2021 cost of production irrigated potato · depreciation, and owner management costs, but do not...

2020/2021 Cost of Production

Irrigated Potato

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Date: January, 2020

This tool is available as an Excel worksheet at: or at your local is also available to helpdetermine machinery costs.

Guidelines For Estimating

Based on 780 Acres ProductionIrrigated Processing Potato Costs - 2020

The following budgets is estimates of the cost of producing processing potatoes in Manitoba. General Manitoba Agriculture and Resource Development recommendations are assumed in using fertilizers and chemical inputs. These figures provide an economic evaluation of the crops and estimated yields required to cover all costs. Costs include labour, investment, depreciation, and owner management costs, but do not necessarily represent the average cost of production in Manitoba.

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 various crops. On each farm, costs and yields differ due to soil type, climate and

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 and Resource Development Office.

The Farm Machinery Custom and Rental Rate

www.manitoba.ca/agricultureManitoba Agriculture and Resource Development office.

http://www.gov.mb.ca/agriculture/business-and-economics/financial-management/machinery-costs.html

http://www.gov.mb.ca/agriculture/business-and-economics/financial-management/cost-of-production.html

http://www.gov.mb.ca/agriculture/contact/index.html

Guidelines: Potato Production Costs 2

Manitoba Agriculture and Resource Development

A. Operating Costs Cost / Acre 325 CWT 375 CWT 425 CWT 475 CWT Your Cost1.01 Seed & cutting $306.00 $0.94 $0.82 $0.72 $0.64

Seed treatment $79.20 $0.24 $0.21 $0.19 $0.171.02 Fertilizer $321.95 $0.99 $0.86 $0.76 $0.681.03 Herbicides $52.80 $0.16 $0.14 $0.12 $0.111.04 Fungicide & Insecticide $222.00 $0.68 $0.59 $0.52 $0.471.05 Fuel Costs-Field $69.30 $0.22 $0.20 $0.19 $0.181.06 Trucking Costs $222.89 $0.61 $0.61 $0.61 $0.611.07 Irrigation Fuel $59.06 $0.18 $0.16 $0.14 $0.121.08 Maintenance & Repairs $541.39 $1.67 $1.44 $1.27 $1.141.09 Custom Work & Rental $151.00 $0.46 $0.40 $0.36 $0.321.10 Hired Labour $432.00 $1.33 $1.15 $1.02 $0.911.11 Insurance $114.11 $0.39 $0.35 $0.32 $0.291.12 Utilities $116.74 $0.36 $0.31 $0.27 $0.251.13 Other Costs $111.46 $0.34 $0.30 $0.26 $0.23Subtotal Operating Costs $2,799.90 $8.57 $7.54 $6.75 $6.121.14 Interest on Operating $70.00 $0.22 $0.19 $0.16 $0.15Total Operating Costs $2,869.90 $8.78 $7.73 $6.91 $6.27

B. Fixed Costs2.01 Own Land Cost $183.33 $0.56 $0.49 $0.43 $0.392.02 Depreciation $801.68 $2.47 $2.14 $1.89 $1.692.03 Investment $240.90 $0.74 $0.64 $0.57 $0.51Total Fixed Costs $1,225.92 $3.77 $3.27 $2.89 $2.59

C. Labour3.01 Own Labour $108.00 $0.33 $0.29 $0.25 $0.23

Total Cost of Production $4,203.82 $12.89 $11.28 $10.05 $9.09

Estimated FarmgatePrice $ per cwt $12.70 $12.70 $12.70 $12.70 $12.70Gross Yield per acre (cwt) 325 375 425 475Marketable Yield per acre (cwt) 276 319 361 404Gross Revenue / acre $3,505.20 $4,051.30 $4,584.70 $5,130.80

Marginal Returns Over Operating Costs $635.30 $1,181.40 $1,714.80 $2,260.90Over Total Costs (Net Profit) ($698.62) ($152.52) $380.88 $926.98Operating Expense Ratio 81.9% 70.8% 62.6% 55.9%

