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Publication 60
2008 Field Crop Budgets

Author: John Molenhuis - Business Analysis and Cost of Production Program Lead/OMAFRA
Creation Date: 4 January 2008
Last Reviewed: 4 January 2008

Table of Contents

Introduction

These crop budgets are a simple format for estimating expenses. The sample costs are only a guide to illustrate a method of preparing your projections. They are based on many assumptions, including seeding rates, levels of fertilizer use, etc. Due to regional differences, there may be considerable variation in results.

To project your breakeven price after total costs, enter your farm figures in the spaces provided. The resulting estimate will assist you in choosing your crop mix, and setting target prices and marketing strategies for your farm.

Electronic versions of these crop budget worksheets can be found by going to the www.ontario.ca/agbusiness website and choosing Cost of Production Budgets.

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2008 Field Crop Budgets

Crop budgets are a management tool to estimate costs and evaluate cropping alternatives. The sample costs are not averages or recommended treatments. The budgets comprise treatments derived from crop advisors in the areas where the crops are commonly grown. There will be differences due to growing region, cropping practices, individual needs and yield expectations. The budgets, unless indicated otherwise, are based on conventional tillage practices. Seed costs, except for the Bacillus thuringiensis (Bt) and Roundup Ready (RR)® Corn, Spring Canola and Soybeans, are non-genetically enhanced varieties. The budgets developed for Bt or RR® varieties do not represent an endorsement of these products. They are included due to the current predominance of these production systems in field crop operations. Roundup Ready varieties are registered products of Monsanto Canada Inc.

Identity Preserved (IP) crops require budgeting for any extra expenses and revenue - for example increased seed, weed control, storage and equipment cleaning costs. Some of the budgets provide a line item for this.
Interest rates were calculated at 7.25 per cent for the period between planting and harvest.

These budgets will be most meaningful if you use your expected yields and specific costs in developing production plans. Sample costs were taken from the 2008 Ontario Enterprise Budgets. The crop insurance premiums shown are the producer premiums at the highest coverage level and, at the floating-price, if available.

The estimated costs for machinery are derived from agricultural engineering formulas and Ontario average custom rates. The Ontario average custom rates are allocated across the six machinery-related expenses. It is recommended that you use your records to derive your costs. Experience is the best guide to help budget machinery costs. Prior year's statements of income and expenses can provide information on equipment repairs, maintenance, and fuel costs. The portion of those costs that relate to crop production can be divided by the acres of crop produced to arrive at a cost per acre.

Overhead expenses are a major part of the total cost of doing business. In addition to the depreciation of machinery, include depreciation on all related tools and storage buildings. Land costs would include property tax and any other land related costs. Other overhead expenses should include insurance, professional fees, office, vehicles and storage. In all cases, divide overhead expenses by the acreage of crop to express costs on a per acre basis. Return on investment is an opportunity cost to you - the rate of return that you expect or want on your invested capital.

If there are significant debt commitments for land and equipment, an alternative method of budgeting overhead expenses is to use the debt servicing requirements. In this case, use the actual interest and principal payment commitments, rather than depreciation and expected return on invested capital.

"Total Revenue" is the yield you expect multiplied by the price you expect. Yield information is most accurate if based on your experience with the land and techniques you will be using. If you do not have such records, check with AGRICORP or a local farm supply dealer. They can help you develop plans and reasonable expectations for your crops.

"Gross Margin" is the difference between total operating expenses and total revenue. "Operating Expenses" (seed, fertilizer, fuel, repairs) change with the crop grown and the production blend used. "Fixed or (overhead) Costs" will show little or no change whether one crop or another is grown. "Gross Margin" is a quick and easy measure for comparing relative profitability among your cropping choices.

