Publication 60
2013 Field Crop Budgets

Table of Contents

• Introduction
• 2013 Field Crop Budgets
• 2013 Crop Comparison Summary Table
  for Selected Field Crops ($/acre)*
• Alfalfa-Timothy Hay
• Barley
• Spring Canola
• Winter Canola
• Coloured Beans
• Grain Corn
• Silage Corn
• Flax
• Oats
• Soybeans
• Soft Winter Wheat
• Hard Red Winter Wheat
• Hard Red Spring Wheat
• White/Black Beans
• Organic - Grain Corn and Soybeans
• Organic - Winter Wheat and Spelt
• Organic - Barley and Oats
• Resources
• Application Rate Conversion

Introduction

These crop budgets are a tool 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 break-even price after total costs, enter your farm figures in the spaces provided. The resulting estimate will help you choose your crop mix and set target prices and marketing strategies for your farm.

Electronic versions of these crop budget worksheets can be found at www.ontario.ca/agbusiness under Cost of Production Budgets.

2013 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), Roundup Ready (RR) and herbicide-tolerant corn, spring canola and soybeans, are for non-genetically enhanced varieties. The budgets developed for Bt, RR or herbicide-tolerant 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.

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 4.0% 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. Input prices for seed, fertilizer, fuel and pesticides were based on the survey results reported in the Ontario Farm Input Monitoring Project conducted by the University of Guelph, Ridgetown campus (www.ridgetownc.uoguelph.ca/research/research_reports_topic.cfm?ref=FARM_INPUT_PRICES). 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 relates 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. Interest 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" (e.g., seed, fertilizer, fuel, repairs, etc.) 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.

Table 1. Adjustment for nitrogen requirement to crops following a legume crop

Type of Crop	N Requirement Reduction (kg/ha)
	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.