NDSU Extension - Mercer County

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2019 Wheat Crop Outlook

wheat crop outlook, projected budget

Submitted by Craig Askim, Extension Agent/Agriculture and Natural Resources

The weather is starting to feel a little more like spring may finally be here, which means planting will begin in the near future. This year producers had to take time and plan what types of crops they are going to plant because of the low market prices, tariffs, and the increased costs for fertilizer, chemical and seed. Therefore, I prepared an example of a general projected budget for wheat. I used county averages based on figures received from Mercer County yield reports and crop budget reports by United States Department of Agriculture. Remember, this is only an example. To get a true projected budget you need to replace the dollar amounts with your own. The projected budget will be based on a per acre basis.

The average wheat yield for Mercer County is 41 bushels, with a price of $5.30 per bushel based on the Minneapolis Grain Exchange posted price for September, and factoring in the basis costs at the time of this writing. Therefore, the projected income would be $217.30 per acre.

Expenses: Seed $12, Chemical $30 (no insecticide/fungicide), Fertilizer $45, Insurance $10, Fuel/Oil $15, Repairs $10, Rent $41, Miscellaneous $12 (Interest on equipment, Land etc.). Total Expenses = $175 per acre.

Indirect costs are more difficult to estimate. This would include things like depreciation, machinery investment, land charge, labor and overhead (building insurance, equipment insurance, taxes, licenses etc.) A rough estimate would be about $30 per acre.

Income is equal to $217.30 per acre, expenses are equal to $175 to $205 per acre, so the net would be $12.30 to $42.30 per acre.

There is nothing budgeted for quality, protein discounts, storage or drying expenses. This is based on county averages for rent and bushels, which can change greatly from operation to operation.

As you can see, the margins can be very small so doing your homework ahead of time, looking at contract options and shopping for the best volume or prepaying discounts can greatly affect your net profits. Good luck! If you have any questions please give me a call at the Extension office at 873.5195.

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