September/
October 1998
Increase Accuracy of Estimating Crop Profit/Loss
By Tracy Sayler
Library
Back
Prairie Grains is the
official publication of
the Minnesota
Association of
Wheat Growers,
North Dakota Grain
Growers Association,
South Dakota Wheat,
Inc., and the
Minnesota Barley
Growers Association.
"Accuracy is everything in increasing your likelihood of success in this business," he says. Get in the habit of following the timeline below to enter production numbers, Berg suggests. Use a rainy day or downtime to get caught up if you fall behind in recording some of the early-season numbers. Following the plan can reduce end-of-year stress later, and give you a jump start for decisions in 1999.
What to jot down before July 31:
1) Crop name
2) Acres planted- owned/rented
3) Government payment
4) Seed cost
5) Crop insurance
6) Rent
What to jot down before harvest:
1) Fertilizer expense
2) Pesticide expense
What to jot down right after harvest:
1) Crop production
2) Any other crop income
3) Custom hire
4) Hired labor
5) Other crop expense
Expenses such as: 1) fuel & oil; 2) repairs - machinery and equipment; 3) repairs - buildings; 4) hired labor; 5) machinery leases; 6) land cost (for ground not rented); 7) general farm insurance; 8) interest; 9) utilities; 10) depreciation; and 11) miscellaneous are allocated from whole farm expenses, which are divided over wheat and other crops and livestock produced on a farm.
Farmers enrolled in the farm business management program receive an enterprise analysis each year of those and other factors. However, Berg says a crop producer can analyze these factors by him or herself after harvest without too much number-crunching strain using "work units" established for different crops.
Work Units are:
All Small Grain = .30
Alfalfa Hay = .60
Edible Beans = .50
Corn Silage = .60
Soybeans = .45
Sunflowers = .40
Sugar Beets = 2.00
Potatoes = 3.00
Say your fuel bill on 150 acres of wheat and 200 acres of sunflowers is $3,700, and you want to know what the per-acre fuel cost is for each crop.
1) Multiply the established work units (WU) for both crops by the total acreage number for each crop:
.30 Wheat WU x 150 wheat acres = 45
.40 Sunflower WU x 200 SF acres = 80
Total WU: = 125
2) Then, divide the total cost you are analyzing (in this example, the $3,700 in fuel) by the total work units to arrive at the cost per work unit:
$3,700 fuel ÷ 125 = $29.60/WU
3) Now, multiply that by the established work unit for each crop to get cost per acre:
Fuel for wheat = $29.60 x .30 WU
= $8.88/acre fuel expense
Fuel for sunflowers = $29.60 x .40 WU
= $11.84/acre fuel expense
In western Minnesota, the FBM program is coordinated by Northland Technical College, Thief River Falls, MN, ph. 218-681-0800 , or toll free 800-959-6282. The FBM program in North Dakota is coordinated by Joel Janke, ag education supervisor at the department of vocational education in Bismarck, phone 701-328-3167. Andy Swenson, NDSU extension farm management specialist, also works with the program, his phone is 701-231-7379. The FBM program in South Dakota is coordinated by Gary Gray, program education representative, division of work force career preparation, ph. 605-773-4726. n