NDSU Extension - Mercer County


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Positive Returns Projected in 2014 for Most Crops

projected crop budgets

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

Positive Returns Projected in 2014 for Most Crops

Projected crop budgets generally show some return to labor and management for 2014, although the price of most crops declined significantly in 2013 and are not expected to improve, according to Andy Swenson, North Dakota State University Extension Service farm management specialist.

A reduction in total costs per acre provides a slight cushion to the impact of lower crop prices.

"The overall decline in costs was accomplished because of a 20 to 25 percent decrease in nitrogen and phosphorus fertilizer prices and lower fuel prices," Swenson says. "Crop insurance premiums should be lower because of a drop in the crop prices used to determine revenue guarantees. Also, seed prices are generally flat.

Projected per-acre returns to labor and management for producing spring wheat and corn are generally positive but paltry. The range is from minus $13 to a positive $18 for corn and minus $8 to a positive $37 for spring wheat across nine regions of the state.

"Surprisingly, corn looks more profitable at $18 in the northwestern region than spring wheat at minus $8, while in the southeastern region, spring wheat at $37 projects better than corn at $14," Swenson says. "It is important to note that the projections do not account for variability in yields and prices.

Canola returns to labor and management range from $45 per acre in the northeastern region, which contains the largest canola-producing counties of the state, to minus $25 in the southeastern region.

Flax acreage should increase because per acre returns to labor and management are $71 in the northeastern region, $56 in the north-central region and nearly$50 in the southwestern and northwestern regions. The lowest return for flax is $19 in the southeastern and south-central regions.

Malting barley has the highest returns of the small-grain crops. Malting barley per-acre returns to labor and management are around $50 to $60 in the northeastern, north-central, northwestern and south-central regions. However, if barley does not make malting quality and is sold for feed, the returns quickly turn negative at around minus $40 per acre.

Green peas have returns ranging from $52 per acre in the northern valley and southeastern regions to $99 per acre in the north-central region.

Oil sunflowers show moderate returns to labor and management by ranging from $30 to $45 per acre in the western and central regions, but near the break-even point in other regions.

Based on budgets prepared for lentils in the western and north-central regions, projected lentil returns to labor and management should be about $30 per acre. Oats and millet are the only two crops that show very negative returns in all regions.

Because of the volatility and downward trend in prices, Swenson believes that producers should be more aggressive than normal in forward-pricing crops that provide acceptable profit.

"The budget estimates for returns to labor and management do not take into consideration price and yield variability or risk," Swenson says. "A perfect apple-to-apples comparison of crops is not achieved in the report because different levels of labor, management and risk exist among crops.

The budgets are available on the Web at http://tinyurl.com/NDCropbudgets

Source: Any Swenson NDSU Farm Management Specialist


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