FORESIGHT FOR SUCCESSFUL CROPPING SYSTEMS

Crop Selection for 2003: Assessing What to Grow on Each Field

By Zachary Fore
U of M Cropping Systems Specialist
forex002@umn.edu

There is a logical process that you can use to help you choose which crop to grow on each field in 2003. Here are some key steps in the crop selection process:

•  Know your production costs and yield potential.

•  Estimate what price you can expect to get.

•  Understand the rotation effect.

•  Do price/yield scenarios to help understand your risk.

•  Understand what effect the farm program has on each crop.

Production Costs and Yield Potential
Table 1 shows the average production costs for common crops grown in the region.  Production cost data is obtained from the 2001 Summary of the Northwest Minnesota Farm Business Management Association.  All direct and indirect costs are included.  Charges for labor and management are not included.

The figures in Table 1 give you a general indication of production costs for various crops. The averages are nice to know, but what really is important is, what are your production costs? Each farm is different, so you should be using cost data from your own farm. 

Table 1. Production Costs

Crop	Prod. Costs ($/A)
Spring Wheat	166
Barley	155
Corn	221
Sunflowers – Oil	162
Soybeans	150
Navy Beans	243*
Canola	184
Alfalfa – Established	168
*Navy bean production costs are obtained from the 2001 MN and ND Red River Valley Farm Business Management Report.

Table 2 gives a detailed listing of production costs for spring wheat. The table gives a breakdown of average costs, and costs for the low 20% and high 20% of farms based on their net farm income.  The table has an open column where you can input your actual costs.  You should prepare a ‘crop budget’ like this for each crop you are considering planting, so you have a reasonably accurate estimate of your production expenses.

Table 2. Spring Wheat Crop Budget Example

Expense Category	Avg.	Low 20%*	High 20%*	Your Costs
Direct Expenses
Seed	9.75	11.17	10.22
Fertilizer	29.01	33.85	28.07
Crop Chemicals	22.65	24.93	17.67
Crop Insurance	8.14	10.43	5.92
Fuel and Oil	8.94	12.00	8.31
Repairs	12.73	18.25	11.28
Custom Hire	2.84	6.03	2.42
Operating Interest	3.32	4.01	2.54
Misc.	0.94	0.37	0.36
Total Direct Exp.	131.94	156.48	117.32
Overhead Expenses
Custom Hire	3.48	2.01	1.09
Hired Labor	7.01	6.58	5.50
Mach. & Bldg. Leases	1.63	1.74	1.15
Farm Insurance	1.96	1.91	1.67
Utilities	1.87	2.69	1.26
Interest	4.22	7.42	3.51
Mach. & Bldg. Depreciation	10.44	10.11	11.79
Misc.	3.19	7.34	2.04
Total Overhead Expenses	33.81	39.78	28.00
Total Direct and Overhead Expenses/Acre	165.75	196.27	145.32

Understanding the Rotation Effect and Risk
Two important factors in crop selection are economics and agronomics.  You want to select crops that maximize profit potential and minimize your risk.  Dr. Michael Peel, former NDSU Small Grains Extension Agronomist, has done an excellent job of presenting the agronomics of crop rotations in NDSU Extension Bulletin EB 48 “Crop Rotations for Increased Productivity.” The bulletin is available on the web at: www.ext.nodak.edu/extpubs/plantsci/crops/eb48-1.htm .

The “rotation effect” refers to the fact that the order crops are grown effects their yield potential. Figure 1 shows the yield benefit of growing spring wheat after various crops compared to continuous spring wheat.  Table 3 shows the rotation effect with various crops.  Data in Figure 1 and Table 3 were gathered from numerous research studies.  NDSU Extension Bulletin EB 48 also contains crop rotation yield data.

Table 3. Rotation effects with various crops.

Crop	Previous Crop	Yield Effect % Inc.*
Barley	Spring Wheat	6
Barley	Soybeans	16
Barley	Flax	5
Canola	Spring Wheat	38
Canola	Barley	19
Canola	Flax	5
Corn	Soybeans	14
Soybeans	Corn	7
Sunflowers	Spring Wheat	17
Sunflowers	Sugarbeets	20
*Compared to continuous cropping with the same crop.

Figure 1.  Effect of previous crop on spring wheat yields compared to continuous spring wheat: % yield increase.

The rotation effect is not entirely understood, but many factors are thought to contribute, including disease suppression, optimized water utilization, weed and insect management, and soil fertility.  Good crop rotations reduce your production risk, while poor crop rotations increase your production risk. Good crop rotations can also help minimize risk due to environmental factors, reduce soil erosion problems, and distribute work load over the season.

Based on the results of the 2002 crop year, I am anticipating that soybean acres will increase again in the Northern Plains in 2003.  However, I am concerned about soybeans that may be planted in high risk rotations, such as soybeans following soybeans, canola, or sunflowers. Soybeans following these crops may be expected to yield an average of 5-10% less than soybeans following wheat, barley, or corn.  Of even greater concern is the increased risk of larger yield losses due to crop diseases such as sclerotinia (white mold), root rot, and the potential spread of soybean cyst nematode.  Soybeans have proven to be a very hardy crop with good disease tolerance, but farmers should know that high risk rotations result in lower and more variable yields.

Estimating Crop Profitability
One way to help you estimate potential crop profitability (and risk) is to construct price-yield scenario tables. Constructing such a table will quickly give you an understanding of what happens if price goes up or down, and/or if production goes up or down. 

Following is an example using soybeans where your best estimate of price is $4.90/bu., and yield is 30 bu./A. In this case the best guess price is the lowest price shown on the table, since it is close to the estimated support price. Profitability is calculated by subtracting expenses from gross revenue (bu./A x price/bu.). To be more accurate, your revenue estimation should include any farm program payments or other crop income you expect to receive.

Using good crop rotations means you may select a higher ‘best guess’ yield, or you may feel more comfortable looking at higher yield scenarios.

Price-Yield Scenario - Soybeans
	Best Guess Price $4.90/bu	$5.25/bu	$5.50/bu	$5.75/bu
Yield (bu/A	Gross Revenue $/A – Expenses of $150/A
20	-$52	-$45	-$40	-$35
25	-$28	-$19	-$13	-$6
Best Guess Yield
30	-$3	$8	$15	$23
35	$22	$34	$43	$51
40	$59	$73	$83	$93

Good crop selection planning will go a long way toward helping you have a profitable 2003. Good planning includes using your own expense data, using realistic yield and price estimates, using good crop rotation practices, and understanding your risk.

Field Drainage Workshop in Crookston Feb 25-27

The University of Minnesota Extension Service will hold a workshop on field drainage Feb. 25-27 at the Northland Inn, Crookston, Minn. Zach Fore, U of M extension small grains specialist, says that over the past decade, the biggest reason for poor yields in northwest Minnesota has been too much water. While surface drainage is important to managing excess water in fields, he says more farmers are realizing that subsurface or tile drainage is also important.  He points out that a number of farmers with yield monitors in areas where tile drainage has been installed are observing significant yield responses. 

More information about field drainage can be found on the Internet at www.smallgrains.org .  Under “Useful Information and Links,” click on “Tile Drainage Info for Minnesota Farmers.”  Click on the link “Calendar of Events” on the home page for more details on the drainage workshop.