Enterprise Budget. Tall Fescue Seed, Establishment and Production South Willamette Valley Region

Transcription

1 Enterprise Budget Tall Fescue Seed, Establishment and Production South Willamette Valley Region Tom Silberstein, Extension Agent, Marion County, Bart Eleveld, Extension Economist, Mark Mellbye, Extension Agent, Linn County, Bill Young, Extension Seed Production Specialist, Emily Lahmann, Research Assistant, Oregon State University AEB 0009, November 2010 This enterprise budget estimates the typical costs of establishing and producing tall fescue grass seed production in the northern portion of the Willamette Valley of Oregon. Straw residue is flailed twice and left in the field in this budget. While efforts were made to reflect common practices, this budget does not represent any particular farm and thus should be used only as a guide to estimating actual costs. Assistance provided by area producers is greatly appreciated. Several Willamette Valley seed, grain and forage budgets were estimated as a group and are presented in a similar, consistent format. Table 1 shows the summary returns and cost information, with inputs grouped by various categories. For perennials, this is divided into two sub-tables, A for the establishment year and B for all subsequent full production years. Table 2, again divided into A and B sections if the crop is perennial, shows itemized details about the cultural operations performed, and their costs, in a chronological sequence. Table 3 shows break-even prices and net returns around the assumed price and yield for the crop. Land and Cropping Pattern This budget is based on a farm with 1200 acres in continuous production of grass seeds or related, similar crops such as small grains, oil seeds and forage seeds. The budget estimates establishment costs on a per-acre basis. The established stand is assumed to have a life of three production years. A land lease charge of $90 per acre is included to represent the cost of leasing or owning land. Land cost varies depending on specific location and competition for production of alternate crops. Labor and Capital Hired labor typically costs approximately $16 per hour including worker s compensation, FICA, and other payroll expenses. For this study, all labor is treated as owner/operator labor valued at $16 per hour, and is assumed to be a cash cost. For mechanized operations, labor hours are calculated based on machinery hours. Opportunity costs of capital are charged at a rate of 10 percent for current and intermediate capital provided by the owner/operator. Machinery and Equipment The machinery complement is sufficient to farm 1200 production acres. Late 2010 replacement costs are used, assuming the machinery is half depreciated. Table 4 (subdivided into A, B, C and D sections) shows the cost of operating owned machinery in the cultural practices used in this and several related Willamette Valley seed, grain and forage budgets. Your machinery costs may differ. Cultural Practices The budget shows farming operations in the order they typically are performed. See Tables 2.A and 2.B, respectively, for details of operations in the establishment year and full production years, Establishment Cost Tall fescue has no harvest during the establishment year, resulting in a large, negative net return. The net return from the establishment year is amortized, with interest included, as an annual fixed cost in the full production year budget which is assumed to represent a stand life of three production years. Results Tables 1.A and 1.B show the costs and returns for establishment and production, respectively. The field operations and their costs are detailed in Tables 2.A and 2.B. The break-even price needed to cover the total cost of production is given in Table 3. The break-even price of $0.49 per pound is given at the top of the middle column. Please note that at the break-even price, returns over total costs at the assumed (100%) budget yield are zero by definition all costs would be covered. Table 3 also shows the sensitivity of returns over variable (or operating costs) and returns over total costs (net profit) as either prices or crop yields are varied. Tall Fescue Seed, South Willamette Valley Region, Page 1

