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Implications of cutting inputs may be high

Tight margins and economic constraints can make it tempting to cut inputs, but is that really the best strategy?


November 19, 2007
By Donna Fleury

Topics

52aChallenging weather conditions, fluctuating markets and economic constraints
have researchers and farmers taking another look at cropping systems and management.
When facing economic constraints, there can be the temptation to consider cutting
cropping inputs. However, without a really good understanding of the long-term
implications of making such decisions, it might not be the best strategy.

Researchers at Agriculture and Agri-Food Canada in Saskatchewan have initiated
a project to address this issue. "The question we are asking is if you
remove or make cuts to one input, does that have an impact on some of the other
inputs that you use?" asks Stu Brandt, crop management agronomist at the
Scott research station. "We are trying to get some insight as to whether
or not there are interactions between inputs."

The possible combination of inputs that growers use for any one crop is very
complex. "It makes it impossible for us to look at all of the combinations,
so we developed another strategy," says Brandt. The research compared two
packages, a canola crop with a 'full' input package, and a canola crop with
an 'empty' input or very low input package. "We decided to remove selected
inputs from the full input package one at a time. With the empty input package,
we added those inputs back at the same level. We were trying to determine whether
the impact is the same when we remove inputs from a full package of inputs as
compared to adding inputs back into the empty package."

The research project was launched in 2004 at the Scott research station comparing
canola varieties with both high and low yield potential, a Liberty Link hybrid
with a Liberty Link open pollinated canola variety. In 2005, the project was
expanded to include three locations in Alberta and two in Saskatchewan. The
researchers also made some modifications to the trial.

"In the first year, we either used herbicides and fertilizers at the full
recommended rate or we took them out completely," explains Brandt. "In
2005, we established three levels of herbicide and fertilizer use: the full
recommended rate, a reduced rate or none." The project was also expanded
to include barley. The project will continue for four years to follow through
with a four year canola-barley-canola-barley rotation. "This four year
rotation will help us better understand whether cutting inputs in one year has
any long-term impacts, particularly with weed control or fertility." The
question remains, will you have to pay down the road for that one year of reduced
inputs?

Researchers have some preliminary observations from 2004, but the 2005 data
will not be analyzed until spring 2006. "We do know from the preliminary
results that there are some interactions between inputs," explains Brandt.
"We are seeing that the impact is different when you remove an input from
a full input package as compared to adding an input back in to an empty package."

In 2004, removing nitrogen fertilizer from the full input package had a much
bigger negative impact than the positive impact of adding the same amount of
nitrogen back into the empty package. "When you're growing a crop with
a high yield potential, you need the nutrients there to realize that high potential,"
says Brandt. "Therefore, removing fertilizer from the full input package
had a big negative impact." On the other hand, with the empty package,
there are probably limits as to how far the yield potential can be pushed with
just one input.

"Our expectation is that those impacts are going to vary considerably
from one location year to the next." For example, with weed control, if
there is not a lot of weed pressure, then making cuts to herbicides may have
a minimal impact in that year. In some situations, there may be the potential
for hybrid vigour to compensate for reduced herbicides. "It's important
to remember that there are limits as to how far you can go with cutting inputs
without running into a disaster."

Brandt plans to conduct an economic analysis comparing a number of input costs
and canola price scenarios once the 2005 site data is analyzed. And over the
remaining three years of the project, the analysis and results will be fine-tuned.
"We want to develop a good understanding of the impacts of cutting inputs,"
says Brandt. "We want to be able to provide growers with the tools that
will allow them to do a good job of managing risk in those situations where
they feel compelled to cut inputs." Once the general principles are understood,
they will likely be applicable to most of the crops grown in western Canada.

For now, growers should be very cautious about cutting inputs where they know
a crop requires those inputs. "If we can develop some good tools that would
allow you to make that decision as to whether or not the crop really requires
that level of input, then I think there may be some potential to make some cuts."
However, Brandt points out that they do not have enough information yet to help
growers fine-tune their management decisions today. Watch for more information
in 2006 as more research results are captured and analyzed. -30-