As an engineer at Boeing when the calculator chip 4004 came out, I have progressed through several calculating tools. When I had a Commodore computer, I started with a VisiCalc spreadsheet program, then Quatro and lastly Excel.
I came back to farming in 1976. In 1978 my father had me start keeping the books.
One spreadsheet program I have used through the years is a simple recording of all my fields acres, production and yield by crop and year. I call it crophist. I use nine fields – year, production, acres, yield, landlord, field, crop, whom (I have three entities), and practice (crop insurance descriptor – “whtni,” wheat non irrigated). I did not track no-till versus clean till, but I probably should have.
Because of changing computers, I only have the data going back to 1993 that I use. Data goes to 1981, but the data is not complete.
I use this program to set up data tables in the what_if analysis section of excel. As an example, I set up two data tables that summed across all the farms by year and practice – one for the acres for each practice and the other for the production by practice. I then divided the second table into the first to get a table of yields. This first graph is from the table of acres. I simplified this to wheat, feed grains and oil seed and divided by the crop acres total of the farms to show percent acre mix.
The table of yields gives a very busy graph that I choose not to show here. What I did then was multiply my yields by the percent from the crop mix times prices to show the total income per acre (without crop insurance).
This showed my average income for the five years at $374.10 per acre at the March 12, 2014, price – wheat $7.20, corn $4.61, milo $4.56 and soybeans $11.34.
When I used my local cash new crop prices – wheat $5.09, corn $3.63, milo $3.53 and soybeans $8.39 – for Aug. 20, 2015, I have an income of $279.39 now. That’s a 25.3 percent drop in total income.
That is with the landlord share. I have a third – two-thirds and 40 percent / 60 percent share ground with them paying their share of expenses. I roughly estimate the landlords net 25 percent of the income after expenses. That would change my operator income to $280 on 2014 prices and $209 on 2015 prices – or a $71 per acre drop.
The total average variable costs – fertilizer, seed, herbicides, insecticides, fungicides and application – were $112.35 per acre for these five years. (This includes no-till costs and landlord’s share.)
If I subtract the variable cost from the $280 and $209, I get $167.65 and $96.65. That would be what I have for fixed costs – labor, management, machinery, repairs, etc.
That is a 42.3 percent reduction from what the 2014 prices led you to hope for. If the variable cost goes up 5 percent, that would be a 43.8 percent reduction. If the variable cost goes up 10 percent, that would be a 45.3 percent reduction. If the variable cost goes down 40 percent, that would be a 33.4 percent reduction.
Are we in a cost-price squeeze?
Steve Clanton calls himself a “has been.” He has been president of the Kansas Association of Wheat Growers; has served on the board of 21st Century Grain Processors Co-op, which is now sold; and has served on the Kansas Wheat and Kansas Soybean Commissions. Clanton also has been on the school board, NRCS board, extension board and North Central Farm Management board. He farms 3,100 acres of soybeans, milo and wheat, as well as some corn and sunflowers, in Ottawa County.