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Growing winter wheat for profit

Some farmers see winter wheat as a last resort, or just a way to spread out harvest work. But according to numbers published by the Prairie provincial governments, winter wheat can be one of the most profitable crop options.

For many farmers, this comes as a surprise. Paul Thoroughgood, a Ducks Unlimited regional agrologist, says this is because “We’ve been programmed for generations to grow CWRS or CWAD.”

But, lately, the gap between winter wheat and spring wheat prices has narrowed, with winter wheat getting closer to spring wheat prices. “We’ve seen a narrowing in that spread,” Thoroughgood says.

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Winter wheat can often outyield spring wheat, Thoroughgood says. “The yield advantage more than makes up for the price disadvantage.”

Crop budget estimates released by Prairie provincial governments this past winter help to make Thoroughgood’s point.

Saskatchewan

Saskatchewan Agriculture publishes per acre cost of production estimates annually, for each soil zone. (To find the full data, go to www.agriculture.sk.ca, and search for “crop planning guide.” There is a pdf available for free download, or an Excel spreadsheet where you can insert numbers personalized for your own farm.)

Saskatchewan Agriculture’s winter wheat numbers (shown in the “special crop” section of the document) are calculated for the black soil zone. As you can see in the table, Saskatchewan Agriculture estimates a return of $162.31 per acre for winter wheat, compared with only $66.70 for spring wheat. (Canola shows up as only slightly more profitable than winter wheat, at $166 per acre.)

Of course crop price numbers will change from day to day, and production costs will be very different from year to year and farm to farm. In this table, the main difference in profitability between spring and winter wheat is the yield estimate: 58 bushels per acre for winter wheat, and only 42 bushels per acre on spring wheat. (These numbers are for stubble-seeded crops.)

Fertilizer cost estimates are higher for winter wheat, but the higher yield makes up the difference when it comes to revenues.

Manitoba

Manitoba Agriculture, Food and Rural Initiatives (MAFRI) also publishes detailed estimates of production costs and revenues. MAFRI produces estimates for both eastern and western Manitoba. This table shows only the numbers for eastern Manitoba.

To find these numbers online and learn more about all of the data sources, at www.gov.mb.ca, search for “cost of production,” then look for the “Crop production costs” for eastern or western Manitoba.

In this table, winter wheat in eastern Manitoba comes out well ahead of other options, with a per acre revenue of $233.25, as compared with $95.38 per acre for spring wheat.

Winter wheat comes out this far ahead, in spite of a lower per bushel revenue, because of the yield advantage: an estimated 71 bushels per acre as compared to 51 bushels per acre for spring wheat.

Alberta

Alberta Agriculture’s Crop Enterprise and Return Calculator operates online. You choose your soil zone, then select four crops you’d like to compare, and it generates estimated cost of production numbers.

For stubble seeded crops in the dark brown soil zone, Alberta Agriculture estimates that winter wheat will provide a contribution margin of $34.08 per acre (the contribution margin is revenue less variable expenses). Winter wheat does not look as attractive as other options based on the these numbers. Spring wheat compares at $49.32 per acre, and canola at $39.89 per acre.

In this case, the winter wheat yield used by the Alberta cost of production calculator is 36 bushels per acre, versus 33 bushels per acre for spring wheat.

Find this calculator at www.agric.gov.ab.ca. Click on “decision making tools” near the top of the page, then scroll down to “Crop Production” to find a link to the “Crop Enterprise Cost and Return Calculator.”

Paul Thoroughgood says that, for experienced winter wheat growers, these estimates for Manitoba and Saskatchewan are “not a surprise.”

As well as working for Ducks Unlimited, Thoroughgood farms near Moose Jaw, Sask. “Winter wheat’s been one of the more profitable crops on my farm,” Thoroughgood says.

“If flax looked that profitable every one of us would have been planting flax like mad.” †

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