2021 crop budgets and the new agricultural budget
TRANSCRIPT
Glennis McClureAgricultural Economist
2021 Crop Budgets and the New Agricultural Budget
Calculator Program
Today’s Presentation
vWhy is it important to know your cost of production?
vUNL Crop Budgets- 2021 Updates- Components of the crop budgets
vKey data utilized in enterprise budgeting
vThe New Ag Budget Calculator Program (ABC)
FARM.UNL.EDU
•UNL CROP BUDGETS •UNL LIVESTOCK BUDGETS•UNL CUSTOM RATES REPORT
Know Your Cost of Production – WHY?
Determine Production practices and inputs used
Compare Profitability of various enterprises
Use In marketing and cost control
Nebraska Crop Budgets
• 83 UNL Crop Budgets Representing 15 crops
• Modify the Budgets using Excel
• Added to New Ag Budget Calculator
2021 Crop Budget Updates
Fuel Prices – decreased*Lower machinery operation costs *Lower some material costs herbicides
and fertilizer
Some material /products added or use changes
Land prices were adjusted slightly up
RE Tax rate decreased .10% - Nebraska RE Tax Credits
Overhead costs per acre increased $5/acre
Spring Wheat Budget #74 Added74-Wheat-Spring, Southwest, No Till, Wheat after Row Crop, 40-bushel Yield, Dryland
Cash Cost per bushel $4.25Total Cost per bushel $6.00
Photo by Kai Pilger on Unsplash
2021 Crop Budget Averages
UNL Crop Averages
Average Yield Est.
Cash Cost /bu
Economic Cost /bu
2021 Dryland Corn 150 bu $2.35 $3.49
2021 Irrigated Corn 242 bu $2.26 $3.16
2021 Dryland Soybean 45 bu $5.39 $8.17
2021 Irrigated Soybean 73 bu $4.64 $7.75
2021 Dryland Wheat 66 bu $4.88 $3.22
2021 Irrigated Wheat 98 bu $4.20 $3.11
Budget Cost per Unit Comparisons 2020 & 2021 Projections
2020 Cash Cost per bushel
2021 Cash Cost per bushel
2020 Total Cost per bushel
2021 Total Cost per bushel
Dryland Wheat #75 $3.24 $3.15 $4.48 $4.42Irrigated Wheat #80 $2.87 $2.66 $3.88 $3.66
Dryland Soybeans #59 $5.41 $5.30 $7.98 $8.08Irrigated Soybeans #63 $5.21 $4.89 $8.55 $8.35
Dryland Corn #16 $2.77 $2.54 $3.95 $3.83Irrigated Corn #33 $2.08 $1.99 $2.90 $2.85
Crop Budget SegmentsExample Soybean #63
Unit Power Imp. Power Imp.Spray Burndown Herbicide 1 0.95 0.14 0.35 0.60 1.03 1.08 4.15Plant Narrow Row 1 3.00 0.45 1.16 2.91 3.39 4.05 14.96Spray Herbicide 1 0.95 0.14 0.35 0.60 1.03 1.08 4.15Aerial Spray CustomAerial Spray CustomPivot D 125' Lift 6 ai 5.21 19.21 2.06 10.38 3.91 5.70 46.47Combine Irr SB 1 4.58 3.02 11.16 2.21 11.93 4.38 37.28Truck Custom
Total for Field Operations 14.69 22.96 15.08 16.70 21.29 16.29 107.01
Field OperationsTimes or Qty
Labor @ $25.00
/HrFuel @ $1.50
and Lube
Repairs
Total
Ownership̂
Materials & Services Rate Unit Total Glyphosate 5# w/Surfactant 1 100% 32 ounce 0.09 3.002,4-D Ester LV4 1 100% 1 pint 2.00 2.0021-0-0-24S 1 100% 1.7 pound 0.31 0.53Fierce MTZ 1 100% 1.25 pint 18.00 22.50RR2 Soybeans Treated 2 100% 1 bag 62.00 62.00Roundup WeatherMax 3 100% 48 ounce 0.23 11.2521-0-0-24S 3 50% 1.7 pound 0.31 0.26Aerial Spray 4 20% 1 acre 10.00 2.00Warrior II/Zeon 4 20% 1.6 ounce 2.50 0.80Aerial Spray 5 20% 1 acre 10.00 2.00Priaxor 5 20% 4 ounce 4.69 3.75Haul Grain Bushels 8 100% 64 bushel 0.11 7.04Scouting Irrigated Soybeans 100% 1 acre 12.00 12.00
7.00 7.00
Total Materials & Services 136.13
Custom
AdditiveCustom
InsecticideCustom
Fungicide
Herbicide
Operation Index
Percent Acres
Applied
Application Applied Price
HerbicideHerbicideAdditiveHerbicide
Seed
ScoutingCrop Insurance
Total listed costs for Field Operations and Materials and Services 243.14Interest on Operations Capital 205.56$ 5.50% for 6.0 mo. 5.65
Total Operating and Use Related Ownership Costs 248.79
Overhead (accounting, liability insurance, vehicle cost, office expense) 25.00Real Estate Opportunity^ 6,125$ 3.00% 183.75Real Estate Taxes 6,125$ 1.25% 76.56Total Cost per Acre Including Overhead 534.10
Pivot (State) per acre @per acre @
cash expense @
Cash Cost per bushel ^Ownership and RE Opportunity not included in cash costs. 4.89Cost of production per bushel 8.35
FIELD OPERATIONS
INTEREST, OVERHEAD & R.E. COSTS
MATERIALS & SERVICES
Ownership Costs – Machinery and LandMachinery & Equipment Ownership Costs include Depreciation + Opportunity Interest Cost
Annual Depreciation = (Purchase Price – Salvage) / UseDepreciation per Hour or Acre = Annual Depreciation /Hour or AcreAfter the power unit and an implement is added in an operation, Depreciation per Acre is calculated.
