Pasture Production Costs 2017

Transcription

1 Guidelines for Estimating Pasture Production Costs 2017 in Manitoba

2

3 Guidelines For Estimating Improved & Unimproved Pasture Production Costs Date: June, 2017 This guide is designed to provide planning information and a format for calculating the costs of improved and unimproved (marginal) grass pasture for the purpose of grazing livestock in Manitoba. General Manitoba Agriculture recommendations are assumed in using fertilizers and chemical inputs. These figures provide an economic evaluation of pastures and estimated cost per head per day. Costs include operating, investment and depreciation, but do not include managmement costs, nor do they necessarily represent the average cost of production in Manitoba. Stocking rates are a critical aspect of any grazing system. This budget takes into account options to consider when calculating the stocking rate or Animal Unit Months (AUM) for your soil type and climatic conditions. These budgets may be adjusted by putting in your own figures. As a producer, you are encouraged to calculate your own costs of production for your pasture and grazing system. On each farm, costs and yields differ due to soil type, climate and agronomic practices. This tool is available as an Excel worksheet at: or at your local Manitoba Agriculture GO Office. The Farm Machinery Custom and Rental Rate Guide is also available to help determine machinery costs. Note: This budget is only a guide and is not intended as an in depth study of the cost of production of this industry. Interpretation and use of this information is the responsibility of the user. If you need help with a budget, contact your local Manitoba Agriculture GO office.

4 Guidelines: Pasture Production Costs 2 Pasture Production Cost Summary acres 160 acres lbs lbs 132 Days on Pasture 132 Days on Pasture Animal Unit - Available Per Acre AUM's - Available Per Acre for 1 month AUM's - Available Per Acre for Total Period $1,250/acre = $200,000 Total Cost $625/acre = $100,000 Total Cost Season Daily Season Daily A. Operating Costs $/Acre $/head $/head $/Acre $/head $/head Your Cost Land Development $14.02 $27.49 $0.21 $0.00 $0.00 $0.00 Fertilizer - Annual $12.94 $25.38 $0.19 $0.00 $0.00 $0.00 Herbicide $1.00 $1.96 $0.01 $1.00 $5.00 $0.04 Fence Maintenance $1.73 $3.38 $0.03 $1.38 $6.88 $0.05 Facilities Maintenance $0.50 $0.98 $0.01 $0.50 $2.50 $0.02 Land Taxes $7.00 $13.73 $0.10 $3.50 $17.50 $0.13 Miscellaneous $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Sub-total Operating Cost $37.19 $72.92 $0.55 $6.38 $31.88 $0.24 Interest on Operating $0.84 $1.64 $0.01 $0.14 $0.72 $0.01 Total Operating Costs $38.03 $74.56 $0.56 $6.52 $32.59 $0.25 B. Fixed Costs 2.0 Investment 2.01 Land $28.13 $55.16 $0.42 $14.06 $70.30 $ Facilities $1.53 $3.01 $0.02 $1.34 $6.68 $ Depreciation 3.01 Facilities $6.81 $13.36 $0.10 $5.94 $29.69 $0.22 Total Fixed Costs $36.48 $71.53 $0.54 $21.33 $ $0.81 Total Operating and Fixed $74.50 $ $1.10 $27.85 $ $1.06 C. Labour $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Total Cost of Production $74.50 $ $1.10 $27.85 $ $1.06 Cost Analysis Total Cost $11,920 (160 Acres) $4,456 (160 Acres) Total Pasture Cost Per AUM $24.51 $23.41 Note: This budget is only a guide and is not intended as an in depth study of the cost of production of this industry. Interpretation and utilization of this information is the responsibility of the user.

5 Guidelines: Pasture Production Costs 3 Pasture Input Land Base Total Acres 160 acres 160 acres Market Value (excluding fence, water, facilities) $200,000 $100,000 Market Value per acre $1, $/acre $ $/acre Carrying Capacity Carrying Capacity Number of head pastured/season 82 head 32 head Number of head pastured/acre 0.51 Hd/acre 0.20 Hd/acre Estimated average weight on pasture 1350 lbs/head 1350 lbs/head Animal Unit Value Grazing period Days 132 days 132 days Months 4.4 months 4.4 months Animal Unit Equivalent - Total Animal Unit - Available Per Acre AUM's - Available Per Acre for 1 month AUM's - Available Per Acre for Total Period Pounds liveweight per acre Total pounds on pasture 110,160 43,200

