Cost of Production for Rotational CropsIn 2011, the PEI AgriAlliance received funding support from the Canada 2010 PEI Business Development Program's new Benchmarking/Risk Management component to develop cost of production benchmarks for the following crops: milling wheat, identity 2010 preserved (IP) soybeans, genetically modified (GM) soybeans, barley, canola and flax. Patrick Trainor, CA of BDO Canada conducted the analysis with input from farmers representing the Island Grain and Protein Council and the PEI Potato Board, and with key provincial crop specialists.
In preparing the analysis, PEI average yields for each crop were obtained from provincial crop insurance records (where available). The yields were combined with 2011 crop prices to obtain revenue per acre. Variable and fixed costs were determined and fine tuned through discussion with the grower representatives.
The resulting net profit or loss per acre for each crop was summarized and accompanied by worksheets for each individual crop that allow farmers to develop their own budgets for each crop and to track the actual costs and returns for his/her farm.
In working with the growers and specialists, it was agreed that the machinery operating and depreciation costs would be included in each operation; for example, the discing operation costs shown in the spreadsheet include the cost of the tractor, the discs, operator labour, fuel, repairs and depreciation. The costs were based on consensus reached with the producer representatives, rather than by assigning a particular sized tractor with a certain size disc. This approach was taken because there is a huge range of equipment types and farm scales in our province. Other assumptions such as the amount of fertilizer and lime, the type of seed used, etc. are shown in the spreadsheet.
If you would like to separate out the depreciation and include it under fixed costs in your operation, at the bottom of the summary tab you would enter the value of your machinery and buildings, the life (in years) and the total acres for which the equipment and/or buildings are being used. The spreadsheet will then calculate the depreciation as a fixed cost.
If you would like to include a value for straw sales, it can be entered under revenue. It should be noted that all cells in the spreadsheet may not apply to every farm in PEI. Our intention was to list all the potential cost items so that individuals can consider whether they apply to their farms.
We greatly appreciate the assistance of the growers who participated in this production analysis;
To use the cost of production forms, you will need to have the Excel program on your computer.
To download the forms, please follow the instructions provided on the link below.
Cost of Production for Rotational Crops MS Excel Spreadsheet download
Please note that the PEI Department of Agriculture and Forestry is not responsible for the data once it is downloaded to your computer.