Depreciation per Acre: Hourly Depreciation Rate / Coverage Rate of Associated Implement *Salvage Value Formula are from the American Society of Agricultural and Biological Engineers D497.7, Section 6.1
+Annual Opportunity Cost Interest: (Purchase price + salvage)/2) x Opportunity Cost Percentage
Land Opportunity Cost
Value of Land Per Acre x Opportunity Cost Percentage
Or
Cash Rental Value Per Acre
2021 Irrigated No Till Soybeans – UNL Budget #63 Cost of Production Estimate Per Acre
Labor
Fuel
Machine
Ownership
Overhead
Seed
Herbicide
Repairs
Real Estate Taxes
Real Estate
Opportunity
Costs
SeedHerbicideOther PesticidesCrop InsuranceOther Materials & ServicesLaborFuelRepairsMachine OwnershipReal Estate TaxesReal Estate Opportunity CostsOverheadOperating Interest
Seed & Pesticide: 20%Field Operations: 20%Land Costs: 49%All Other Costs: 11%
Total Cash Costs: $313 / acreTotal All Costs: $534 / acre 64 Bushel Yield
Cash Costs / Bu = $4.89 / buEconomic Costs /Bu = $8.35 / bu
2021 Dryland No Till Corn – UNL Budget #23 Cost of Production Estimate Per Acre
Other Materials & Services
Overhead
Seed
Ferti
lizer Herbicide
Crop Insurance
Labor
Repairs
Real Estate
Taxes &
Opportunity
CostsSeedFertilizerHerbicideOther PesticidesCrop InsuranceOther Materials & ServicesLaborFuelRepairsMachine OwnershipReal Estate Taxes & Opportunity CostsOverheadOperating Interest
Seed & Pesticide: 27%Fertilizer 9%Field Operations: 16%Land Costs: 29%All Other Costs: 19%
Total Cash Costs: $330 / acreTotal All Costs: $462 / acre 145 Bushel Yield
Cash Costs / Bu = $2.28 / buEconomic Costs /Bu = $3.19 / bu
Key Data Utilized inEnterprise Budgeting
§ Cropping system information OR§ Livestock system & how many head § Annual rates and prices§ Field operations including machinery
and implement costs§ Irrigation system expenses § Material inputs and service costs (feed)§ General farm overhead expenses§ Yield and revenue projections
Enter Your Own Machinery & Equipment
Enter Your Material Inputs and Application Rates
Additional Features of the Ag Budget Calculatorq Create or Customize Your Own Budgetsq Revenue Section – Risk Moduleq Reconciliation of Overhead Expensesq Livestock Enterprise Budgetingq Whole Farm Reportsq Cash Flow
go.unl.edu/dec14budgets
TAKE HOME POINTS
• Using enterprise budgets to project cost of production is a critical part of effective management.
• Knowing your costs and your break-even levels provides a foundation in managing costs and developing marketing plans.
• The Ag Budget Calculator (ABC) program will be a new resource to figure crop enterprise budgets for 2021 and beyond with added features in the works. Learn more at: farm.unl.edu/abc
Questions?
Bob KleinWestern Nebraska Crop [email protected]
Glennis McClureAgricultural [email protected]
ABC Program Virtual Workshop – December 14th go.unl.edu/dec14budgets