2 Table 1.A Estimated costs and returns per acre Tall Fescue Establishment South Willamette Valley, 2010 ITEM UNIT PRICE QUANTITY AMOUNT YOUR FARM dollars dollars INCOME TOTAL INCOME 0.00 DIRECT EXPENSES CHEM--FERTILIZER LB lb CHEMI--OTHER Surfactant--Induce gal MISC BUS EXP Misc. business exp acre FEES, FLAT RATE Field Registration acre CUSTOM, FLAT RATE Soil Sample acre Lime ton Border Spray acre CHEM--HERBICIDE GlyphosateGAL1 gal Bronate gal CHEM--INSECTICIDE Lorsban gal SEEDS & PLANTS TF Seed lb Machinery Labor Tractors hour Self-Propelled hour Pickup hour Truck w/ Tank hour DIESEL FUEL Tractors gal Self-Propelled gal Pickup gal Truck w/ Tank gal REPAIR & MAINTENANCE Implements acre Tractors acre Self-Propelled acre Pickup mile Truck w/ Tank mile INTEREST ON OP. CAP. acre TOTAL DIRECT EXPENSES RETURNS ABOVE DIRECT EXPENSES FIXED EXPENSES Implements acre Tractors acre Self-Propelled acre Land Rent SV each Pickup each Truck w/ Tank each Mach/Equip Ins, Hi each TOTAL FIXED EXPENSES Tall Fescue Seed, South Willamette Valley Region, Page 2

3 TOTAL SPECIFIED EXPENSES RETURNS ABOVE TOTAL SPECIFIED EXPENSES Tall Fescue Seed, South Willamette Valley Region, Page 3

4 Table 1.B Estimated costs and returns per acre Tall Fescue Production South Willamette Valley, 2010 ITEM UNIT PRICE QUANTITY AMOUNT YOUR FARM dollars dollars INCOME Tall Fescue Seed lb TOTAL INCOME DIRECT EXPENSES CHEM--FERTILIZER LB lb LB lb LB lb CHEMI--OTHER Surfactant--Induce gal Apogee (PGR) lb MISC BUS EXP Misc. business exp acre FEES, FLAT RATE Seed Crop Inspection acre CUSTOM, FLAT RATE Border Spray acre CHEM--HERBICIDE AxiomLB lb Goal gal Diuron lb ,4-D gal Banvel gal CUSTOM, YIELD PROP. Seed Clean & Bag(SV) cwt CHEM--FUNGICIDE Quilt/Fungicide gal FEES, PROPORTIONAL Commission Assess TF cwt Purity and Germ TF cwt Operator Labor Self-Propelled hour Machinery Labor Tractors hour Self-Propelled hour Pickup hour Truck w/ Tank hour Harvest Truck hour DIESEL FUEL Tractors gal Self-Propelled gal Pickup gal Truck w/ Tank gal Harvest Truck gal REPAIR & MAINTENANCE Implements acre Tractors acre Self-Propelled acre Pickup mile Truck w/ Tank mile Harvest Truck mile INTEREST ON OP. CAP. acre Tall Fescue Seed, South Willamette Valley Region, Page 4

5 TOTAL DIRECT EXPENSES RETURNS ABOVE DIRECT EXPENSES FIXED EXPENSES Implements acre Tractors acre Self-Propelled acre Land Rent SV each Pickup each Truck w/ Tank each Harvest Truck each Mach/Equip Ins, Hi each AMORT. EST. COST acre TOTAL FIXED EXPENSES TOTAL SPECIFIED EXPENSES RETURNS ABOVE TOTAL SPECIFIED EXPENSES Tall Fescue Seed, South Willamette Valley Region, Page 5

6 Table 2.A Estimated resource use and costs for field operations, per acre Tall Fescue Establishment South Willamette Valley, 2010 POWER UNIT COST EQUIPMENT COST ALLOC LABOR OPERATING/DURABLE INPUT OPERATION/ SIZE/ POWER UNIT PERF TIMES TOTAL OPERATING INPUT UNIT SIZE RATE OVER MTH DIRECT FIXED DIRECT FIXED HOURS COST AMOUNT PRICE COST COST dollars dollars dollars SOIL SAMPLE 1.00 Aug Soil Sample acre PLOW 1.00 Aug Moldboard Plow 6 bottom DISK 1.00 Aug Disk HARROW & ROLL 1.00 Aug Harrow 20 ft Roller 20 ft LIME 0.20 Aug Lime ton HARROW & ROLL 1.00 Aug Harrow 20 ft Roller 20 ft SEEDLING WEED CNTRL Oct GlyphosateGAL1 gal Surfactant--Induce gal DITCHING 1.00 Oct Ditcher SEEDLING WEED CNTRL Feb GlyphosateGAL1 gal Surfactant--Induce gal PLANT 1.00 Mar Drill 13 ft TF Seed lb FERTILIZE - SPRING 1.00 Mar Fertilizer Buggy LB lb BROADLEAF WEED CNTRL 1.00 Apr Bronate gal INSECT CONTROL 1.00 Apr Lorsban gal BORDER SPRAY 1.00 Jun Border Spray acre FLAIL 1.00 Jul Flail 14 ft MISCELLANEOUS 1.00 Jul Misc. business exp acre FEES, CERT/TEST/INSP 1.00 Jul Field Registration acre Land Rent SV each 1.00 Jul Truck w/ Tank each 1.00 Jul Application 1 mile Pickup each 1.00 Jul Application 1 mile Tall Fescue Seed, South Willamette Valley Region, Page 6

