 onions—roughly 30-40 pounds; value $30-40; can plant early and late season crops
• ·         10-12 green bean plants—25-30 pounds; value $45
• ·         Two rows of lettuce—value $20
• ·         Three rows of sweet corn---value $15-20
• ·         Four tomato plants—value $30-40
• ·         Two rows spinach—two plantings—early and late season—value $15-20 each time

The cost of the seed for these items should be about $25.   Water costs will depend on the part of the country where you live, but it should be around $20-30 for the season.    Total costs for seed, water, and a little fertilizer, should not be over $55-60. 

So, based on two crops of onions and spinach, and the other listed crops, a gardener can raise about $200 worth of food for a very modest cost.  Some of the produce, such as the green beans, sweet corn, tomatoes, and spinach, can be frozen easily for eating during the winter, when the costs of these items fresh in the grocery store are typically higher than during the US growing season.   Onions can be stored for 90 or more days in a cool location so that they can be used during the late fall and winter.

Without question, gardening will save money for more folks who can devote a little space, and a small amount of time, to the preparation, planting, and watering, of the crops.   But gardening also serves larger purposes—it is good for the soul.  It keeps us connected to the earth, and is a relaxation from the every day stresses that many of us have to deal with.  

Second, it gives the satisfaction of growing one’s own food, and the possibility of sharing that food with friends and neighbors. This is something that I have done for years, and the giving to others is the best part.

For a beginning gardener, there is plenty of free advice from local county gardening “extension agents,” who are usually part of the particular area’s agricultural university, along with talking to fellow gardeners and garden center personnel. 

Give it a try; ultimately, the rewards are priceless.

Crop Forecasts And Their Reliability As A Planning Tool For Agricultural Investors

There is always much anticipation when the USDA issues long term forecasts for grain supply, demand, and prices.    Some market participants seize on trends that they believe they detect when, say, acreage of a certain crop declines over a couple of year period, or when there is an apparent large amount of over supply of one grain or the other.

From the perspective of a farmer, and market participant for 40 years, all of these forecasts need to be taken with a grain of salt.    One need only look at, say, the USDA price forecasts for a 10 year period for a commodity, and then look back to compare the actual prices during that period, to see, that these long term forecasts are inherently flawed.   

As another example, there were articles in some publications within the last year predicting the demise of wheat production in Kansas (which has long been a leading wheat producer in the USA), all because of low prices for wheat, and shifts to other crops.  Ah, some writers have not been around long enough to know how quickly things can change in agriculture! This year, the crop in Kansas was large, and wheat prices have rebounded to profitable levels for growers.

How then does one considering an agricultural investment, make sense of all of these forecasts when building a financial model?   The answer has several parts. First, and perhaps foremost, one must understand the long view of ag markets; there are almost always unexpected events in some area of the world that impact production, and prices.  

History teaches us to expect the unexpected.  Second, to get a grasp of the “big numbers” that are often thrown around when talking about usage, it is helpful to break down the numbers into the number of days of consumption that that usage, or supply, really means.   And then taking that number and figuring out the per capital availability around the world of a certain commodity really brings things down to an understandable level.  

When one realizes, for instance, that there is a 60 day supply of soybeans at a given time, and that the market price is X, it is a bit easier to see a scenario where the supply drops to, say, 45 days, and what the impact on price is at that point.   Those hundreds of millions of bushels of supply mentioned in the headlines of some article become easier to get one’s arms around when it is viewed in days of supply.  To use a pun, that is when the numbers come down to earth. 

Third, one must keep in mind the big picture, and that is the world’s ability to feed itself is precariously balanced.   There are real world limitations on land use, water availability, and infrastructure, that are often overlooked when some writers suggest that there is great potential in some developing nations for food production.    

Some of this makes for great headlines, such as when Asian investors announced plans to develop enormous acreages for farms in remote parts of the world, with the suggestion that that would somehow adversely impact grain prices in established areas.  But, unless one digs into the details, it would not be known to most that those plans were not much more than pipe dreams.

Agriculture is, and always will be, a long term asset.  Investors should not be swayed by short term trends, or by the efforts of some to predict prices over a long term horizon.   My advice is to look back over, say, the last five years, and understand supply, demand, and their relation to pricing—that is the most sensible predictor, in my view, because over that time period there will have been any number of events in some parts of the world that have impacted prices in a good or negative way.  It is not the perfect approach, but at least it offers a sound rationale for making investment decisions.

How Accurate Is Your Center Pivot Irrigation System? | Benedict T. Palen, Jr

Many farmers probably take for granted that their center pivot system is applying water evenly across the spans of the system.  Unless there is something glaring, such as a broken hose, or leak in a pipe, what looks good to the eye may seem good enough. 

 

A client of mine was certain that he was getting even water application across the spans of his several dozen center pivots.   I began to question that assumption while scouting some of the corn fields, and doing soil moisture tests, which suggested more water was being applied on some spans than on others.

For a cost of about $20 each, I purchased several measuring pitchers, placed one under each of the seven spans of the center pivot system, and the results were a shock to the farmer.  From a cross section of the pivots on this large farm, and with different crops and varying water application rates based on how he was operating the pivots, we found a range from high to low of over 20% on average!  

In other words, where a particular span on a pivot might be delivering .50 of an inch of water, a nearby span was putting out .40 of an inch.  Similarly, because this farmer was applying liquid fertilizers through the pivots, some parts of the field were getting too much fertilizer, and others not enough. 

In this particular case, the farmer was preparing to spend thousands of dollars to set up variable rate irrigation on many of his center pivots. But he changed his mind based on the results of this extremely low cost, and low tech, evaluation, of his water application patterns. He realized that, before spending thousands of dollars per pivot to go with variable rate irrigation, he had to address the basic issues of re calibrating each pivot so that the nozzles were set to deliver water at an even rate.

  

Benedict T. Palen, Jr., is a fifth generation farmer who provides consulting services to farms in the US and overseas.

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Benedict T. Palen, Jr. | Simple And Low Cost Ways For Environmentally Friendly Gardening

Gardens of whatever size always deal with the issues of water and weeds.  It can be expensive to water the garden, and for those busy gardeners who do not have the time to water on a regular basis, the crops can suffer.   And, of course, weeds are never the gardener’s friend, but they always seem to find their way into the best laid garden plans.

There is a technique that I have used for years to deal with water and weed issues. It has the added benefit of building up the soil over time.  I use small bales of wheat or barley straw to mulch around the plants once they get 3-4 inches tall.   The bales typically cost less than $10, and one of them will usually cover at least 400 square feet. 

What I do is add a loose layer of straw around the plants, and between the rows, about 4 inches in depth.   This has let me reduce my watering cost, and time for watering, by about one third, each week.  The straw shades the ground, and it reduces evaporative loss from bare soil.

To check soil moisture so that I do not over or under water my plants, I use a screw driver, and if it can be pushed into the ground easily to about 6 inches, then the soil is in good shape for moisture; if not, give the plants a good soak.

The straw also helps to suppress weed growth. Weeds, just like desirable plants, need sunlight for the seed to germinate, and for the plants to grow.  The straw shades the ground, and I have found that it will reduce weed growth by at least one half. The key is to put the straw out early before weeds get started.

The added benefit of the straw is that, unlike wood mulch chips, it degrades easily, and can be plowed into the garden in the fall to add organic matter for the following crops. 

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