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Stark-Billings County |
Extension Spotlites
January 22, 2009
NDSU Offers Tool to Assist in Crop Selection
The program uses the direct costs and yields from the 2009 projected crop budgets for nine regions of North Dakota.
The North Dakota State University Extension Service has updated the Crop Compare program, which is a spreadsheet designed to compare cropping alternatives.
The program uses the direct costs and yields from the 2009 projected crop budgets for nine regions of North Dakota, but producers are encouraged to enter the expected yields and input costs for their farm.
The user designates a reference crop and enters its expected market price. The program provides the prices for competing crops that would be necessary to provide the same return over variable costs as the reference crop.
Producers can compare these “breakeven” prices to expected market prices to see which crop is most likely to compete with the reference crop. Input costs and grain prices can move quickly. The program provides a tool for producers to check the changing scenarios until final planting decisions are made this spring.
It should be noted that an underlying assumption is that fixed costs, such as machinery ownership, land, and owner’s labor and management, do not vary between crop choices and therefore do not need to be included in the analysis.
In practice, there may be differences in fixed costs that should be considered. For example, there may be additional labor, management and risk associated with a competing crop. If the owner-operator provides all the labor and management, it would be considered a fixed cost and could be excluded. However, the producer should add some cost if he or she would want to produce the crop only when an adequate reward would be received for the extra time and management required relative to the reference crop.
A similar rationale could be used if a competing crop is considered a higher risk.
For more information contact:
Kurt Froelich,
Extension Agent
NDSU Extension Service
Stark-Billings County
1340 W. Villard St.
Dickinson ND 58601-4646
(701) 456-7665