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Agribusiness Management Series Oklahoma Canola Systems vs. Continuous Wheat Budget Comparison

The Oklahoma Canola Systems vs. Continuous Wheat Budget Comparison was developed to assist producers project returns from canola systems in comparison to continuous wheat. The program is a joint project of the Department of Agricultural Economics and the Department of Plant and Soil Sciences at Oklahoma State University. The program can be downloaded from: http://www.agecon.okstate.edu/faculty/publications.asp (Author: DeVuyst; Type: Spreadsheet).

 

The program will work best in MS Excel 2007, but will also run on MS Excel 2003, if the user has downloaded and installed conversion software from Microsoft. Some loss of functionality may be observed in MS Excel 2003. For the program to function properly, the user must allow the macro features of MS Excel. In MS Excel 2007, the user is prompted with a warning just below the button bar that macros have been disabled. Click on the warning and enable macros. In MS Excel 2003, the user must change the security level to medium or low to enable macros.

 

Table 1. Data requirements

       

Scenario name

(Yellow)

C

 

 omparison system

(Green) 

Roundup-Ready Canola-Wheat-Wheat

(Yellow)

 

Scenario name

(Yellow)

Load defaults

(Green)

Wheat defaults

(Blue)

Canola defaults

(Blue)

data requirments

 

 

 

 

 

Cells in yellow allow for user input. Cells in green or blue are either display or calculated cells. Green and blue cells are protected to prevent users from accidentally overwriting equations.

 

The top table of the program allows users to enter a description e user also specifies the canola system to be considered. Either conventional canola or Roundup-Ready of the scenario to be evaluated and the current date. These cells are optional. Thcanola systems can be analyzed.

 

The first table also allows the user to load defaults on yields, prices, and input use and prices for wheat and canola rotations. These defaults were developed by OSU canola researchers. Since these values will vary by location and producer, they should be used to guide the user in developing budgets. Location and producer specific values should be entered when available.

 

Table 2 data requirements

 

As in Table 1, user-supplied data are entered into yellow-shaded cells. The top of Table 2 requires the user to specify units of measurement for wheat (except in unusual cases, bushels) and canola (usually pounds or bushels), prices for wheat and canola, and expected yields for both crops. Note: wheat yield may vary by cropping system/rotation.

 

On left side of the middle of Table 2, inputs are listed. The cells labeled as seed, fuel, lubrication, financing and harvest costs cannot be changed. Other inputs labels can be defined by users.

 

To help organize user-entered inputs, the defaults are listed in three blocks: fertilizers, herbicides, other pesticides and crop insurance. The user must supply the purchase prices of each input. For each crop and system, the user must enter the quantity of each input entered in the left-hand column.

 

 

Interpreting results

The results on the bottom of Table 2 report “cash returns” or returns to land, labor, machinery, overhead and management. The budgets include fuel, lube, repair, harvest costs, fertilizer, herbicide, insecticide, and fungicide application. Since the same machines may be used to till and plant, unlisted machinery costs are not likely to be substantially different across systems. However, at least initially, canola will require an investment in learning how to grow the crop. This additional cost for management is not included in the canola budget. The wheat budgets are for grain-only rather than for dual-purpose wheat. To evaluate dual-purpose wheat, the budgets could be modified by adjusting the levels of wheat yield, nitrogen and seed, and including the net value of grazing.  In preliminary comparisons, a canola plus two years of dual-purpose wheat rotation generates more expected net returns than three years of continuous dual-purpose wheat.

 

Table 2.

                   
       Production System
  Revenue

Unit of mesure

Price Per unit

Continuous Wheat

           Roundup-Ready  Canola- Wheat- Wheat 

 

       

WHEAT

WHEAT

WHEAT

WHEAT

CANOLA

CANOLA

   Production   Yield Revenue Yield Revenue Yield Revenue  
  Wheat bu $5.00 40 $200.00 43 $215.00 Xxx xxx
  Canola lb $0.15 xxx xxx xxx xxx 1800 $270.00
  Gross Returns  acre   $200.00  $233.33        
   Cash Costs     Quantity  Cost  Quantity  Cost  Quantity   Cost 
  Wheat Seed bu $5.00 1 $15.00 1 $15.00 xxx  xxx
  RR Canola Seed + Fees + Treatment lb $5.25 xxx xxx xxx   xxx5  $26.25
                   
