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NDSU Offers Updated Crop Compare Program for 2019

North Dakota State University Extension has updated the Crop Compare program,
which is a spreadsheet designed to compare cropping alternatives.

The program provides a tool for producers to check the changing scenarios until
final planting decisions are made in the spring of 2019.

It uses the direct costs and yields from the 2019 projected crop budgets for
nine regions of North Dakota, but producers are encouraged to enter the expected
yields and input costs for their farm.

The user designates a reference crop and enters its expected market price.
Depending on the region, a broad selection of nine to 18 crops are compared. The
program provides the prices for competing crops that would be necessary to
provide the same return over variable costs as the reference crop.

“Producers can compare these ‘break-even’ prices to expected market prices to
see which crop is most likely to compete with the reference crop,” says Andy
Swenson, NDSU Extension farm management specialist. “Grain prices can move
quickly. The program provides a tool for producers to check the changing
scenarios until final planting decisions are made this spring.”

Producers should note that an underlying assumption is that fixed costs, such as
machinery ownership, land, and the owner’s labor and management, do not vary
among crop choices and therefore do not need to be included in the analysis.

“In practice, there may be differences in fixed costs that should be
considered,” Swenson says. “For example, there may be additional labor,
management and risk associated with a competing crop.

“If all the labor and management is provided by the owner-operator, it would be
considered a fixed cost and could be excluded,” he adds. “However, the producer
should add some cost if he or she would only want to produce the crop when an
adequate reward would be received for the extra time and management required
relative to the reference crop.”

A similar rationale could be used if a competing crop is considered higher risk.

The Crop Compare program is available online at
https://www.ag.ndsu.edu/farmmanagement/tools.

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