7 Mach/Equip Ins, Hi each 1.00 Jul TOTALS INTEREST ON OPERATING CAPITAL UNALLOCATED LABOR 0.00 TOTAL SPECIFIED COST Tall Fescue Seed, South Willamette Valley Region, Page 7

8 Table 2.B Estimated resource use and costs for field operations, per acre Tall Fescue Production South Willamette Valley, 2010 POWER UNIT COST EQUIPMENT COST ALLOC LABOR OPERATING/DURABLE INPUT OPERATION/ SIZE/ POWER UNIT PERF TIMES TOTAL OPERATING INPUT UNIT SIZE RATE OVER MTH DIRECT FIXED DIRECT FIXED HOURS COST AMOUNT PRICE COST COST dollars dollars dollars FALL WEED CONTROL 1.00 Oct AxiomLB lb FALL WEED CONTROL 1.00 Nov Goal gal Diuron lb FALL FERTILIZER 1.00 Nov Fertilizer Buggy LB lb BROADLEAF WEED CNTRL 1.00 Jan 2,4-D gal Banvel gal Surfactant--Induce gal FERTILIZE - SPRING 1.00 Mar Fertilizer Buggy LB lb LB lb FERTILIZE - SPRING 1.00 Mar Fertilizer Buggy LB lb PLANT GROWTH REG May Apogee (PGR) lb FUNGICIDE 1.00 Jun Quilt/Fungicide gal Surfactant--Induce gal BORDER SPRAY 1.00 Jun Border Spray acre SWATH 1.00 Jul Swather 15' COMBINE 1.00 Jul Combine hp FLAIL 2.00 Jul Flail 14 ft CLEAN & BAG SEED 1.00 Jul Seed Clean & Bag(SV) cwt MISCELLANEOUS 1.00 Jul Misc. business exp acre FEES, CERT/TEST/INSP 1.00 Jul Seed Crop Inspection acre Commission Assess TF cwt Purity and Germ TF cwt Land Rent SV each 1.00 Jul Truck w/ Tank each 1.00 Jul Application 1 mile Tall Fescue Seed, South Willamette Valley Region, Page 8

9 Harvest Truck each 1.00 Jul Application 1 mile Pickup each 1.00 Jul Application 1 mile Mach/Equip Ins, Hi each 1.00 Jul AMORT. EST. COST acre Jul TOTALS INTEREST ON OPERATING CAPITAL UNALLOCATED LABOR 0.00 TOTAL SPECIFIED COST Tall Fescue Seed, South Willamette Valley Region, Page 9

10 Table 3 Breakeven price above total expenses and net returns for price/yield combinations, per acre Tall Fescue Production South Willamette Valley, BREAKEVEN PRICE Tall Fescue Seed PERCENT YIELD UNIT dollars lb -185¹ ² lb lb lb lb lb lb lb lb lb lb ¹The top number in each cell is Returns Above Direct Expenses. ²The bottom number in each cell is Returns Above Total Specified Expenses. 3 For the production years, the break even price is what is needed to recover costs during a normal number of production years. Only the product listed has been varied to calculate net returns. Tall Fescue Seed, South Willamette Valley Region, Page 10

