2014 Organic Crop Planning Guide

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1 2014 Organic Crop Planning Guide The Organic Crop Planning Guide is produced to help producers estimate their costs of producing various crops. Please remember that the Guide is an estimate and does not represent actual provincial average cost of production figures. The figures are meant to be used as a guide.

2 2014 organic soil zones assumptions The Saskatchewan Ministry of Agriculture prepares the Organic Crop Planning Guide to help producers estimate their costs of producing various crops. Please remember that the Guide is an estimate and does not represent actual provincial average cost of production figures. The figures are meant to be used as a guide. Farm managers should use their own costs of production because costs and yields on each farm differ due to the type and amount of equipment, climatic conditions, and the various agronomic practices used. A blank worksheet is provided at the end of the Guide for this purpose. A downloadable spreadsheet is also available on the Ministry website at saskatchewan.ca/agriculture (located in the Farm Management area, Production Economics, entitled Organic Crop Planner ).

3 2014 organic soil zones assumptions 1. Certified organic crop prices are based on information obtained between October 2013 and January Prices become outdated very quickly. Producers must continually adjust these figures as seeding approaches. 2. Organic certification fees are estimated at $1.50 per acre. 3. Organic crop yields are increased by 20 per cent above the long term Saskatchewan Crop Insurance Corporation (SCIC) organic area yield. Crop yields are increased to reflect higher than average management. 4. Inoculants: all acres of organic lentils, peas, alfalfa, and sweet clover are inoculated. Note that an equal value of the cost of inoculation is attributed to red clover even though at the time of writing, the availability of inoculants for red clover is uncertain. 5. No organic phosphorus, potassium or sulfur costs were applied in these budgets. 6. Fuel costs are based on diesel fuel priced at $1.05 per litre. However, recent diesel fuel prices have been very volatile and growers are encouraged to adjust this estimate accordingly. 7. Machinery repair rates are 4.5 per cent of machinery investment per year for peas, lentils and flax and 3.5 per cent for all other crops. 8. Custom work and hired labour is made up of costs for custom farm operations, such as custom trucking. Skilled labour is becoming a scarce commodity and the rate is assumed to be $21.00 per hour for Custom operations for forage harvesting, cutting and baling, and breaking are based on the Ministry of Agriculture publication 2012/2013 Farm Machinery Custom and Rental Rate Guide. 9. Crop Insurance premiums are based on the yield levels used at a coverage level of 70 per cent. 10. Utilities are made up of electricity, natural gas, water and telephone. 11. Interest on variable expenses: Operating interest is calculated on all variable expenses at 4.2 per cent for six months on all annual crops, 18 months for green manure plow-down crops, and 12 months in each year of the alfalfa rotation. 12. Building repair rates are two per cent of building investment per acre. 13. Business overhead is made up of legal, accounting, insurance, licenses and miscellaneous. 14. Machinery depreciation is calculated at 10 per cent of machinery investment per year on a straight-line basis. 15. Building depreciation is calculated at five per cent per year on a straight-line basis of building investment. 16. Machinery investment is calculated at a three per cent return on investment. It is assumed that a Brown Soil Zone farm has $156 per cultivated acre invested in machinery, a Dark Brown Soil Zone farm has $180 per cultivated acre invested in machinery, and a Black Soil Zone farm has $208 per cultivated acre invested in machinery. An additional machinery investment of $12.00 per acre is assumed for pulses. 17. Building investment cost is calculated at a three per cent return on investment. It is assumed that a Brown Soil Zone farm has $17.00 per cultivated acre invested, a Dark Brown Soil Zone farm has $22.00 per cultivated acre, and a Black Soil Zone farm has $29.00 per cultivated acre invested in buildings. 18. Land investment cost is calculated at a 3.5 per cent return on investment. It is assumed that a Brown Soil Zone farm has $575 per cultivated acre invested, a Dark Brown Soil Zone farm has $700 per cultivated acre invested, and a Black Soil Zone farm has $770 per cultivated acre invested. 19. Labour and management: These budgets do not include an estimate for owner/operator labour and management. This value varies greatly and farm managers need to determine their own actual labour and management cost.

