Economics and market outlook for 2019 grain and brassica crops
Figure 1: Estimated 2019 net returns over total costs for northern Idaho crops.
Figure 2: Scientists at NASA’s Goddard Space Flight Center generate groundwater and soil moisture drought indicators each week based on satellite data. The drought indicators describe current wet or dry conditions, expressed as a percentile, with lower values (warm colors) meaning dryer than normal, and higher values (blues) meaning wetter than normal.
Table 1. 2019 crop yield and price estimates for northern Idaho.
| February 28, 2019 12:00 AM
BONNERS FERRY — At this point in time, wheat appears to be the only profitable annual crop for this region when considering market costs for all factors of production, including land. Given the surplus of garbanzos worldwide, plus tariffs and quotas imposed by India, the price is not expected to rise significantly from its current level, $0.18 per pound, approximately half of last year’s price. Peas and lentils are also impacted by tariffs imposed by China, which may or may not remain in effect.
The surplus of wheat stocks has diminished somewhat, and less is planted worldwide and the dollar has lost some of its value. Both of these factors help put upward pressure on wheat prices. Canola prices remain steady, thus making this crop relatively more favorable for a rotational crop with net returns over total costs estimated at $ -44 per acre (Fig. 1), assuming an 1800 per acre yield and a farmgate price of $0.16 per lb (Table 1). Please note that these are conservative average yield numbers for Boundary County. Many producers will have higher yields than the assumptions used for this study.
Net returns over total costs for winter wheat (WW) are predicted to be $32 per acre, assuming a yield of 90 bu per acre and a price of $5.50 per bu. Returns for soft white spring wheat (SWSW) are predicted to be -$1 per acre, with a price assumption of $5.50 per bu and a yield assumption of 65 bu per acre. Price projections for hard red spring wheat are less than the usual differential, with a net farmgate price estimate of $6 per bu, resulting in a predicted loss of -$8 per acre. Net returns over total costs for spring barley are estimated at -$53 per acre, assuming a 1.8 ton per acre yield and a net price to the farmer of $125 per ton. For those growers with food barley contracts, however, barley is a much more lucrative crop (see Food Barley article).
An option to grow a soil-enhancing, nitrogen-fixing, or grazable cover crop might be of interest as a rotational crop. While growers will incur some costs for seeding and initial weed control, in some cases the benefits of increased organic matter, reduced labor and harvest expenses, nitrogen fixing or grazing might make this rotational option of interest. A detailed spreadsheet with cost and returns for each crop as well as several cover crop recommendations is available in a digital format upon request and also at this blog post, https://tinyurl.com/2019IdahoOutlook. The complete document is available at boundaryagblog.wordpress.com.
In terms of 2019 growing conditions, producers here need to be aware of the lack of moisture and plan accordingly. The following tool, available at https://nasagrace.unl.edu/, allows you to check on groundwater as well as surface soil and root zone soil moisture conditions. At this point, droughty conditions are indicated for our region (see Figure 2).
Given these droughty conditions, spring crops are less likely to fare well. Pastures will suffer as well. We have just finished producing a case study of a producer in Nez Perce who grows cover crops for grazing during the time when his grass pastures dry up. Experimenting with annual cover crops has benefited both his cattle operation and his cropping operation. You can learn more about his experience on YouTube at this link: https://youtu.be/rD5fhEEFHiU, or search Grazed Cover Cropping--Drew Leitch. Costs for producing a cover crop are included in the budget spreadsheets available at the blog below, or email me directly: kpainter@uidaho.edu. I welcome your feedback!
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