11 Tall Fescue Seed, South Willamette Valley Region, Page 11

12 Table 4.A Tractors/Harvesters: estimated purchase price, annual use, useful life, fuel use, and direct and fixed cost per hour, 2010 Purchase Annual Useful Fuel Labor Fuel R&M Total Fixed Total Item Name Size Price Use Life Use Direct Cost dollars hours years gal/hr $/hour Tractor , Tractor , Tractor , Tractor 180 Oper , Tractor , Tractor , Tractor , Tractor , Notes: Labor: Includes allocated labor from power unit. Total Direct: Does not include interest on operating capital. Table 4.B Self-propelled machines: estimated purchase price, annual use, useful life, fuel use, performance rate, and direct and fixed cost per acre, 2010 Purchase Annual Useful Fuel Perf Labor Fuel R&M Total Fixed Total Item Name Size Price Use Life Use Rate Direct Cost dollars hours years gal/hr hr/ac $/acre ATV 20 hp 5, Combine hp 300, Combine 300 slow 300 hp 300, Fertilizer Buggy 20 35, Fertilizer Buggy 30 44, Fertilizer Buggy OB 80 35, Spray Bug100 7mph 100' 190, Spray Bug40 4mph 40' 60, Spray Bug60 10mph 60' 140, Spray Bug60 7 mph 60' 140, Spray Bug80 7 mph 80' 163, Swather 15' 62, Notes: Labor: includes allocated labor plus any additional labor from self-propelled machine. Direct: Does not include interest on operating capital. Tall Fescue Seed, South Willamette Valley Region, Page 12

13 Table 4.C Implements: estimated purchase price, annual use, useful life, performance rate, and direct and fixed cost per acre, 2010 Power Purchase Annual Useful Perf Labor Fuel ---R&M---- Total --Fixed--- Total Item Name Size Unit Price Use Life Rate Imp. P.U. Direct Imp. P.U. Cost dollars hours years hr/ac $/acre Point Blade 10 ft 140 3, Chisel Plow 21 ft , Cultimulcher 12 ft 140 7, Cultipacker 20 ft , Disk , Disk , Ditcher 140 2, Dixon Harrow MF 16 ft 180 3, Drill 13 ft , Field Cultivator 45 ft , Flail 14 ft , Flail J Knife 15 ft , Harrow 20 ft , Harrow/Cultipacker 16ft , Land Leveler 24 ft , Land Leveler MF 16 ft 140 8, Moldboard Plow 6 bottom , No-Till Drill 15 ft , Ripper 12 ft , Rol-Har/Dix/Rol 21 ft , Roller 20 ft , Roller MF 18 ft 180 8, Roller-Harrow 21 ft , Notes: Labor: Includes labor from Power unit plus additional labor from the implement. Total Direct: Does not include interest on operating capital. Table 4.D Single durable inputs: estimated purchase price, annual use, useful life, fuel consumption rate, labor, fuel, R&M, total direct, fixed and total cost per year,, 2010 Item Name Unit of Purchase Annual Useful Fuel Operation Labor Fuel R&M Total Fixed Total Measure Price Use Life Use Time Direct Cost dollars miles years gal/hr hr/mile $/yr $/yr $/yr $/yr $/yr $/yr ATV mi 4, Harvest Truck mile 30, Pickup mile 33, Truck w/ Tank mile 36, Notes: Labor: Includes allocated labor from the durable input. Total Direct: Does not include interest on operating capital. Tall Fescue Seed, South Willamette Valley Region, Page 13

14 2010 Oregon State University. This publication may be photocopied or reprinted in its entirety, without change, for noncommercial purposes. Produced and distributed in furtherance of the Acts of Congress of May 8 and June 30, Extension work is a cooperative program of Oregon State University, the U.S. Department of Agriculture, and Oregon counties. Oregon State University Extension Service offers educational programs, activities, and materials without regard to race, color, religion, sex, sexual orientation, national origin, age, marital status, disability, and disabled veteran or Vietnam-era veteran status as required by Title VI of the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, and Section 504 of the Rehabilitation Act of Oregon State University Extension Service is an Equal Opportunity Employer. Tall Fescue Seed, South Willamette Valley Region, Page 14