Breakeven Price Per UnitOperating Costs $10.40 $9.00 $7.95 $7.10Total Costs $15.23 $13.18 $11.64 $10.41

Breakeven Yield (Gross cwt)Operating Costs 266Total Costs 389

Return on Investment (ROI) (16.62%) (3.63%) 9.06% 22.05%Return on Assets (ROA) 0.41% 1.76% 3.09% 4.44%(Includes estimated return from annual non-potato acres in crop rotation)

Breakeven Yield Risk Ratio 83% 96% 109% 122%(Target Yield per Acre / BE Yield)

Irrigated Processing Potato Cost of Production - 2020

Profitability & Breakeven Analysis

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.

Cost /CWT (Based on Gross Yield)



Potato$ per acre Your Farm

A. Operating Costs $2,869.90B. Fixed Costs $1,225.92Total Costs $4,203.82

325 CWT 375 CWT 425 CWT 475 CWTEstimated Farmgate

Price $ per cwt $12.70 $12.70 $12.70 $12.70Marketable Yield (cwt per acre) 276 319 361 404

Up Down Up DownPercent Price Variation 5% 10% Percent Yield Variation 10% 5%

Higher Price ($ per cwt) $13.34 $13.34 $13.34 $13.34Lower Price ($ per cwt) $11.43 $11.43 $11.43 $11.43

Higher Yield (cwt per acre) 303.6 350.9 397.1 444.4Lower Yield (cwt per acre) 262.2 303.1 343.0 383.8

Higher Margin Scenario - Price Up 5% and Yield Up 10%Gross Revenue / acre $4,048.51 $4,679.25 $5,295.33 $5,926.07Marginal Returns Over Operating Costs $1,178.61 $1,809.35 $2,425.43 $3,056.18 Over Total Costs (Net Profit) ($155.31) $475.44 $1,091.51 $1,722.26Operating Expense Ratio 70.9% 61.3% 54.2% 48.4%

Lower Margin Scenario - Price Down 10% and Yield Down 5%Gross Revenue / acre $2,996.95 $3,463.86 $3,919.92 $4,386.83Marginal Returns Over Operating Costs $127.05 $593.96 $1,050.02 $1,516.94 Over Total Costs (Net Profit) ($1,206.87) ($739.95) ($283.90) $183.02Operating Expense Ratio 95.8% 82.9% 73.2% 65.4%

Risk & Sensitivity Analysis

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.

Potato - Gross Yield



Assumptions1.2.

3.

4.5.6.

Total land baseNumber of irrigation pivot circles 6Acres per circle 130Potato harvested acres (annual basis) 780Potato rotation (time in rotation - how many years) 3Total Acres 2,880Total Rented Acres 320Land Rental Per Acre (potato acres only) $250Total Owned Acres 2,560Owned Land Value Per Acre $7,500

YieldsDockage 9%Shrink 6%

Estimated Yields Low Medium Med-High HighGross Yield (cwt/acre) 325 375 425 475Acres - Percentage 0% 10% 70% 20%Marketable Yield (cwt/acre 276 319 361 404

Potato Contract PriceBase Rate ($/cwt) $12.70Bonus Rate ($/cwt) $0.00Penalty Rate ($/cwt) $0.00

Interest RateOperating 5.00%Investment 2.75%

1.01 Seed Cost & Treatment Cost Seeding Rate Total CostCost ($/cwt) (cwt/acre) Per Acre

Seed Cost $15.00 18 $270.00Cutting Cost - Custom Rate $2.00 18 $36.00Seed Treatment - Fungicide $2.40 18 $43.20Seed Treatment - Insecticide $2.00 18 $36.00

