NDSU offers updated Crop Compare program for 2013
The NDSU Extension Service has updated the Crop Compare program, a spreadsheet designed to compare cropping alternatives.
The program uses direct costs and yields from the 2013 projected crop budgets for nine regions of North Dakota, but producers are encouraged to enter 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 is 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," said Andy Swenson, NDSU Extension Service farm management specialist. "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 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," Swenson said. "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 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.
NDSU is recognized as one of the nation's top 108 public and private universities by the Carnegie Commission on Higher Education.