{"id":261416,"date":"2025-05-28T09:09:40","date_gmt":"2025-05-28T09:09:40","guid":{"rendered":"https:\/\/peraltafinancing.com\/agriculture\/the-crop-plan-vs-the-payout\/"},"modified":"2025-05-28T09:09:40","modified_gmt":"2025-05-28T09:09:40","slug":"the-crop-plan-vs-the-payout","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=261416","title":{"rendered":"The Crop Plan Vs The Payout"},"content":{"rendered":"


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When it comes to planning crop production for the year, producers rely on a mix of resources, including crop guides, crop planners, future contract prices, and a whole host of other inputs. But one thing farmers cannot plan for is the end-of-season return over total expenses, aka profits<\/strong><\/em>.<\/p>\n

Crop production is unpredictable for several reasons. You could have bad weather, which wipes out part of your crop, stunted growth, unexpected machinery costs, possibly tariffs on your chemical mid-season, or prices just not being what you had hoped. Planning and projections are useful, but until harvest, there is no way to know what is in the bin- or what it is worth.<\/p>\n

Planning for the 2024 crop Year<\/h2>\n

To illustrate just how uncertain and how much risk<\/a> producers take on, let\u2019s use the very useful and reliable Saskatchewan Crop Planning Guides Online Calculator for 2024<\/a> to see the financial impact that yield alone could have on a farm, like Chelsea<\/a> did when she crunched the numbers of farm startup costs<\/a>.<\/p>\n

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\"CropFor this example, let us look at my childhood- RM 164,\u00a0 Chaplin, SK, \u00a0in the South West (SW) Region<\/a>, Census Division 7. The area has brown soil<\/a>, unlike the preferred dark brown soil to the east.<\/p>\n

Let\u2019s assume a farm slightly larger than the average Saskatchewan farm<\/a>, three full sections of land totalling 1920 acres, with less than\u00a0 5% unsuitable for seeding. All arable land will be seeded. South West Saskatchewan does not offer ideal or preferable growing conditions for any of the crops listed in the Crop Planning Guide in Saskatchewan, especially canola.<\/p>\n

Still, \u00a02024\u2019s future prices for canola were strong, making it a profitable crop despite its lower yield in this region. So I dedicate 625 acres to canola.<\/p>\n

Originally, I had considered oats, but looking at the planner\u2019s brown soil zone, I noticed that the breakeven for yield was not likely attainable. The crop planner estimated the area would need a breakeven yield of 60.87 bu\/ac, but the estimated yield for brown soil in 2024 was only 53.82 bu\/ac. Knowing that my estimated yield was projected as less than my breakeven, and my return over total expenses would be -$37.03\/acre, oats were too risky. Instead, I went with crops whose breakeven yield didn\u2019t exceed projected yields, splitting the remaining acres into 610 of durum and 620 acres of large green lentils.<\/p>\n

Calculating expenses<\/h2>\n

The Crop Planning Guides Calculator works by letting producers input both estimated revenues and expenses. For revenues, you enter acres seeded, estimated yield (which we will cover later), and the estimated on-farm market price, which I took straight from the calculator since I didn\u2019t have a contract lined up for selling any of these crops.<\/p>\n

Then there are the expenses, calculated on a per-acre basis. Since I am not a farmer in real life, I stuck with the suggested agronomic inputs for each crop across Saskatchewan\u2019s soil zones to represent the variable expenses, as seen in Table 1<\/em>. Each crop\u2019s variable expenses varied:<\/p>\n