|
The Northland Community and Technical College Farm Business Management Program have revised their
preliminary budgets for the 2012 crop season. These budgets do include a labor and management charge for the farmer, and all overhead expenses such as utilities, overhead farm insurance, hired labor and machinery
depreciation. The budgets listed do not include any land costs, which have become more volatile from year to year, and even from township to township.
The volatility in land expenses can cause large break-even price swings from one area to the next. Please
remember to add your individual land costs to the expenses provided.
Although farmers have begun locking in seed, fertilizer and land costs for 2012, there are still many unknowns, such as crop insurance, chemicals and fuel. Individual business decisions such as hail insurance coverage, optional versus enterprise crop insurance units and fungicide and insecticide sprays have a significant impact on the bottom line. The largest unknown remains the price received for production in 2012, and ultimately yields.
Although farmers have little control over yield prospects, there is some control with commodity price
prospects. There are nine months until harvest, and possibly even longer until sales are made, which means plenty of time for volatility in those prices, and volatility can mean higher or lower.
As always, these are very generic numbers that must be personalized for your own farming operation. Please
use these numbers as a starting point, but use your personalized data to make it more accurate.
Randy Zimmerman, Farm Business Management instructor in Ulen, MN warns farmers not to simply use last year’s data to estimate their 2012 expenses. “We have seen a steady increase in expenses from year to year, and we want to make sure farmers are using accurate and realistic numbers to generate their 2012 break even prices” says Zimmerman. An accurate cost of production estimate is the starting point for making 2012 crop sales, so Zimmerman encourages farmers to develop their own numbers, and make changes as crop input decision are made throughout the year.
|
