It looks like a year of marginal profitability for Manitoba farmers.
Based on current costs, average yields and present forward prices for the big five crops, farmers should be able to squeeze a bit more money from their acres than it costs to farm them, according to Manitoba Agriculture’s Farm Management team.
“I really hope that $11 (per bushel for canola) is the new $10, because we get below $10, we get a lot of problems with profitability at average yields,” said Roy Arnott, speaking at St. Jean Farm Days.
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Farmers with average costs and yields, as well as expected prices, should make about $49 per acre on corn, $46 per acre with soybeans, $16 on canola, $11 on oats and lose $13 on hard red spring wheat.
That doesn’t provide a lot of room for production problems or a market slump.
Arnott’s calculations are based on assumptions that some high-yielding farmers might find too conservative, but for many they are reasonable based upon long-term averages and trends.
He is assuming farmers will grow a crop of 40 bu. per acre canola that they sell at $11, 55 bu. of hard red spring wheat at $6.75, 38 bu. of soybeans at $11, 105 bu. of oats at $3.35 and 141 bu. of corn at $4.25.
If only operating costs, which exclude land, machinery payments and labour, are ignored, the margin is much better, but Arnott said farmers need to account for those. In the long run, those aren’t calculations that farmers can cut out of the profitability equation.
These are Manitoba projections and not necessarily applicable to Saskatchewan or Alberta. However, the production and profitability equations can be run by any farmer using his own production costs and results.
They are available at Manitoba.ca/agriculture in the Production Economics section.