4 Organic Brown soil zone Organic seed price and seeding rate: Rate Price Spring 1.9 bu./ac. $16.50/bu. Durum 1.9 bu./ac. $15.50/bu. Feed Barley 2.4 bu./ac. $7.50/bu. Kamut 1.9 bu./ac. $18.00/bu. Oats 2.5 bu./ac. $6.50/bu. Fall Rye 1.0 bu./ac. $10.50/bu. Brown Flax 1.0 bu./ac. $31.00/bu. Yellow Mustard 10 lbs./ac. $0.67/lb. Large Green Lentils 135 lbs./ac. $0.52/lb. Edible Yellow 3.0 bu./ac. $13.75/bu. Forage (Seed 2.0 bu./ac. $10.75/bu. Crop and Green Manure) Sweet Clover 6.0 lbs./ac. $2.00/lb Indianhead Lentil 50 lbs./ac. $0.67/lb. Alfalfa 8.0 lbs./ac. $3.25/lb. Spring Durum Feed Barley Kamut REVENUE PER ACRE Estimated Yield (bu./ac.,lb./ac., ton./ac.) (A) Estimated on Farm Market Price/bu.,lb. (B) Estimated Gross Revenue/ac (AxB)=(C) EXPENSES PER ACRE Variable Expenses/acre Seed Inoculant Machinery Operating - Fuel Repair Forage Costs - Seeding - Harvesting (Cut & Bale) - Plowdown (HD Tandem Disk) Custom Work and Hired Labour Crop Insurance Premium Fees (Certification/COR/Inspection) Utilities and Miscellaneous Interest on Variable Expenses Total Variable Expenses (D) Organ Oats Other Expenses/acre Building Repair Property Taxes Business Overhead Machinery Depreciation Building Depreciation Machinery Investment Building Investment Land Investment Total Other Expenses (E) Labour & Management (F) ** Total Expenses (D+E+F)=(G) Green Manure Plowdown Variable Expenses (H) Green Manure Plowdown Total Expenses (I) Total Rotation Expenses (G+I)=(J) *** RETURN PER ACRE Return Over Variable Expenses (C-D-H) Return Over Total Rotation Expenses (C-J) BREAK-EVEN YIELD PER ACRE To Cover Variable Expenses To Cover Total Rotation Expenses BREAK-EVEN PRICE PER BU./LB. To Cover Variable Expenses To Cover Total Rotation Expenses * The budget for alfalfa in year 1 is representative of seeding alfalfa with no cover crop. This budget needs to be ad ** These budgets do not include an estimate for owner/operator labour and management. Farm managers need *** The harvested crop budgets do not include any expenses from the previous year s green manure crop. Where which leads to the correct calculations for return per acre, break-even yield and break-even price.

5 ic Crops for Seed Fall Rye Brown Flax Yellow Mustard Large Green Lentils Yellow Forage Forage Sweet Clover Organic Green Manures Indianhead Lentil Alfalfa (harvested for forage) Year 1* Year 2 Year justed if the alfalfa was underseeded into a previous crop. to determine their own actual labor and management cost and add it to total expenses. appropriate, farm managers need to include the cost of a green manure crop (H) and (I) when calculating the total rotational expense (J),