$385.20

1.02 Fertilizer CostBulk Price Rate Actual Total Cost

$/tonne Lbs/acreNutrient $/lb Per AcreNitrogen: (UAN) 28-0-0 $320 105 $0.518 $54.43Nitrogen: (urea) 46-0-0 $500 105 $0.493 $51.77Phosphate: 10-34-0 $715 65 $0.805 $52.33

Irrigated Processing Potato - Input

This budget outlines the cost of producing processing potatoes under irrigated conditions.A potato land base of 780 harvested acres was assumed in developing this budget. The crop rotation was based on growing potatoes no more than 1 in 3 years.Total gross yield per acre was estimated at 325 to 475 cwt/acre with marketable yield estimated at 276 to 404 cwt/acre.

MASC Crop Insurance, is based on 2019 rates at 80% coverage.

All trucking operations related to marketing of processed potatoes were assumed to be custom hauled to the processors. A rate applicable to hauling potatoes approximately 100 miles was assumed.

Utilities cost is based on flat rate for all yields.



Phosphate: 11-52-0 $615 45 $0.429 $19.33Potash: 0-0-60 $470 260 $0.355 $92.38Sulphur: 20.5-0-0-24 $425 45 $0.371 $16.71Other (Micro, etc.) $35.00

$321.95

Crop Pesticide CostsTimes Cost Per Total Cost

1.03 Herbicide Costs Applied Application Per AcrePreplant $3.30Post emergent $49.50

$52.801.04 Fungicide Costs & Insecticides

Contact Fungicide 11 $7.00 $77.00Systemic Fungicide 2 $21.00 $42.00Phos Acid Fungicide 3 $27.00 $81.00Insecticide 1 $22.00 $22.00

$222.00

1.05 Fuel Costs (field & trucking) Diesel Fuel Cost $/litre $0.95

Times Fuel Use Fuel Use Total CostOver Litres/Ac Imp.Gal/Ac Per Acre

Harrow 0 0.75 0.16 $0.00Rotera 1 4.60 1.01 $4.37Cultivate 1 1.29 0.28 $1.23Plant 1 1.40 0.31 $1.33Spray 3 0.42 0.09 $1.20Cultivate 1 1.74 0.38 $1.65Hilling 2 1.74 0.38 $3.31Fertilize 1 0.42 0.09 $0.40Harvest 1 8.50 1.87 $8.08Ripper 1 5.75 1.26 $5.46Tandem Disk 1 1.85 0.41 $1.76

$28.78Truck Fuel-Harvesting

Truck Capacity (cwts) 275Fuel Consumption (miles/gal) 2.5Distance to storage (miles) 15

1.06 Trucking Costs - Processor Trucking Rate ($/cwt) based on 70 miles to processor $0.96 Trucking Reimbursement ($/cwt) $0.35

1.07 Irrigation CostsInches applied 12Hours/pivot (.75" water) 72Percent of pumping - Hydro 70%Hourly pumping costs - Hydro $5.75Percent of pumping - Diesel 30%Hourly pumping costs - Diesel $8.80

1.08 Maintenance & repairs Rate Total Cost Total Cost/acMachinery 6.25% $317,656 $407Potato Storage 1.50% $84,240 $108Irrigation Equipment 1.50% $20,385 $26

Field Operation



1.09 Custom Work & Rental Number Rate/ac Total Cost/acCustom - aerial 14 $9.50 $133Custom - granular 2 $9.00 $18

1.10 Hired labour costs Hours Rate Total Cost/acLabour per acre 16 $27.00 $432Acres 780

Total $336,960

1.11 Insurance Costs Rate AcresCrop Insurance (80%) $43.32 780 $33,790Hail Insurance $0.00 780 $0Buildings & Equipment 0.25% $27,121Farm trucks (seasonal) $500 10 $5,000Farm trucks (annual) $1,000 5 $5,000Content Insurance (value of production) 0.5%Insured value of production ($/cwt) $12.70

