Provincial agriculture officials crunch a whole lot of numbers using estimated costs, forecast crop prices, and historical yields for all five soil zones — and the devil is definitely in the detail. However, break-even yields for four main crops are generally a bit lower this year, although usually by just a bushel or two, save for peas.
Below are some key numbers for each crop. Bear in mind that fixed costs, notably land expense and depreciation, vary dramatically for each soil zone, ranging from an average of $66 per acre in the Brown zone to $111 in the Grey-Wooded zone. The difference can be even more dramatic for production costs, with fertilizer requirements being a notable wild card. To get the details for these and other field crops, go to agriculture.alberta.ca.
If they get average yields for their soil zone, only producers in the Dark Brown and Grey-Wooded zone will eke out a profit — a measly one bushel over the break-even point. The Black and Brown zones are expected to be one bushel short while Peace growers would be three bushels shy of break-even given average yields for those zones.
The forecast is based on achieving 1 CRWS (11.5 per cent protein) and getting $6.53 a bushel in the Brown and Dark Brown zones, and No. 2 and $5.85 a bushel in the other three zones.
The forecast actually shows a profit in four of five zones, with only one outlier (Dark Brown zone) missing the break-even mark by a bushel. The best scenarios are the Black zone (10 bushels above break-even) and the Peace (six bushels above).
That’s all based on a price of $3.92 for No. 1 CW.
- Read more: Pulse lone bright spot in crop forecast
Despite having the highest production costs, the Black and Grey-Wooded zones look the most promising at this point. The former needs 38 bushels an acre to break even and the latter 41. Both historically average 45. In the other three zones, you have to beat the average of 25 bushels (Brown) or 30 bushels (Dark Brown and Peace) to make money.
The price forecast is $10.66 a bushel for No. 1 Argentine (save in the Peace, which is No. 1 Polish at $10 even a bushel).
A multi-year drought in India has sent pulse prices soaring and dramatically changed the break-even equation. Two years ago, it took 58 bushels an acre to turn that trick in the Grey-Wooded zone — well above the average zone yield of 50. This year, it’s forecast it will just take 42 bushels before you’re in the black. It’s the same story everywhere, with break-even forecasts anywhere from nine to 12 bushels to the good (given average historical yields).
A price of $8.44 (for No. 2 peas) was used in this forecast.