6 Organic Dark Brown soil zone Organic seed price and seeding rate: Rate Price Spring 2.0 bu./ac. $16.50/bu. Durum 2.0 bu./ac. $15.50/bu. CPS 2.0 bu./ac. $13.50/bu. Feed Barley 2.5 bu./ac. $7.50/bu. Malt Barley 2.5 bu./ac. $8.50/bu. Oats 2.5 bu./ac. $6.50/bu. Fall Rye 1.0 bu./ac. $10.50/bu. Brown Flax 1.0 bu./ac. $31.00/bu. Yellow Mustard 10 lbs./ac. $0.67/lb. Large Green Lentils 135 lbs./ac. $0.52/lb. Edible Yellow 3.0 bu./ac. $13.75/bu. Forage (Seed 2.0 bu./ac. $10.75/bu. Crop and Green Manure) Sweet Clover 6.0 lbs./ac. $2.00/lb. Red Clover 6.0 lbs./ac. $2.15/lb. Indianhead Lentil 50 lbs./ac. $0.67/lb. Alfalfa 8.0 lbs./ac. $3.25/lb. Spring Durum CPS Feed Barley Malt Barley REVENUE PER ACRE Estimated Yield (bu./ac.,lb./ac., ton./ac.) (A) Estimated on Farm Market Price/bu.,lb. (B) Estimated Gross Revenue/ac (AxB)=(C) EXPENSES PER ACRE Variable Expenses/acre Seed Inoculant Machinery Operating - Fuel Repair Forage Costs - Seeding - Harvesting (Cut & Bale) - Plowdown (HD Tandem Disk) Custom Work and Hired Labour Crop Insurance Premium Fees (Certification/COR/Inspection) Utilities and Miscellaneous Interest on Variable Expenses Total Variable Expenses (D) Orga Other Expenses/acre Building Repair Property Taxes Business Overhead Machinery Depreciation Building Depreciation Machinery Investment Building Investment Land Investment Total Other Expenses (E) Labour & Management (F) ** Total Expenses (D+E+F)=(G) Green Manure Plowdown Variable Expenses (H) Green Manure Plowdown Total Expenses (I) Total Rotation Expenses (G+I)=(J) *** RETURN PER ACRE Return Over Variable Expenses (C-D-H) Return Over Total Rotation Expenses (C-J) BREAK-EVEN YIELD PER ACRE To Cover Variable Expenses To Cover Total Rotation Expenses BREAK-EVEN PRICE PER BU./LB. To Cover Variable Expenses To Cover Total Rotation Expenses * The budget for alfalfa in year 1 is representative of seeding alfalfa with no cover crop. This budget needs to be a ** These budgets do not include an estimate for owner/operator labour and management. Farm managers need *** The harvested crop budgets do not include any expenses from the previous year s green manure crop. Where which leads to the correct calculations for return per acre, break-even yield and break-even price.

7 nic Crops for Seed Oats Fall Rye Brown Flax Yellow Mustard Large Green Lentils Yellow Forage Forage Sweet Clover Organic Green Manures Red Clover Indianhead Lentil Alfalfa (harvested for forage) Year 1* Year 2 Year djusted if the alfalfa was underseeded into a previous crop. to determine their own actual labor and management cost and add it to total expenses. appropriate, farm managers need to include the cost of a green manure crop (H) and (I) when calculating the total rotational expense (J),

8 Organic Black soil zone Organic seed price and seeding rate: Rate Price Spring 2.0 bu./ac. $16.50/bu. CPS 2.0 bu./ac. $13.50/bu. Feed Barley 2.8 bu./ac. $7.50/bu. Malt Barley 2.8 bu./ac. $8.50/bu. Oats 3.0 bu./ac. $6.50/bu. Fall Rye 1.0 bu./ac. $10.50/bu. Brown Flax 1.0 bu./ac. $31.00/bu. Large Green Lentils 135 lbs./ac. $0.52/lb.. Edible Yellow 3.0 bu./ac. $13.75/bu. Forage (Seed 2.0 bu./ac. $10.75/bu. Crop and Green Manure) Sweet Clover 6.0 lbs./ac. $2.00/lb. Red Clover 6.0 lbs./ac. $2.15/lb. Indianhead Lentil 50 lbs./ac. $0.67/lb. Alfalfa 8.0 lbs./ac. $3.25/lb. Spring CPS Feed Barley Malt Barley Organic Crop REVENUE PER ACRE Estimated Yield (bu./ac.,lb./ac., ton./ac.) (A) Estimated on Farm Market Price/bu.,lb. (B) Estimated Gross Revenue/ac (AxB)=(C) EXPENSES PER ACRE Variable Expenses/acre Seed Inoculant Machinery Operating - Fuel Repair Forage Costs - Seeding - Harvesting (Cut & Bale) - Plowdown (HD Tandem Disk) Custom Work and Hired Labour Crop Insurance Premium Fees (Certification/COR/Inspection) Utilities and Miscellaneous Interest on Variable Expenses Total Variable Expenses (D) Oats Other Expenses/acre Building Repair Property Taxes Business Overhead Machinery Depreciation Building Depreciation Machinery Investment Building Investment Land Investment Total Other Expenses (E) Labour & Management (F) ** Total Expenses (D+E+F)=(G) Green Manure Plowdown Variable Expenses (H) Green Manure Plowdown Total Expenses (I) Total Rotation Expenses (G+I)=(J) *** RETURN PER ACRE Return Over Variable Expenses (C-D-H) Return Over Total Rotation Expenses (C-J) BREAK-EVEN YIELD PER ACRE To Cover Variable Expenses To Cover Total Rotation Expenses BREAK-EVEN PRICE PER BU./LB. To Cover Variable Expenses To Cover Total Rotation Expenses * The budget for alfalfa in year 1 is representative of seeding alfalfa with no cover crop. This budget needs to be ad ** These budgets do not include an estimate for owner/operator labour and management. Farm managers need *** The harvested crop budgets do not include any expenses from the previous year s green manure crop. Where a which leads to the correct calculations for return per acre, break-even yield and break-even price.