1.12 Utilities Number Rate Months Total CostHydro $8,350 10 $83,500Phone / Cell 6 $105 12 $7,560

1.13 Other Costs Rate AcresAccounting & Legal 0 $7,000Publications & Membership $2,000Crop Consulting per acre $40 780 $31,200Property Taxes $30.00 693 $20,790Land Rental $250.00 87 $21,750Shop Supplies $2,100Miscellaneous $2,100

Depreciation (straight line):

Useful Life:Buildings 20 yearsStorage Building 20 yearsMachinery & Equipment 15 yearsIrrigation Equipment 15 years

Salvage Value (% of original cost)Buildings 5.0%Storage Building 5.0%Machinery & Equipment 15.0%Irrigation Equipment 30.0%

Land ValueOwned land 2,560 ac. @ $7,500/acre $19,200,000

Storage Facilities Size Rate/cwt312,000 $18.00 $5,616,000

Machine Shed Workshop $150,000

Capital Costs

Capital Investment

Building, climate control & loading area



Total Storage Costs $5,766,000

Irrigation System Value NumberRiver pump station $77,500 1 $77,500Booster pump station $47,000 1 $47,000Well & Pump $52,500 1 $52,500Water Reservoir $175,000 0 $0Pipeline (per 2 miles) $42,000 3 $126,000Electrical & pipeline $26,000 6 $156,000Pivots & generators $150,000 6 $900,000Total Irrigation Costs $1,359,000

Machinery & Equipment Value NumberBin piler (primary) $175,000 1 $175,000Bin piler (secondary) $35,000 1 $35,000Picking table $400,000 1 $400,000Conveyor (3'x150') $58,500 3 $175,500Dirt conveyor $23,500 1 $23,500Diggers $450,000 2 $900,000Hog $94,000 1 $94,000Skid Steer $90,000 1 $90,000Tractor (280hp) $435,000 2 $870,000Tractor (500hp) $580,000 1 $580,000Ripper $29,500 1 $29,500Roterra/hiller $60,000 1 $60,000Cultivator $29,500 1 $29,500Disc $23,500 1 $23,500Even Flow Tub $94,000 1 $94,000Tandem Truck $47,000 10 $470,000Belt Bottom Boxes $35,000 10 $350,000Planter $233,000 1 $233,000Wheel loader/telehandler $250,000 1 $250,000Windrower $200,000 1 $200,000(enter equipment here) $0 1 $0(enter equipment here) $0 1 $0(enter equipment here) $0 1 $0(enter equipment here) $0 1 $0Total Machinery Costs $5,082,500

Per Acre $6,516

Total Capital Investment $31,407,500

Labour Costs (Owner Labour and Management)Hours per acre 4Rate per hour $27.00

Return on Asset (ROA) Assumptions Total annual non-potato acres in crop rotation 2,100Estimated non-potato acres in crop rotation (per acre) - Marginal Return Over Total Costs (Net Profit) $25.00 - Land Investment Cost $91.67 - Machinery Investment Cost $13.75 - Operating Interest $6.25



1.

2.

3.

4.

5.

A. Operating Costs Your Cost

1.01 Seed & Cutting Cost Seed 18 cwt/acre

x $15.00 $/cwt= $270.00 $/acre

Cutting 18 cwt/acrex $2.00 $/cwt= $36.00 $/acre

Total = $306.00 $/acre

Treatment Cost $2.40 $/cwt fungicide

+ $2.00 $/cwt insecticidex 18 cwt/acre= $79.20 $/acre

1.02 Fertilizer Nitrogen: (UAN) 28-0-0 105 lbs/acre

x $0.518 $ / lb= $54.43 $/acre

Nitrogen: (urea) 46-0-0 105 lbs/acrex $0.493 $ / lb= $51.77 $/acre

Phosphorus: 10-34-0 65 lbs/acrex $0.805 $ / lb= $52.33 $/acre

Phosphorus: 11-52-0 45 lbs/acrex $0.429 $ / lb= $19.33 $/acre

All trucking operations related to marketing of processed potatoes were assumed to be custom hauled to the processors. A rate applicable to hauling potatoes approximately 70 miles was assumed.

