The 2014 edition of CropChoice$ planning tool is now out. “CropChoice$ is a crop budgeting and risk management software program that’s updated every year with recent crop insurance information from AFSC (Agricultural Financial Services Corporation) and projected crop costs,” said Jason Wood, crops economist with Alberta Agriculture and Rural Development. “It allows farmers to calculate expected margins and the likelihood of achieving those results for various crop plans.”
Producers can use the software to adjust individual crop costs and evaluate the effects that different risk management strategies will have on their operation, such as adjusting crop mix, purchasing crop insurance, and renegotiating land rental agreements. It also provides probabilities for achieving margins for different cropping plans and scenarios.
“Typically, with traditional budgets you use a single estimate of yield and price, which only gives you a simple average,” said Wood. “But CropChoice$ recognizes that future crop yields and prices cannot be precisely known. Based on this it takes the revenue calculation one step further to include your own price and yield expectations. It does this by allowing you to enter high, low, and most likely price and yield values. The program then calculates the likelihood of achieving every possible profit outcome based on price and yield expectations.”
- From the Grainews website: Estimating costs of production
There is a lot of value to producers in being able to build different cropping scenarios, he said.
“The initial value comes from being able to narrow down your cropping options to find the mix of crops that gives you the highest possible profitability while maintaining agronomic stability and taking into account your own personal risk preferences,” he said. “A bonus of creating a primary crop plan is that it helps you to know what your second-best option is, and this helps with contingency planning. Once you are in the field you may not have time to evaluate last-minute options, and the key thing to note is that the wrong option can be costly.”
The software can also help producers firm up which crops to grow, he said.
“If you are still uncertain, the software provides the additional information that can help you with those selections,” said Wood. “It has up to 40 dryland and irrigated crops depending on your location. Each scenario handles up to 32 fields and you can run up to eight scenarios that directly compare and contrast the risks and returns of each crop plan. Then, based on the results, you can choose a crop plan that works for your operation.”
For more information, go to www.agric.gov.ab.ca or call 310-FARM (3276).