6 Guidelines: Pasture Production Costs 4 Land Development & Forage Establishment - Rental & Custom Custom Work Cost/Ac Number of Passes Total/Ac Cost/Ac Number of Passes Total/Ac Land Breaking & Tillage $ $27.30 $ $0.00 Land Clearing $ $0.00 $ $0.00 Harrowing $ $9.50 $ $0.00 Seeding $ $16.50 $ $0.00 Other - Misc. $ $0.00 $ $0.00 $53.30 $0.00 Number of Productive Years 10 years 10 years (Annual Cost Amortization) Land Development & Forage Establishment - Seed & Treatment Seeding Rate Price Cost per Acre per Unit per Acre Grass seed 10 lb $4.25 /lb $42.50 Oat greenfeed (nurse crop) 1.25 bu $7.00 /bu $ lb $0.00 /lb $0.00 Fertilizer Bulk Price Actual Nutrient Nitrogen Fertilizer Type $/tonne $/lb Usage Nitrogen: (urea) $525 $ % Nitrogen: (NH3) $775 $ % Nitrogen: (liquid) $340 $ % Phosphorus: $650 $ Potash: $400 $ Sulphur: $475 $ Amount of Actual Pounds of Elements Applied Per Acre Nitrogen Phosphorus Potash Sulphur Total lbs $/acre lbs $/acre lbs $/acre lbs $/acre $/acre Annual Production 50 $ $ $ $0.00 $25.88 Establishment (nurse crop) 50 $ $ $ $6.83 $ $ $ $ $0.00 $0.00 acres fertilized annually acres fertilized annually Custom Application - Fertilizer 80 acres 0 acres $9.00 /acre Chemicals Weed Spot Insect Total Control Spray Control Cost $/acre $/acre $/acre $/acre Annual Production $0.00 $1.00 $0.00 $1.00 Establishment (nurse crop) $14.00 $0.00 $0.00 $14.00 $0.00 $1.00 $0.00 $1.00 Custom Application - Herbicide $8.00 /acre

7 Guidelines: Pasture Production Costs 5 Maintenance & Repairs (total cost/year) Fence Maintenance (% of investment cost) 2.00 % Facilities Maintenance (% of investment cost) 1.00 % $/Acre Total $/Acre Total Maintenance & Repairs (total cost/year) Fence Maintenance $1.73 $ $1.38 $ Maintenance & Repairs $0.50 $80.00 $0.50 $80.00 Land Taxes $7.00 $/acre $3.50 $/acre Miscellaneous $0.00 $/acre $0.00 $/acre Interest on Operating 4.50 % Operating Costs Labour Costs Unmproved Pasture Total hours/season Rate per hour $20.00 $20.00 Land Development & Forage Establishment - Greenfeed Production Yield Price Value per Acre per Unit per Acre Oat greenfeed (nurse crop) 1.50 ton/acre $0.02 /lb $60.00 (establishment year only)

8 Guidelines: Pasture Production Costs 6 Investment interest rate 2.25 % Capital Costs Useful Salvage Useful Salvage Other Capital Costs Value Life Yrs Value % Value Life Yrs Value % Water Development $8, $8, Handling facilities $ $ Fence Cost $13, $11, Total Other Capital Costs $21, $19, $/Acre Total $/Acre Total Land Investment ($/acre) $1,250 $200,000 $625 $100,000 Other Capital Costs $136 $21,802 $119 $19,002 Total Capital Investment $1,250 $221,802 $625 $119,002 Land Investment 2.25% $28.13 $4,500 $14.06 $2,250 Other Capital Investment 2.25% $1.53 $ $1.34 $ Other Capital Depreciation Cost $6.81 $1, $5.94 $ Fence Costs Number of miles of Fence Improved Pasture Required Cost Per Mile of Fence Improved Unimproved Pasture Total Pasture Materials Labour Equipment Cost Un- Improved Pasture Total Cost Barbed Wire (5 strand) $3,343 $933 $1,225 $11,002 $11,002 Electric Wire (4 strand) $1,857 $542 $718 $0 $0 Electric Wire (2 strand) $1,452 $460 $663 $0 $0 Electric Wire (1 strand) $827 $240 $333 $2,800 $0 Page Wire (w/optional top wire) $7,387 $1,519 $1,913 $0 $0 Total $13,802 $11,002 For more information on fence costs, Manitoba Agriculture Livestock Fence Cost Calculator