Assumptions

Irrigated Potato Cost of Production Worksheet

This budget outlines the cost of producing processing potatoes under irrigated conditions and is based on a pivot system.

A potato land base of 2,880 harvested acres was assumed in developing this budget. The cost of production does not include the cost of maintaining the corners not under irrigation. The crop rotation was based on growing potatoes no more than 1 in 3 years.

Total gross yield per acre was estimated at 325 to 475 cwt/acre with marketable yield estimated at 276 to 404 cwt/acre.

MASC Crop Insurance, is based on 2019 rates at 80% coverage.



Potash 260 lbs/acrex $0.355 $ / lb= $92.38 $/acre

Sulfur 45 lbs/acrex $0.371 $ / lb= $16.71 $/acre

Micro = $35.00 $/acre


1.03 Herbicide Preplant $3.30 $/acrePost emergent $49.50 $/acre

Total $52.80 $/acre

1.04 Fungicide & InsecticideContact Fungicide 11 number applications

x $7.00 cost per application= $77.00 $/acre

Systemic Fungicide 2 number applicationsx $21.00 cost per application= $42.00 $/acre

Phos Acid Fungicide 3 number applicationsx $27.00 cost per application= $81.00 $/acre

Insecticide 1 number applicationsx $22.00 cost per application= $22.00 $/acre


1.05 Fuel Costsa) Field Fuel Costs Fuel Cost $/litre $0.95

Field Times Fuel Use Fuel Use Total CostOperation Over Litres/Ac Imp.Gal/Ac Per AcreHarrow 0 0.75 0.16 $0.00Roterra 1 4.60 1.01 $4.37Cultivate 1 1.29 0.28 $1.23Plant 1 1.40 0.31 $1.33Spray 3 0.42 0.09 $1.20Cultivate 1 1.74 0.38 $1.65Hilling 2 1.74 0.38 $3.31Fertilize 1 0.42 0.09 $0.40Harvest 1 8.50 1.87 $8.08Ripper 1 5.75 1.26 $5.46Tandem Disk 1 1.85 0.41 $1.76

$28.78

b) Truck Fuel Costs - harvest from field to storageLow Yield 325 gross yield (cwt)/ac.

= 16.25 tons/ac.



÷ 13.75 truck capacity (tons)= 1.18 trips/acrex 15 distance/trip (miles)= 17.73 total miles/acre÷ 2.5 fuel consumption (miles/gal)= 7.09 gallons required fuelx $0.95 fuel cost ($/litre) = $30.62 field to storage fuel cost+ $28.78 field fuel cost= $59.40 Fuel Costs - Field÷ 276 marketable yield (cwt)/ac.

Total = $0.2152 per cwt

Medium Yield 375 gross yield (cwt)/ac.= 18.75 tons/ac.÷ 13.75 truck capacity (tons)= 1.36 trips/acrex 15 distance/trip (miles)= 20.45 total miles/acre÷ 2.5 fuel consumption (miles/gal)= 8.18 gallons required fuelx $0.95 fuel cost ($/litre) = $35.33 field to storage fuel cost+ $28.78 field fuel cost= $64.11 Fuel Costs - Field÷ 319 marketable yield (cwt)/ac.


Med-High Yield 425 gross yield (cwt)/ac.= 21.25 tons/ac.÷ 13.75 truck capacity (tons)= 1.55 trips/acrex 15 distance/trip (miles)= 23.18 total miles/acre÷ 2.5 fuel consumption (miles/gal)= 9.27 gallons required fuelx $0.95 fuel cost ($/litre) = $40.05 field to storage fuel cost+ $28.78 field fuel cost= $68.83 Fuel Costs - Field÷ 361 marketable yield (cwt)/ac.


