A new book, so scary it makes the latest Stephen King novel look like Anne of Green Gables, has hit the shelves.
It’s the 2006 crop planning guide, published by Saskatchewan Agriculture.
Farmers who read it will probably suffer nightmares as they consider the economics of seeding a crop this spring.
“I’ve never seen numbers this bad in 19 years of doing this,” said Joe Novak, a crop economist with the department. “This really drives home how tough it is out there.”
According to the guide, the only crops likely to produce a net return over total variable and fixed expenses in 2006 are kabuli chickpeas, sunflowers, caraway, fenugreek and borage: an interesting array of crops, but not likely to usher in a new era of prosperity.
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While it’s not news to farmers that there is little money to be made growing grain these days, some of the numbers in the planning guide, such as wheat, barley, oats, canola, lentils and flax, are shocking.
For example, the projected net return over variable and fixed expenses, including summerfallow costs, for direct-seeded spring wheat in the dark brown soil zone is negative $37.19 per acre. Looking strictly at variable expenses, the return is plus $13.64.
For barley direct-seeded in the brown soil zone, the net return is negative $56.98 per acre. Relative to variable expenses alone, the return is negative $12.99.
For canola direct-seeded in the black soil zone, the net return is negative $46.45, with a positive return of $11.95 over variable costs.
The guide indicates producers can achieve positive returns over variable expenses for several cropping options, but Novak said that doesn’t translate into long-term success.
“Some farmers say they only need to generate a return over variable expenses,” he said.
“If they just do that, they can survive over the short term, but you need to cover your total expenses over the longer term.”
The numbers in the planning guide, available on the Sask Agriculture website and also in printed form, are based on projections of forecasted average variable and fixed input costs and crop prices for 2006.
The guide makes assumptions about management practices and does not include labour and management costs for the owner-
operator.
Those responsible for the publication emphasize that it is intended to be only a guide and individuals may fare better or worse, depending on their management practices.
“Many producers may be able to achieve lower input costs and potentially higher prices as well,” said Jacquie Gibney, the province’s assistant deputy minister of agriculture.
“The idea is that it allows them to look at the numbers, compare their costs to the averages and make informed decisions about their cropping alternatives.”
Factors involved
The negative numbers in this year’s guide reflect a combination of higher input costs, particularly fuel and fertilizer, and more significantly, lower prices for most commodities.
Because the numbers are so bad, Novak said he expects most farmers will focus on crops that they have the most experience and success with, that are the easiest to grow and harvest and that have the lowest input costs, keeping in mind their rotational requirements.
Since the outlook for most grain and oilseed prices is bleak, there is no reason to switch to any crop in particular, he added.
“Generally I think people will seed what they would normally seed, while at the same time taking some steps to minimize risk by growing what’s safe and predictable.”
Some farmers may be tempted to reduce inputs, but that could backfire by cutting yields. Some may also consider leaving land fallow.
The farmers with the biggest smiles are those planning to seed borage into fallow in the black soil zone, which will produce a projected return of $251.49 per acre over variable expenses, or $159.27 over total expenses.