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Table 1. Adjustment for Nitrogen Requirement to Crops Following a Legume Crop
Type of Crop N Requirement Reduction (kg/ha) for all Crops
Corn Other Crops
Less than 1/3 legume
0
0
1/3 to 1/2 legume
55
55
1/2 or more legume
110
110
Perennial legumes seeded/ploughed in same year
80
451
Soybean and field bean residue
30
0

1 Applies where the legume stand is thick and over 40 cm (16 in.) high.

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2008 Crop Comparison Summary Table for Selected Field Crops ($/acre)*

 

Corn Convent-
ional Tillage

 Roundup Ready® Spring Canola Non GMO Soybeans No Till Roundup Ready® Soybeans No Till Coloured Beans White/
Black Beans		 Soft Winter Wheat No Till Barley

Hard
Red Spring Wheat
Seed
61.90
58.10
35.90
52.00
105.00
67.40
37.70
33.50
47.30
Seed Treatment
 
 
5.00
5.00
 
 
 
 
 
Fertilizer
108.45
81.70
17.80
17.80
30.25
30.25
63.90
53.05
61.85
Pesticides
38.40
5.40
47.25
18.00
57.90
54.25
7.15
21.50
6.60
Total Inputs
208.75
145.20
105.95
92.80
193.15
151.90
108.75
108.05
115.75
Tillage
41.00
37.00
 
 
58.00
42.00
 
37.00
37.00
Planting
16.00
15.00
21.00
21.00
17.00
21.00
21.00
15.00
15.00
Spraying
9.00
9.00
18.00
18.00
18.00
18.00
9.00
9.00
9.00
Fertilizing
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
Harvesting & Trucking
61.35
41.95
43.25
43.25
96.75
50.75
49.70
45.50
44.05
Total Machinery
136.35
111.95
91.25
91.25
198.75
140.75
88.70
115.50
114.05
Drying
61.55
 
10.15
10.15
 
 
 
 
 
Crop Insurance
14.10
16.15
9.50
9.50
16.95
11.80
9.95
3.75
7.80
Interest @ 7.25%
14.70
8.15
7.05
6.60
10.75
9.25
10.90
8.45
6.90
Marketing & Other
30.10
3.40
9.70
9.70
4.10
6.50
4.20
 
2.60
Total Costs
465.55
284.85
233.60
220.00
423.70
320.20
222.50
235.75
247.10
Yield
                 
Price
                 

Gross
Return

                  
Net Margin /Acre
                  
Less: Land Cost/Rent
                 
Less: Utilities/ Acct/Misc.
                 
Net Return /Acre
                 
* The crop comparison summary table is derived from the individual budgets in the publication. Some expense items have been combined in the summary table.
For the breakout of the individual expenses refer to the respective budget in the publication.

® Roundup Ready varieties are registered products of Monsanto Canada Inc.

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Alfalfa -Timothy Hay

Direct Seeding Establishment
 Sample Costs/Acre Your Farm Budget
Seed - 12 lb/acre alfalfa
47.70
  
Other seed (Timothy - 4 lb/acre)
7.40
  
Inoculant
1.05
  
Fertilizer - 50 kg/ac 8-32-16
24.55
  
Fertilizer - 130 kg/ac 0-0-60 (applied in fall)
33.60
  
Herbicide - burndown and broadleaf control
23.05
  
Crop insurance
2.65
  
Tractor and Machine Expenses - Fuel (20 L) and lubricants
20.35
  
Tractor and Machine Expenses - Repairs
18.00
  
Custom Work (2 pesticide applications)
18.00
  
Custom Work (2 fertilizer applications, mixing & delivery)
18.00
  
Custom Work (bale wrapping - 1 cut)
30.85
  
Twine    
Operator labour (self or hired)
34.20
  
Interest
17.75
  
Total Establishment Year Expenses
297.15
  

Annual Operating Expenses (assuming 2 cuts)*
Sample Costs/Acre
 Your Farm Budget
Establishment year expenses - over 4 years (less Est. year sales)
33.85
  
Fertilizer - 10 kg/ac 0-46-0
5.30
  
Fertilizer - 50 kg/ac 0-0-60 (applied in fall)
19.10
  
Tractor and Machine Expenses - Fuel (15L) and lubricants
15.70
  
Tractor and Machine Expenses - Repairs
20.00
  
Twine
  
  
Crop insurance
11.30
  
Custom work (2 fertilizer application, mixing & delivery)
18.00
  
Custom work (bale wrapping)
61.70
  
Other costs
  
  
Land rent    
Operator labour (self or hired)
34.30
  
Interest on operating
8.55
  
Total Annual Operating Expenses
227.80
  
*Note: Assuming 3 cuts, the Annual Operating Expenses per acre would increase

Revenue Your Farm Budget
Expected Yield _______________  
Expected Price _______________  
Total Revenue (Yield x Price)  
Gross Margin (Revenue - Operating Expenses)  