High Yield 475 gross yield (cwt)/ac.= 23.75 tons/ac.÷ 13.75 truck capacity (tons)= 1.73 trips/acrex 15 distance/trip (miles)= 25.91 total miles/acre÷ 2.5 fuel consumption (miles/gal)= 10.36 gallons required fuelx $0.95 fuel cost ($/litre) = $44.76 field to storage fuel cost+ $28.78 field fuel cost= $73.54 Fuel Costs - Field



÷ 404 marketable yield (cwt)/ac. Total = $0.1820 per cwt

Total Fuel Costs = $69.30 $/acre

1.06 Trucking Costs - from storage to processor (Custom haul)Low Yield 276 cwt net yield/acre

x $0.61 net trucking rate/cwt= $168.36 $/acre

Medium Yield 319 cwt net yield/acrex $0.61 net trucking rate/cwt= $194.59 $/acre

Med-High Yield 361 cwt net yield/acrex $0.61 net trucking rate/cwt= $220.21 $/acre

High Yield 404 cwt net yield/acrex $0.61 net trucking rate/cwt= $246.44 $/acre


1.07 Irrigation CostsHydro 72 hours for .75 inches

= 96 hours for 1.0 inchesx 12 inches water applied= 1152 hours pumpingx $5.75 hourly pumping costsx 4.2 number of pivots÷ 546 acres = $50.95 $/acre

Diesel 72 hours for .75 inches= 96 hours for 1.0 inchesx 12 inches water applied= 1152 hours pumpingx $8.80 hourly pumping costsx 1.8 number of pivots÷ 234 acres = $77.98 $/acre


1.08 Maintenance & Repairs$317,656 machinery

+ $84,240 potato storage+ $20,385 irrigation = $422,281 total÷ 780 acres = $541.39 $/acre harvested

1.09 Custom Work & Rental14 aerial applications

x $9.50 rate= $133.00 total per acre

2 aerial applicationsx $9.00 rate



= $18.00 total per acreTotal = $151.00 $/acre

1.10 Hired Labour Costs$16 Hours per acre

x $27.00 rate= $432.00 total per acre

1.11 Insurance$0 hail insurance

+ $33,790 crop insurance+ $5,000 farm trucks (seasonal)+ $5,000 farm trucks (annual)+ $27,121 buildings & equipment= $70,911 total insurance÷ 780 acres = $90.91 $/acre

Content insuranceLow Yield 276 gross yield (cwt)/ac.

x $12.70 Insured value of production ($/cwt)x 0.5% content insurance= $17.53 per acre÷ 276 marketable yield (cwt)/ac.


Medium Yield 319 gross yield (cwt)/ac.x $12.70 Insured value of production ($/cwt)x 0.5% content insurance= $20.26 per acre÷ 319 marketable yield (cwt)/ac.


Med-High Yield 361 gross yield (cwt)/ac.x $12.70 Insured value of production ($/cwt)x 0.5% content insurance= $22.92 per acre÷ 361 marketable yield (cwt)/ac.


High Yield 404 gross yield (cwt)/ac.x $12.70 Insured value of production ($/cwt)x 0.5% content insurance= $25.65 per acre÷ 404 marketable yield (cwt)/ac.


Total Insurance = $114.11 $/acre

1.12 Utilities$83,500 hydro

+ $7,560 telephone= $91,060 total utilities÷ 780 acres = $116.74 $/acre



1.13 Other Costs$7,000 accounting & legal

+ $2,000 membership+ $31,200 crop consulting+ $20,790 property taxes+ $21,750 land rental+ $2,100 shop supplies+ $2,100 other costs= $86,940 total other costs÷ 780 acres = $111.46 $/acre

1.14 Interest on Operating Costs(Operating interest is charged on one-half the sub-totaloperating costs)

$2,799.90 operating costs÷ 2 average= $1,399.95 average valuex 5.0% operating interest= $70.00 $/acre

