When you run the numbers, there are some surprises in the profitability of this year’s crops. Flax is more profitable than canola. And lentil returns are in the basement along with barley and oats.
Every farm has different numbers – different yields, different costs and often a different selling price. But if you use aggregate numbers, it’s possible to rank crops according to profitability.
The Saskatchewan Ministry of Agriculture publishes a Crop Planning Guide each January. It has well-reasoned costing estimates for a wide variety of cropping choices. Everything from fertilizer to land investment is included. To perform this profitability comparison, costs from the dark brown soil zone were used.
Statistics Canada recently released new crop production estimates. While yields vary from one province to another, let’s use average Saskatchewan yields since we’re using Saskatchewan expense numbers.
Crop prices vary can vary dramatically from one day to the next, but I tried to use reasonable assumptions based on information from a number of buyers and brokers.
According to Stats Can, the average yield of canola in Saskatchewan was only 25 bushels per acre this year. Assuming a price of $13.50 a bushel picked up on the farm and subtracting total rotational expenses of $268 an acre, you’re left with a return of roughly $70 an acre.
The average yield of flax in the province is estimated at 21.6 bushels per acre. Assuming a price of $14.25 a bushel and total expenses of $199 an acre, the return is $109 an acre. Although the gross return from flax is lower than canola, expenses are lower as well leading to a larger net return.
There are producers who have long claimed that they can make more money with flax than canola. This year, the numbers for Saskatchewan indicate that is indeed the case.
The big equalizer is the disappointing yield of canola. If canola yields were three or four bushels better, canola profitability would pull ahead of flax.
While canola is still one of the top crops for profitability, lentils have gone from one of the most profitable to one of the least lucrative.
Stats Can pegs average lentil yields at 1296 pounds per acre. Assuming a price of 20 cents a pound and subtracting production costs of $230 an acre leaves a return of just $29 an acre. That’s in the same bottom tier as barley and oats.
Barley yielded an average of 49.2 bushels per acre and feed barley picked up on the farm in Saskatchewan is worth about $5.20 a bushel. Some areas are higher and some lower depending upon freight costs. Meanwhile, oats averaged 76.2 bushels per acre in the province and the price assumption is $3.25 a bushel.
With costs at $231 an acre for barley and $221 an acre for oats, these crops come out with net returns of $25 to $27 an acre.
It’s interesting to note that field peas are more profitable than lentils this year. With an average yield of 28.7 bushels per acre and assuming a price of $8.25, the net return comes out at $56 an acre.
If you look at spring wheat (35.1 bushels per acre) and durum (33.9 bushels per acre) and assume a price for both of around $8.00 a bushel, the net return for durum is $41 an acre, while spring wheat is $55. That’s respectable compared to the other options.
All the crops are money makers, but net returns haven’t turned out the way most expected back in the spring.