Overhead Expenses
Sample Costs/Acre
 Your Farm Budget
Machinery - Depreciation
34.80
  
Machinery - Interest on investment
26.00
  
Land
  
  
Other overhead
8.00
  

Nitrogen Credit to Following Crops in Rotation
Sample Costs/Acre
 Your Farm Budget
Nitrogen credit ($/acre = N reduction (from Table 1 x price of N)    
Grain yield increase    
Total benefits/year
  
  
Total Expenses
296.60
  

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Barley

Operating Expenses
(costs based on projected yield of 1.5 tonne/ac (70 bu/ac))
 Sample Costs/Acre Your Farm Budget
Seed - 120 lb/acre certified treated (1.0 - 1.4 m seeds/ac)
33.50
  
Fertilizer - 64 kg/ac Urea (2800 or less Corn Heat Units (CHU)
35.25
  
Fertilizer - 40 kg/ac Urea (2800 or more CHU)
22.00
  
Fertilizer - 20 kg/ac P
18.30
  
Fertilizer - 20 kg/ac K
12.75
  
Herbicide - Annual grasses and Broadleaf weeds
6.60
  
Fungicide, if required
14.90
  
Tractor and Machine Expenses - Fuel (12 L) and lubricants
12.15
  
Tractor and Machine Expenses - Repairs and maintenance
16.15
  
Crop insurance
3.75
  
Custom work (fertilizer application, mixing & delivery)
9.00
  
Custom work (pesticide application)
9.00
  
Custom work (other)    
Trucking ($7.00/tonne)
10.50
  
Storage
  
  
Land rent
   
  
Operator labour (self or hired)
9.30
  
Interest on operating
8.45
  
Total Operating Expenses - Grain (2800 or less CHU)
199.60
  
Total Operating Expenses - Grain (2800 or more CHU)
186.35
  
 
Expenses for Straw
Sample Costs/Acre
 Your Farm Budget
Tractor and Machine Expenses - Fuel (3 L) and lubricants
2.80
  
Tractor and Machine Expenses - Repairs and maintenance
3.25
  
Twine
2.75
  
Other
10.20
  
Total Operating Expenses - Straw
19.00
  
Total Operating Expenses (2800 or less CHU)
218.60
  
Total Operating Expenses (2800 or more CHU)
205.35
  

Revenue Your Farm Budget
Expected barley yield _______________  
Expected barley price _______________  
Total Market Revenue (Yield x Price)  
Program payment  
Total Barley Revenue  
Expected straw yield _______________  
Expected straw price _______________  
Total Straw Revenue (Yield x Price)  
Total Revenue  
Gross Margin (Revenue - Operating Expenses)  

Overhead Expenses
Sample Costs/Acre
 Your Farm Budget
Barley Only Barley + Straw
Machinery - Depreciation
26.30
30.30
  
Machinery - Interest on investment
19.10
22.60
  
Land
  
  
  
Other overhead
4.35
5.35
  
Total Expenses (2800 or less CHU)
249.35
276.85
  
Total Expenses (2800 or more CHU)
236.10
263.60
  
Breakeven price on your farm is: (total expenses/expected yield)  

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Spring Canola

Operating Expenses
(costs based on projected yield of 0.85 tonne/ac)
 Sample Costs/Acre Roundup Ready®
Sample Costs/Acre 		Your Farm Budget
Seed - 5 lb/acre - hybrid, treated
39.55
43.10
  
Fertilizer - 60 kg/ac 6-24-24
26.65
26.65
  
Fertilizer - 100 kg/ac Urea1
55.05
55.05
  
Herbicide - Preplant, incorporated
16.25
  
  
Herbicide - Mustard control, if required
12.30
  
  
Herbicide - Other weed control
  
5.40
  
Technology use agreement
  
15.00
  
Insecticide, if required
  
  
  
Fungicide, if required
  
  
  
Tractor and Machine Expenses - Fuel (12 L) and lubricants
12.15
12.15
  
Tractor and Machine Expenses - Repairs and maintenance
16.15
16.15
  
Marketing fees ($4.00/tonne)
3.40
3.40
  
Crop insurance
16.15
16.15
  
Custom work (fertilizer application, mixing & delivery)
9.00
9.00
  
Custom work (pesticide application)
9.00
9.00
  
Custom work (other)
  
