NDSU Offers Updated Crop Compare Program for 2021
North Dakota State University Extension 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 2021 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. Depending on the region, a broad selection of nine to 18 crops are compared. 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 ‘break-even’ prices to expected market prices to see which crop is most likely to compete with the reference crop,” says Ron Haugen, NDSU Extension farm management specialist. “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.”
The program includes an underlying assumption that fixed costs, such as machinery ownership, land, and the owner’s labor and management, do not vary among 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,” Haugen says.
“For example, there may be additional labor, management and risk associated with a competing crop,” Haugen adds. “If all the labor and management is provided by the owner-operator, it would be considered a fixed cost and could be excluded. However, the producer should add some cost if he or she would only want to produce the crop 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 higher risk.
The Crop Compare program is available online at https://www.ag.ndsu.edu/farmmanagement/tools.
K. William Boyer is the Managing Editor of the Devils Lake News Journal. He can be reached at email@example.com, or by phone at (701) 662-2127.
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