Resources available for production economics

Without a Crop Production Show in Saskatoon, the Saskatchewan Ministry of Agriculture missed a prime opportunity to distribute hard copies of many annual reports so website access is more important than ever. | Screencap via saskatchewan.ca

For some inexplicable reason, provincial agriculture departments have a tendency to bury some of their best work deep within their websites where it’s less likely to be discovered. With the amount of time and effort going into some of these reports, there should be more promotion and better website placement.

Without a Crop Production Show in Saskatoon, the Saskatchewan Ministry of Agriculture missed a prime opportunity to distribute hard copies of many annual reports so website access is more important than ever.

The Specialty Crop Report 2020 is posted showing acreage, yield, production and export destinations for a wide range of pulse and specialty crops from peas and lentils to quinoa and hemp.

The 2020-21 Farm Machinery Custom and Rental Rate Guide was updated in August and it also resides on the Sask Ag website, ready to provide information for the upcoming growing season.

Manitoba Agriculture has a couple of publications published last September to help cow-calf producers with production economics. One is called Guidelines for Estimating Beef Cow-Calf Production Costs based on a 300 head herd corn silage ration. The other is 2021 Cost of Production, Beef Cow-Calf, 150 cow herd, hay ration.

The important part of these documents is to use the template to plug in your own costs and returns. However, with the assumptions used in the reports, the economics of cow-calf production look pretty tough based on the price of calves during the fall run.

That’s in sharp contrast to the outlook for the crop sector. Rarely have the returns looked so bright on so many cropping options.

Both Saskatchewan and Manitoba have developed guides for estimating the economics of grain production in 2021. Saskatchewan has its Crop Planning Guide 2021, while Manitoba calls its publication 2021 Cost of Production, Crops. Look under the Farm Management tabs on the respective websites to find the reports.

Both are quite recent publications, but new crop price assumptions have improved dramatically in a short period of time. For instance, both reports assume a new crop canola price of $11.25 a bushel. That’s well under the price you can now lock in for fall delivery.

The two reports use different methodologies for estimating fixed costs. In Saskatchewan, machinery costs are assumed to be $346 per cultivated acre in the brown soil zone, $390 per acre in the dark brown soil zone and $442 per acre in the black soil zone. That’s based on Statistics Canada data. From that, machinery investment and depreciation costs are calculated.

In Manitoba, the farm management specialists have created a list of used equipment with specific price tags for farming 2,500 acres. The value of equipment comes to $1.25 million or $500 an acre. An additional $150,000 is added for a planter and harvest header in the event the farm is growing a specialty crop where that equipment is needed.

What is your equipment investment per acre? That makes a big difference in fixed costs.

Based on Manitoba’s assumptions, the most profitable crops are pinto beans followed by white beans, corn, canola, oats and soybeans.

Saskatchewan analyzes each crop in each of the three different major soil zones using a high level of inputs with crop yields targeted at the 80th percentile. In other words, 80 percent of producers would attain less than this yield. They also do a calculation leaving costs the same, but assuming only an average yield.

Combing through the reports will help with the analysis of your own numbers.

Kevin Hursh is an agricultural journalist, consultant and farmer. He can be reached by e-mail at kevin@hursh.ca.

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