  Anhydrous Ammonia (82-0-0) lb $0.20 68 $13.60 76 $15.20 0  $ –   
  Fertilizer Application acre $12.00 1 $12.00 1 $12.00 0  $ –   
  Urea (46-0--0) lb $0.19 0  $ –    0  $ –    143 $27.17
  DAP  (18-46-0) lb $0.21 50 $10.50 50 $10.50 50 $10.50
  Sulfur (0-0-0-90S) lb $0.40 0  $ –    0  $ –    5 $2.00
  Fertilizer Application acre $4.00 1 $4.00 1 $4.00 2 $8.00
  Herbicide (broadleaf) acre $5.00 1 $5.00 1 $5.00 0  $ –   
  Herbicide (grass) acre $16.00 1 $16.00 1 $16.00 0  $ –   
  Herbicide Select® oz $0.92 0  $ –    0  $ –    0  $ –  
  Herbicide Assure II® oz $1.15 0  $ –    0  $ –    0  $ –   
  Crop Oil Concentrate Acre $1.00 0  $ –    0  $ –    0  $  –   
  Roundup PowerMax  oz $0.48 0  $ –    0  $ –    36 $17.28
  Herbicide Additive (ams) lb $0.13 0  $ –    0  $ –    2 $0.25
  Herbicide Application acre $4.00 2 $8.00 2 $8.00 2 $8.00
  Prosper FX® acre $6.00 0  $ –    0  $ –    0  $ –  
  Insecticide dimethoate pint $5.38 0.75 $4.04 0.75 $4.04 0  $ –   
  Warrior® Fall (1 of 3 yrs) oz $2.45 0  $ –   0  $ –   1 $2.45
  Insecticide (e.g. Warrior®) Spring oz $2.45 0  $ –    0  $ –    3 $7.35
  Foliar Fungicide (1 of 3 years) acre $12.50 0.33 $4.13 0.33 $4.13 0  $ –   
  Aerial Pesticide Application acre $5.00 1.33 $6.65 1.33 $6.65 1.33 $6.65
  Wheat Crop Insurance acre $6.70 1 $6.70 1 $6.70 xxx  xxx 
  Canola Crop Insurance acre $12.50 xxx  xxx  xxx  xxx  1 $12.50
                   
  Fuel  gal $2.00 4.92 $9.84 4.92 $9.84 4.92 $9.84
  Lube acre $1.48 1 $1.48 1 $1.48 1 $1.48
  Repair acre $7.12 1 $7.12 1 $7.12 1 $7.12
  Operating loan interest rate % 7.00% $62.03 $4.34 $62.83 $4.40 73.42 $5.14
  Wheat Custom Harvest & Hauling              
  Base Charge acre $16.00 1 $16.00 1 $16.00 xxx xxx
  Excess for > 20 bu/a bu $0.23 20 $4.60 23 $5.29 xxx xxx
  Hauling bu $0.23 40 $9.20 43 $9.89 xxx xxx
  Canola Custom Harvest & Hauling              
  Swathing or Pushing acre $12.00 xxx xxx xxx xxx 1 $12.00
  Combining acre $16.00 xxx xxx xxx xxx 1 $16.00
  Excess for > 20 bu/a bu $0.23 xxx xxx xxx xxx 16 $3.68
  Hauling bu $0.23 xxx xxx xxx xxx 36 $8.28
  Total "Cash" Costs acre $158.19 $161.23 $191.94        
  Net Returns to Land, Machinery Fixed Costs, Labor, Overhead and Management acre   $41.81 per acre  $61.87 per acre  Roundup-Ready Canola-Wheat-Wheat

 

 

 

Eric A. DeVuyst

Associate Professor, Farm Management and Production Management

 

Francis Epplin

Professor, Agriculture Business and Commercial Agriculture

 

Thomas F. Peeper

Professor, Weed Control, Small Grains

 

Mark C. Boyles

Assistant Extension Specialist

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