  
  
Trucking ($7.00/tonne)
5.95
5.95
  
Storage
  
  
  
Land rent
  
  
  
Operator labour (self or hired)
8.40
8.40
  
Interest on operating
8.35
8.15
  
Total Operating Expenses
238.35
233.55
  

Revenue Your Farm Budget
Expected yield _______________  
Expected price _______________  
Total Market Revenue (Yield x Price)  
Program payment  
Total Revenue  
Gross Margin (Revenue - Operating Expenses)  

Overhead Expenses Sample Costs/Acre Roundup Ready®
Sample Costs/Acre 		Your Farm Budget
Machinery - Depreciation
27.00
27.00
  
Machinery - Interest on investment
18.60
18.60
  
Land
  
  
  
Other overhead
5.80
5.80
  
Total Expenses
289.75
284.95
  
Breakeven price on your farm is: (total expenses/expected yield)  

1 Nitrogen rate is based on nitrogen price of $1.20/kg (0.54/lb) N and a canola price of $465/t.

More accurate nitrogen requirements for canola, adjusted for yield and fertilizer cost, may be obtained by referring to the canola section of the OMAFRA Agronomy Guide for Field Crops, Publication 811.

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Winter Canola

Operating Expenses
(costs based on projected yield of 1.3 tonne/ac)
 Sample Costs/Acre Your Farm Budget
Seed* - 3.5 lbs/acre - hybrid, treated
34.60
  
Fertilizer** - 67 kg/ac 7-30-24
34.25
  
Fertilizer** - 137 lb/ac N (114 kg/ac urea + 45 kg/ac ammonium sulphate)1
81.20
  
Herbicide - volunteer cereal control (fall)
8.00
  
Insecticide, if required (Cabbage Seedpod Weevil)
6.90
  
Fungicide, if required
   
  
Tractor and Machine Expenses - Fuel (9 L) lubricants
9.35
  
Repairs and maintenance
13.05
  
Marketing Fees ($4.00/tonne)
5.20
  
Crop insurance
16.15
  
Custom work (fertilizer application, mixing & delivery)
9.00
  
Custom work (2 pesticide applications)
18.00
  
Custom work (other)
  
  
Trucking ($7.00/tonne)
9.10
  
Storage
  
  
Land rent
  
  
Operator labour (self or hired)
6.20
  
Interest on operating
9.10
  
Total Operating Expenses
260.10
  

Revenue Your Farm Budget
Expected yield _______________  
Expected price _______________  
Total Market Revenue (Yield x Price)  
Program payment  
Total Revenue  
Gross Margin (Revenue - Operating Expenses)  

<
Overhead Expenses Sample Costs/Acre Your Farm Budget
Machinery - Depreciation
18.90
  
Machinery - Interest on investment
13.50
  
Land    
Other overhead
4.30
  
Total Expenses (Hybrid)
296.80
  
* Seeding rate recommended range is 3 - 5 lbs/acre. The lower rate may be difficult to achieve with some seed drills.
** Fertilizer recommendation is for a field testing low in phosphorus and potassium. Additional nitrogen in the fall may be beneficial if seeding is delayed.
1.45 kg/ac ammonium sulphate supplies 24 lb/ac sulphur.

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Coloured Beans

Operating Expenses
(costs based on projected yield of 18 cwt/ac)
Sample Costs/Acre Your Farm Budget
Seed - 80 lb/acre (wide rows) certified, treated seed (with Cruiser Insecticide)
105.00
  
Fertilizer - 68 kg/ac 6-24-24
30.25
  
Fertilizer - nitrogen, if required
  
  
Herbicide - annual grass
16.35
  
Herbicide - broadleaf weeds
22.25
  
Herbicide - other weed control, if required
  
  
Insecticide (potato leafhopper control)
10.30
  
Fungicide, if required
  
  
Crop Pre-harvest
9.00
  
Tractor and Machine Expenses - Fuel (24 L) and lubricants
24.50
  
Tractor and Machine Expenses - Repairs and maintenance
25.00
  
Marketing fees ($5.00/tonne)
4.10
  
Crop insurance
16.95
  
Custom work (fertilizer application, mixing & delivery)
9.00
  
Custom work (pesticide application)
18.00
  
Trucking ($7.00/tonne)
5.75
  
Drying      
Land rent
  
  
Operator labour (self or hired)
18.95
  
Interest on operating
10.75
  
Total Operating Expenses
326.15
  

Revenue Your Farm Budget
Expected yield _______________  
Expected price _______________  
Total Market Revenue (Yield x Price)  
Less Pick Charges (typically 2% - 4%)  
Program payment  
Total Revenue  
Gross Margin (Revenue - Operating Expenses)  

