Many projected crop budgets show a negative return to labor and management for 2015, according to Andy Swenson, North Dakota State University Extension Service farm management specialist.
Crop prices have declined but total production costs have resisted this decline. A positive is that projected yields for most crops have increased and some cost items, most notably fuel, will be lower.
About half the regions project a positive return to labor and management for spring wheat, durum and soybeans. The highest returns to labor and management for spring wheat, at approximately $10 per acre, are in the east-central, northeastern and southeastern regions. Soybeans show a return ranging from $14 to minus $14 in all but one region.
Projected returns for corn are negative. It ranges from of minus $40 to minus $73 per acre in all regions except the western regions where lower costs, but greater production risks, reduce the losses to around minus $10 per acre.
Projected per acre returns to labor and management for oil sunflowers range from $2 to minus $14 in the western and central regions. For canola, the projected returns range from minus $10 to minus $20 in the major growing regions. Depending on the region, projected returns for nonoil sunflowers range from $58 to minus $46 per acre.
“Some crops are projecting mostly positive returns for 2015,” Swenson says. “Malting barley and dry edible beans project returns to labor and management ranging from $30 to $50 per acre in most regions. Flax shows similar returns in the north-central, northeastern and western regions.
Lentils are projected to bring the best returns of any crop by ranging from $90 to $115 per acre in the north-central and western regions.”
Minor crops, such as mustard, buckwheat, safflower, chickpeas and rye, also show positive returns to labor and management by ranging from $30 to $50 per acre. However, there may be more production and market price risk with these crops and crop insurance may not be available.
“Overall costs did not decline as I expected,” Swenson says. “Fertilizer prices are very similar to the amounts I used in last year’s budgets. The price of seed, such as for small-grains, will be lower in 2015. A notable exception is durum, which shows a sharp increase. Corn, soybean and dry bean seed is flat to lower, but the price of canola, lentils and safflower seed will increase.”
Crop insurance costs generally will be lower and land costs will be relatively flat. However, repair expenses will increase. Chemical expenses are projected to increase slightly.
“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.