The Producer and the Contractor

Harvest season has started for this area of Argentina. I was able to see how one contractor and producer interact with each other, and it was very interesting. It was also a lot fun to see a good crop of corn harvested. Santiago Nobile farms near Canals, Cordoba and he had corn that was at 22% grain moisture. Normally, Santiago and most producers wait until the corn is 16% or less before they harvest for grain. They have warmer, drier winters and usually are not concerned with rain.

Likewise, contractors are familiar harvesting dry corn. This day, Santiago visited the fields to see how harvest was getting started. Santiago and the contractor tossed a metal circle that was 0.25 m² and collected all of the seed on the ground. They did this a total of four times and then weighed the grain to determine how much was coming out of the back end of the combine. Too much was coming out, so the contractor made some adjustments and go the grain loss down to acceptable levels.

Stalk strength was weak in the field, due to the excessive rains, and the ears were barely hanging on to the plants. I told Santiago that I thought the earlier harvest was a very good decision, especially since more rains are forecast over the next couple weeks.

The contractor owns a combine, tractor, grain cart and a camper. The contractor moves a long way from home and he wants to harvest as much as possible as long as possible. Having a camper to stay on site allows the contractor be more efficient during harvest. Having equipment in good working condition is important as well. In this case, the contractor owns a New Holland CR9060 that was in excellent condition. The tractor and grain cart were also in good condition.

Contracting is a good business decision for the grain farmer in Argentina where there are no subsidies. In addition, credit is expensive with interest rates above 15 or 20%. With high costs for credit and no safety net in a bad year, investing directly in machinery is a dangerous business. Renting equipment and labor is a much safer decision. Santiago hires contractors for planting, fertilizing, spraying and harvesting his crops.

Because they are not running machinery in the field, farmers like Santiago are able to devote more time to their economics, marketing and business plans. Many farmers double-check the contract work by taking stand counts after planting, walking fields after spraying and counting grains that come out the back end of the combine.

The negative of contracting is that a contractor makes more money by working more land. That system encourages the contractor to hurry, which can lead to poorer planter performance and more harvest losses. Santiago's contractor was driving no more than 5 km/hr (3 mph) and his combine could clearly handle a faster speed. Again, harvesting this corn early reduces the pressure of having to get to the next field. That allows the contractor to drive slowly and get as much corn as possible.