Overhead Expenses Sample Costs/Acre Your Farm Budget
Machinery - Depreciation
50.25
  
Machinery - Interest on investment
37.70
  
Land    
Other overhead
8.80
  
Total Expenses
423.35
  
Breakeven price on your farm is: (total expenses/expected yield)  

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Grain Corn

Operating Expenses
(costs based on projected yield of 3.48 tonne/ac (137 bu/ac))

 Tillage System Your Farm Budget
Conventional Minimum Till No-Till
Sample Costs/Acre Sample Costs/Acre Sample Costs/Acre
Seed - 30,000 kernels
61.90
61.90
61.90
  
Fertilizer1 - 28 kg/ac MAP 11-52-0
17.00
17.00
17.00
  
Fertilizer1 - 32 kg/ac
Muriate of Potash 0-0-60
12.25
12.25
12.25
  
Fertilizer1 - 66 kg/ac N (236 kg/ac of 28-0-0 U.A.N.)
79.20
79.20
79.20
  
Herbicide - annual grass and broadleaf weeds
38.40
38.40
38.40
  
Herbicide - burndown
  
  
9.00
  
Herbicide - other weed control, if required
   
   
   
  
Insecticide, if required
   
   
   
  
Tractor and Machine Expenses - Fuel (18 L conv., 16 L min, 12 L no till) and lubricant
18.65
16.55
12.65
  
Tractor and Machine Expenses - Repairs and maintenance
16.95
15.00
9.00
  
Marketing fees ($0.40/tonne)
1.40
1.40
1.40
  
Crop insurance
14.10
14.10
14.10
  
Custom work (fertilizer appl., mixing & delivery)
9.00
9.00
9.00
  
Custom work (pesticide application)
9.00
9.00
9.00
  
Custom work (other)
  
  
  
  
Trucking ($7.00/tonne)
24.35
24.35
24.35
  
Drying (17.70/tonne, 8 points)
61.55
61.55
61.55
  
Land rent
  
  
  
  
Operator labour (self or hired)
12.95
9.65
7.20
  
Storage ($2.06/tonne/month x 4 months)
28.70
28.70
28.70
  
Interest on operating
14.70
14.45
14.65
  
Total Operating Expenses
420.10
412.50
418.35
  

Revenue Your Farm Budget
Expected yield _______________  
Expected price _______________  
Total Market Revenue (Yield x Price)  
Program payment  
Total Revenue  
Gross Margin (Revenue - Operating Expenses)  

Overhead Expenses Tillage System Your Farm Budget
Conventional Minimum Till No-Till
Sample Costs/Acre Sample Costs/Acre Sample Costs/Acre
Machinery - Depreciation
24.00
22.00
14.50
  
Machinery - Interest on investment
17.10
16.00
12.00
  
Land
  
  
  
  
Other overhead
4.70
4.15
3.00
  
Total Expenses
465.90
454.65
447.85
  
Breakeven price on your farm is: (total expenses/expected yield)  

1 Nitrogen rate is based on the NEW nitrogen rate calculator. Nitrogen recommendation is for corn grown in southwestern/central Ontario, 2800 HU, loam soil, following wheat, with projected corn yield of 137 bu/ac, and nitrogen cost of $1.20/kg and corn price of $3.95/bu.

More accurate nitrogen requirements for corn,may be obtained on the internet at GOCORNNET. A CD version is available by contacting OMAFRA contact centre at 1-877-424-1300.

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Grain Corn - Genetically Enhanced Hybrids

Operating Expenses

(costs based on projected yield of 3.48 tonne/ac (137 bu/ac))

 Conventional Tillage Your Farm Budget
Bt
Bacillus thuringiensis		 RR®
Roundup Ready		 Bt and RR
Sample Costs/Acre Sample Costs/Acre Sample Costs/Acre
Seed - 30,000 kernels
72.00
74.20
84.55