9 s for Seed Fall Rye Brown Flax Large Green Lentils Yellow Forage Forage Sweet Clover Red Clover Organic Green Manures Indianhead Lentil Alfalfa (harvested for forage) Year 1* Year 2 Year justed if the alfalfa was underseeded into a previous crop. to determine their own actual labor and management cost and add it to total expenses. ppropriate, farm managers need to include the cost of a green manure crop (H) and (I) when calculating the total rotational expense (J),

10 Crop Production COSTS ($/Acre) My Farm Use this Worksheet TO Adjust the Crop Budgets TO YOUR Farm COSTS Revenue Per Acre A Estimated yield (bu./ac/; lb./ac.) B Estimated on-farm market price (bu./ac.;lb./ac.) C Estimated Gross Revenue per acre Expenses Per Acre Variable Expenses per acre Seed Inoculant Forage Costs -Seeding -Harvesting (Cut & Bale) -Plowdown (HD Tractor Disk) Machinery Operating -Fuel -Repair Custom Work and Hired Labour Crop Insurance Premium Fees (Certification/COR/Inspection) Utilities and Miscellaneous Interest on Variable Expenses D Total Variable Expenses per acre Other Expenses per acre Building Repair Property Taxes Business Overhead Machinery Depreciation Building Depreciation Machinery Investment Building Investment Land Investment E Total Other Expenses F Labour and Management* G Total Expenses per acre (D+E+F) H Green Manure Plowdown Variable Expenses I Green Manure Plowdown Total Expenses J Total Rotation Expenses (G+I)** Returns Per Acre Return over Variable Expenses (C-D-H) Return over Total Rotation Expenses (C-J) Break Even Yield Per Acre (lb./ac. or bu./ac.) To Cover Variable Expenses To Cover Total Rotation Expenses Break-Even Price per BU./lb. To Cover Variable Expenses To Cover Rotational Expenses * These budgets do not include an estimate for owner/operator labour and management. Farm managers need to determine their own actual labour and management costs and add it to total expenses. ** The harvested crop budgets do not include any expenses from the previous year s green manure crop. Where appropriate, farm managers need to include the cost of a green manure crop (H) and (I) when calculating the total rotational expense (J), which leads to the correct calculations for return per acre, break-even yield and break-even price.

11 2014 Organic Crop ROTATION Worksheet There is value in looking at the effect of rotations on your long term profitability. This tool looks at the net returns per rotation acre. The example shown here is based on estimates from the Dark Brown soil zone. The actual costs and returns should be based on your own projections. Show the complete rotation from the first year to the last year. This worksheet shows both returns over total expenses and returns over variable expenses. CROP ROTATION RETURNS Example 1: Dark Brown Soil Zone Rotation 1 Rotation 2 Rotation 3 Year 1 Year 2 Crop Oats (underseeded to Sweet Clover) Sweet Clover (worked in) Return over total expenses $/acre Return over variable expenses $/acre $ $ $ $49.86 Crop Return $/acre Crop Return $/acre Crop Return $/acre Year 3 Spring $ $ Year 4 Yellow $ $ Year 5 Year 6 Total Returns $ $ Number of years in rotation 4 4 Return per rotation acre $96.74 $154.48

12 saskatchewan.ca

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