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NDSU Extension Updates Its Crop Compare Program

Monday, February 5, 2018
filed under: Research and Development

       The North Dakota State University Extension Service has updated the Crop Compare program, which is a spreadsheet designed to compare cropping alternatives. The program provides a tool for producers to gauge the changing scenarios until final planting decisions are made this spring.
       The Crop Compare program uses the direct costs and yields from 2018 projected crop budgets for nine (9) regions of North Dakota; but producers are encouraged to enter expected yields and input costs for their own farm.
       The user designates a reference crop and then enters its expected market price. Depending on the region, a broad selection of nine to 18 crops are compared. (Both oil and confection sunflower are included in most of the regions; oils are not part of the East Central region, while confection sunflower is not included for the Northwest region.)  The program lists 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,” explains Andy Swenson, NDSU Extension Service 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.”
       An underlying assumption in the Crop Compare program is that fixed costs (e.g., machinery ownership, land and the owner’s labor and management) do not vary among crop choices and thus do not need to be included in the analysis.
       “In practice, there may be differences in fixed costs that should be considered,” Swenson allows.  “For example, there may be additional labor, management and risk associated with a competing crop.  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 NDSU Extension Crop Compare program is available here.
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