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Economics of No-Till
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Primer
Posted 5/6/2010 15:10 (#1187823)
Subject: Economics of No-Till


Radville, SK
A few weeks ago when I posted a few pictures of some hardspots we have in some of our land, I was consistently asked why we summerfallowed and tilled our land(asked isn't the right word, insulted would approach the topic better). Among other reasons, we've been trying to kill alfalfa for the past 2-3 years which is not an easy feat. That stuff just keeps coming back.

The main reason(s), however, are economics and risk management.

After talking to a few friends and neighbours, we've determined that between $120 and $140 an acre is the break even point on average. With current prices the way they are, this means we need a very good crop of Durum* or a good crop of Flax*

*Numbers for Durum and Flax
CWB PRO for 1 amber durum $5.55(-$1.50~ for rail and elevations costs) = $4.00 durum
$120.00 / $4.00 = 30 bu/ac. (Area average is 22ish) -> loss of $32.00 an acre if an average year.

Flax ~$8.00(not sure on elevation and freight costs, I'll use the same as durum which doesn't sound far off) = $6.50
$120 / $6.50 = 18.5 bu/ac (close to area average) -> congratulations, you broke even.

So that's the economics of the situation. Now the risk management.

We farm 3360 acres. at $120 per acre that means we have expenses of roughly $400,000.00 to grow crops on every acre. We're also not guaranteed a crop. There have been below average crops for many years in a row due to low rainfall, low temperature, etc. With summerfallow, we can cut the expenses roughly in half. At current prices this only makes sense for us.

I'm probably going to take some flak for this, so fire away D:
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