Land Value Own land 2,560 ac. @ $7,500/ac $19,200,000

Storage Facilities (312,000 cwt @ $18.00 per cwt)Building & Climate Control $5,616,000 Workshop $150,000 Total Storage Costs $5,766,000

Irrigation SystemRiver pump station $77,500Booster pump station $47,000Well & Pump $52,500Water Reservoir $0Pipeline (per 2 miles) $126,000Electrical & pipeline $156,000Pivots & generators $900,000Total Irrigation Costs $1,359,000

Machinery & Equipment $5,082,500

Total Capital Investment

B. Fixed Costs

2.01 Land Costs$7,500 $/acre

x 2.75% investment ratex 88.9% potato acres - owned land

Capital Investment

$31,407,500



= $183.33 $/acre

2.02 Depreciation

Storage Facilities

$5,766,000 original value- $288,300 salvage value÷ 20 useful life (yrs.)÷ 780 total acres= $351.13 $/acre

Machinery & Equipment


Irrigation System



2.03 Investment CostOriginal Value + Salvage Value X Investment Rate

2

Storage Facilities

$5,766,000 original value+ $288,300 salvage value÷ 2 average valuex 2.8% Investment rate÷ 780 total acres= $106.73 $/acre

Machinery & Equipment

$5,082,500 original value+ $762,375 salvage value÷ 2 average valuex 2.8% Investment rate÷ 780 total acres= $103.03 $/acre

Irrigation System

$1,359,000 original value

Useful life (yrs.) Original Value - Salvage Value



+ $407,700 salvage value÷ 2 average valuex 2.8% Investment rate÷ 780 total acres= $31.14 $/acre


C. Own Labour Costs4 hours/acre

x $27.00 $/hour= $108.00 $/acre

Profitability & Breakeven Analysis:Gross Revenue = Price per unit x Yield per acre (eg. potato: $12.70/cwt x 276 marketable cwt/ac = $3,505.2/ac)

Net Profit = Gross Revenue - Total Cost (eg. potato: $3,505.2 gross revenue - $4,203.82 total cost = $-698.62 per acre)

Operating Expense Ratio = (Operating Cost / Gross Revenue) x 100 (eg. potato: $2,869.9 operating expense / $3,505 gross revenue = 81.9%)

Breakeven Price = Cost / Target Yield (eg. potato cost $4,203.82 / 276 cwt = $15.23 per cwt)

(eg. potato cost $4,203.82 / $12.70 cwt / (1 - (0.09 shrink + 0.06 dockage)) = 389.4 cwt)

Return on Assets =

January, 2020Created and maintained by For more information, contact your local Darren Bond Roy ArnottFarm Management Specialist A/Manager Farm Management

(((Potato acres: net profit + operating interest + land inv. cost + investment cost) x acres) + (Non-potato acres: net profit + operating

interest + land inv. cost + investment cost) x acres)))Total Capital Investment

(eg. 425 CWT potato: ((($380.88 net profit + $70. op. interest + $183.33 land inv. cost + $240.9 inv. cost) x 780 potato acres) + ($25. net profit + $6.25 op. interest + $91.67 land inv. cost + $13.75 inv. cost) x 2100 rotation acres))) / $31,407,500 total capital investment = 3.087% ROA

Breakeven Yield = Cost / Price per Unit

Manitoba Agriculture and Resource Development Farm ManagementManitoba Agriculture and Resource Development Office or:

mailto:[email protected]#

mailto:[email protected]#

http://www.gov.mb.ca/agriculture/business-and-economics/farm-business-management-contacts.html

http://www.gov.mb.ca/agriculture/contact/index.html

Contact us• Go to manitoba.ca/agriculture

• Toll free at 1-844-769-6224

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2021 cost of production irrigated potato · depreciation, and owner management costs, but do not...

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