9 Guidelines: Pasture Production Costs 7 Land Development Costs: Includes: (eg. ($53.30 custom land preparation + $42.50 grass seed + $8.75 oat nurse crop seed + $64.66 est. fertilizer + $9.00 custom fertilizer applic. + $14.00 est. herbicide + $8.00 custom herbicide applic. - $60.00 greenfeed forage value) / 10 productive years = $14.02 cost per acre annually) Fence Maintenace Costs: Assumes 2% of fence value for annual maintenance & repair. (eg. ($13,802 total fence cost x 2% annual repair cost) / 160 pasture acres = $1.73 cost per acre) Facilities Maintenace Costs: Assumes 1% of other capital costs for annual maintenance & repair. (eg. ($8,000 total facilites cost x 1% annual repair cost) / 160 pasture acres = $0.50 cost per acre) Miscellaneous Costs: Includes overhead expenses: hydro, telephone, accounting, supplies and insurance, etc. Land Taxes: The average for the province was based on land tax assessment and mill rates of a sample of municipalities with pasture less provincial tax rebate. Interest On Operating: Interest charges on operating costs are calculated at 4.5% for six months. Land Investment Cost: Land values are based on appoximate average land values in Manitoba. Budget assumed 2.25% return on land investment (eg. ($200,000 pasture land value x 2.25% investment rate) / 160 pasture acres = $28.13 cost per acre) Other Capital Investment Cost: (eg. ((($21,802 original cost + $0.00 salvage value) / 2) x 2.25% investment rate) / 160 pasture acres = $1.53 cost per acre) Other Capital Depreciation Cost: (eg. (($21,802 original cost - $0.00 salvage value) / 20 years uselife life) / 160 pasture acres = $6.81 cost per acre) Grazing Formulas: Animal Unit Equivalent (Total) = 82 head x (1350lbs/hd / 1000lbs/Animal Unit) x 4.4 months = 487 AUM's (Available Per Acre for Total Period) = 2.25 AUM (1 month) / 4.4 months = 0.51 Total Pasture Cost Per AU = $74.50 cost per acre / 3.04 AU (Per Acre) = $24.51 Created and maintained by Manitoba Agriculture Farm Management June, 2017 For more information, contact your local Manitoba Agriculture GO Office or: Roy Arnott Farm Management Specialist Other Assumptions Animal Units (AU - Available Per Acre) = 487 AU Equivalent (Total) / 160 acres = 3.04 AUM's (Available Per Acre for 1 month) = 3.04 AU (Per Acre) / 1.35 AUM per cow calf pair = 2.25 Benjamin Hamm Farm Management Specialist

10 Guidelines: Pasture Production Costs 8 Calculating Pasture Capacity - Number of Head Pastured Example Your Farm 1. Animal Unit Month Available per acre* 3.0 (see table; soil group 3 veg assoc. 11) 2. Animal Unit Equivalents** 1.35 (Average weight of animals 1000 lbs) 3. AUM's available per acre for I month 2.25 (1 2) 4. Grazing period in months AUM's available per acre for total period 0.51 (3 4) 6. Total Acres in Pasture Carrying Capacity of Pasture (# of Head) 82 (5 x 6) * One Animal Unit Month (AUM) is defined as a 1000 lb beef cow, with or without a nursing calf, with a daily requirement of 26 lbs dry matter forage. Therefore 1 AUM is equal to 780 lbs of dry matter forage. ** If calculating requirements for livestock other than a 1000 lb cow divide weight of animal by 1000 lbs to determine animal unit equivalent. In the example above 1350 was divided by 1000 to calculate the animal unit equivalent.

11 Guidelines: Pasture Production Costs 9 Bush Meadow Improved Annual Animal Unit Month (AUM) Available per Acre Carrying Capacity (based on 160 acres, 1350 lb animals for 132 days Carrying Capacity (based on 160 acres, 1350 lb animals for 132 days Soil Groups Soil Groups Soil Groups Vegetative Associations Light Medium Heavy Light Medium Heavy Light Medium Heavy Woodland Open woodland Harvested woodland Boreal forest Upland grass Transitional grassland Lowland meadow Hay regrowth Poor tame forage Fair tame forage Good tame forage Annual crop land Crop stubble Fall seeded cereal Source Manitoba Crown Lands Estimated Carrying Capacity: Pick the soil group and vegetative association (from the table above) that most closely represents your land.

12 For more information Contact your local Manitoba Agriculture Office. Visit us at manitoba.ca/agriculture. ESR December 2017