Client Corner: What types of enterprise budgets are available?

Contributed by Craig Chase, ISU Extension Farm Management Field Specialist

I’ve just glanced through your Vegetable Production Worksheets and wanted to know if info is available on the type and/or quantity of fertilizer assumed for each crop and also the quantity of fuel used for each crop.

I also see that these enterprise budgets were based on “small farm” production activities. Are there enterprise budgets available for larger-scale farming and livestock production?

Craig Chase

The vegetable budgets reflect 2-5 acres in production with a wide variety of crops grown.  The fertilizers used are primarily organic; alfalfa meal, worm castings, compost in relatively small quantities, etc.  Rarely are there any commercial fertilizer N-P-K products used.

Most of the labor is conducted by hand, with the exception of the primary tillage which is done by a large garden tiller.   There are other universities that have large scale vegetable production budgets; California, Michigan, and others.  AgDM File A1-25 lists a number of resources where you should find some of the large-farm budgets.

If you are looking for more conventional crop budgets (corn, soybean, etc.), we do have some of those that would outline the level of fertility and the field operations that would be conducted.  A separate publication would be able to estimate fuel usage for those operations.
For this information, you could use  Agricultural Decision Maker (AgDM) files A1-20 “Estimated Costs of Crop Production in Iowa – 2010” and A3-27 “Fuel Required for Field Operations“.
The organic row-crop budgets use only composted manure for fertility along with alfalfa in the rotation. Keep in mind the tractor and implement set is usually smaller in an organic system so the fuel usage is likely to be less than its conventional counterpart.

There are several livestock budgets located on the AgDM site as well.  Information file B1-21 would outline the detail of those budgets.

Why consider a basis contract?

Contributed by Steve Johnson, retired Extension Farm Management Field Specialist

johnsonsteve_2008_1in_72Corn quality concerns are great for a large number of 2009 bushels being stored on-farm. Bins need to be leveled to improve air flow and reduce crusting. The centers of the grain bins should be cored where cracked kernels and foreign material likely concentrate. If there is concern for corn that will not store beyond mid-March on-farm, consider moving that corn early to mid-winter rather than waiting until spring.  By mid-March, many of the piles of corn stored covered and uncovered in the Western Cornbelt will need to be processed or dried.

Five Reasons to Consider a Basis Contract

Here are a few reasons to move on-farm stored corn sooner than later this winter.

1) High moisture levels and lack of air flow in grain bins will not allow that corn to store into the spring months.

2) The discounts for foreign material (FM) were increased by many processors since early November, anticipating the challenge that lies ahead for maintaining corn quality.

3) Corn basis will likely widen into late winter as farmers need to generate cash and corn movement increases.

4) The excessive fall moisture could leave many gravel roads difficult to navigate once the frost leaves.

5) A basis contract fixes the basis and eliminates storage costs, but allows the producer to benefit from higher futures price.

Storing the 2009 corn crop on-farm will likely be a bigger challenge than in recent years. Waiting for a spring price rally carries with it the risk of holding corn that could go out of condition. Facing the potential for an abnormally wide basis late winter brings an additional risk.

A basis contract allows a producer to move corn in early to mid-winter and eliminate the cost of storage and basis risk, yet provide cash flow. A basis contract is a marketing tool that most producers have available to them. Consider how to use the tool this winter to reduce risk and hopefully increase revenue from your 2009 corn crop.

For more on grain marketing, visit the Crop-Marketing section on the Ag Decision Maker website.

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