Picking top crops
There are many factors to consider when selecting which crops to grow.
The graph above shows net income per acre of selected major crops enrolled in the North Dakota Farm Business Management program for the last four years. This graph excludes farms located in the Red River Valley. Direct or disaster payments are not included, as well as the cost of a producer’s labor and management. Net income set records in 2007 and 2008.
While profit, return to management and labor, risk and other financial considerations are important, there are other factors that should be considered, too, including:
• North Dakota Farm Management statistics show the top-profit crops.
• Financial factors aren’t the only ones to consider.
• Management, marketing and harvest requirements affect decisions.
• Crop rotations. Disease susceptibility, insect activity, prior chemicals used and even bird problems might be factors used in looking at an acceptable crop rotation. Required crop rotation for crop insurance availability or other factors may totally restrict the selection of a particular crop in succeeding years.
• Machinery and building requirements. These may restrict or eliminate a crop from consideration, or in some other cases encourage the selection of one crop over another because of a prior investment. There are significant differences between crops when considering the machinery and building needs of a particular crop. This might include not only grain handling and drying facilities, but also specialized harvesting, spraying and seeding equipment or facilities that an individual producer may not have or is not willing to invest significant money to buy or lease. Total machine costs — including fuel, repairs, machinery depreciation, machinery lease and custom hire, and interest on intermediate debt — may range from $30 to well over $100 per acre depending on the crop and the individual operation.
• Harvest timing. When the crop is harvested may be a factor in the type and number of acres you can handle.
• Labor. Labor needs and availability may be a deciding factor when selecting a crop.
• Government programs. Some crops may require the use of non-program base acres, or a reduction in direct payments on program acres. The Average Crop Revenue Election or other government program payments may also be a factor.
• Management. Management and experience requirements may restrict which crops a producer may feel comfortable raising.
• Marketing. Marketing system availability may also restrict the selection of some crops. This may include contract availability and delivery requirements of some crops.
Olson is a North Dakota Farm Management Program instructor at Lake Region State College, Devils Lake, N.D. Contact him at 701-662-1562 or JM.Olson@lrsc.edu.
This article published in the August, 2010 edition of DAKOTA FARMER.