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Soybeans and Spring Wheat Project Profit in 2018

The most favorable crop budgets were in the southwestern region, where 12 crops projected a positive return.

More acres have been planted to soybeans than any other crop in North Dakota the past two years, says Andy Swenson, North Dakota State University Extension Service farm management specialist.

Soybean acreage should increase further in 2018 because it projects a positive return to labor and management in all nine crop budget regions of North Dakota, averaging $26 per acre.

Hard red spring wheat, which is the second most popular crop in the state, also should see an increase in acreage. Spring wheat projects a return of $14 to $20 per acre in most regions, is breakeven in the northwest and north Red River Valley regions, and shows a slight loss in the south Red River Valley region.

This is a notable improvement from last year’s projected budget for spring wheat, Swenson says. Drought concerns elevated spring wheat prices.

Acreage of corn, the third largest crop in the state, may decline because all major corn growing regions of the state project negative returns to labor and management, ranging from minus $21 to minus $47 per acre. Only the northwest and southwest regions, which have lower costs but higher production risk, show returns approaching breakeven.

Durum wheat projects a positive return in five regions, led by the southwest at $30 per acre and the south-central region at $25 per acre.

Malting barley typically projects a profit but is subject to substantial price risk if the crop only makes feed quality. This year looks much more pessimistic because of lower malt barley prices, Swenson says.

The northwest and southwest regions project a modest $3 per acre return to labor and management. All other regions project losses ranging from $16 per acre in the north-central and south-central regions to about $65 per acre in the Red River Valley regions.

Dry beans, like malting barley, typically show a profit, but projected prices for 2018 make the outlook more challenging. The strongest return to labor and management is projected for the north-central region at $43 per acre, followed by about $20 per acre in the south-central and southeast regions. The east-central and northeast regions show returns of $9 and $2 per acre, respectively, and Red River Valley regions project losses of around $5 to $10 per acre.

Canola and flax project positive returns from about $10 to $30 per acre in the northwestern, southwestern and north-central regions, and about $5 per acre in the northeastern region.

Oil sunflowers only show a positive return to labor and management in the southwestern region at $12 per acre. Highest projected returns for confection sunflowers are $35 to $40 per acre in the southwestern and south-central regions, $6 per acre in the southeastern region, and about a breakeven return in the north-central and south Red River Valley regions.

Lentils and small chickpeas project positive returns to labor and management, averaging about $45 per acre in the regions for which they are budgeted.

Projected total costs per acre, on average, were about 2 to 5 percent higher than last year’s projections. Interest expense and fuel, fertilizer and some seed prices, such as for spring wheat, flax, durum and canola, were higher. Most seed and chemical prices were relatively flat.

The situation on the revenue side was mixed. Yields have increased noticeably in many instances but prices for several crops are lower.

The most favorable crop budgets were in the southwestern region, where 12 crops projected a positive return. One reason was lower projected fertilizer use after last year’s drought, Swenson says. The north-central region had nine crops that projected a positive return. The Red River Valley regions had the fewest crop options projected to generate positive returns.

Swenson cautions that the budgets estimate returns to labor and management with no consideration of price and yield variability, or risk. A perfect “apple-to-apples” comparison of crops is not achieved because different levels of labor and management, and risk, exist.

The budgets are available at http://bit.ly/NDCropBudgets.


NDSU Agriculture Communication – Jan. 4, 2018

Source:Andrew Swenson, 701-231-7379, andrew.swenson@ndsu.edu
Editor:Kelli Anderson, 701-231-6136, kelli.c.anderson@ndsu.edu
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