Diversity in your operation is something to consider in your efforts to reduce risks. One way to diversify is integrating a new type of crop into your rotation. This may seem like an easy decision to make; however, there are various points to consider before adding new crops in your rotation.
Market Opportunities and Distance to Market
This may not be an issue if you are considering long-term crops that have been typically grown in your area, such as wheat, and delivering to a local elevator. However, what about a specialty crop such as pumpkins or a new and emerging crop such as hemp? Do you have to take on the entire gamut of marketing functions yourself and find the end buyer? Do you have attainable goals for your new crops? If you can, how far would you have to transport the product? Are you capable of the logistics required for shipping? Delivery could be just a few miles or across state lines or even to overseas markets.
This could be easy, as you may already have all the needed equipment on your farm. However, what about time restraints on the equipment? Will there be a conflict in timing when the equipment is needed for your current crops at the same time it’s needed for the new crop that you are bringing into the mix? You may have to consider leasing or renting another tractor to accomplish everything in a timely manner. The crop may require acquisition of additional pieces of equipment at considerable cost. For instance, a row crop cultivator may be necessary to help with weed control in a crop like hemp.
Just like equipment, you may feel sure you have sufficient labor. However, could labor restraints interfere with the new crop versus your current crops? You may need to be planting the new crop while you should be doing post-spraying applications with your current crops. If you hire more labor, do have the time to properly train them? Does the new crop require a lot more hands-on labor - such as pumpkins? How accessible is seasonal help during these critical times and who in the operation would manage additional people?
Again, there could be little to consider agronomically on the new crop versus what you are currently growing. Although well planned crop-rotations can significantly improve soil health, there are some basic points to consider when deciding if you are ready for a new crop. First, look at soil test levels and requirements of the new crop. Do the pH levels need some adjustment and are the levels of macro and micronutrients at the optimum range? If not, you will need to have a game plan to supply these nutrients to the crop prior to planting or throughout the growing season. What about disease pressures you will have to manage? The location you have chosen for growing the new crop could harbor disease that the crop is not tolerant to.
Sourcing/Availability of Inputs
It may be an easy task to find the inputs you need such as seed and chemicals for crop protection from weeds, insects, and diseases. However, there could be limitations imposed by the new crop. Seed sourcing may require working with new companies that you don’t know much about. The crop may be new enough that there are not many chemicals that can legally be applied according to the labels (a good example here would be hemp). Therefore, you may have to consider different equipment or additional labor, as discussed previously, to control weeds, manage pests, and other potential dangers to the crop.
This may be a greater deterrent than first realized, especially if you need additional equipment, labor, transport to available markets and even specialized inputs. Inputs could cost quite a bit more with limited available sources and not much competition to help bring prices down. Creation of an accurate budget will help you see how much money will be required and timing of those funds. Be sure to also incorporate this budget into your overall operational budget to make sure there are no surprises; don’t be caught short on operating funds at critical times.
Making a decision to grow a different crop for diversity to reduce risk may seem like a no-brainer. However, as discussed, there is a lot to consider and this article only provides a sampling of potential issues as you work on a plan for your operation. Your ability and willingness to handle risk may be the deciding factor in moving forward with the addition of newer crops. Find out if crop insurance is available to help reduce the risks involved in expanding your crop mix. Spending time for research and talking with peers can help you be aware of and reduce the number of potential obstacles and create a positive outcome for your operation.
FamilyFarms Group has experts in accounting, human recourses, markets, operations, and other sectors that can help. Find out how we can be a resource for your operation.