2013 Field Crop Budgets
Table of Contents
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
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
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)
Applies where the legume stand is thick and over 40 cm
(16 in.) high.