Barley

[cowman]

The feed market for barley is fairly ugly. Around that $2.30 mark I believe? It was close to $3 in the fall? Now I have some farm land I rent to my cousin on a crop share basis. The basic rotation is barley-barley-canola(luckily this past year it was canola!). We can grow wheat here but he refuses to grow anything he has to sell to the Wheat board and I am in total agreement with that.
In 2002 it was a totally ugly dry year and yet he still managed 80 bu./acre of Metcalf barley. He usually is pushing the 100bu/acre mark. We made green feed out of one field where the quack grass was bad.
My question is how can anyone make any money growing barley unless you get huge yields? I'm not really sure of my cousins expenses although I do know he paid over $8/bu. for treated barley seed(Bold I think) this spring. He gets his crop custom sprayed and he isn't cheap with the fertilizer. But I hear guys saying they got 40-50 bu./acre and I wonder how they do it. I doubt 40-50 bu. would pay for the fertilizer, seed, spray, fuel, crop insurance?
Now canola is a different story!

[rsomer]

My long term average barley yield is 30 bushels per acre, last 3 years have been way below that. Although we feed most of our barley I think $2.30 is nearly equivalent to $3.00 considering the change in the value of the Canadian dollar. I fertilize, spray, treat my seed, buy crop insurance, hail insurance and fuel but still can make better money per acre growing 30 bushel barley crops at $2.30 than I can raising cows and feeding calves even when times were good.

[bombay_43]

I have to wonder how much you pay for land in your area Rsomer! Some of our land cost $70,000.00 a quarter, and that was not all open! Spent a huge chunk of change clearing the remaining 40 acres.

We farm up in NE Alberta, and although last year was one of the best years we have had in the past 7, grasshoppers were unbelievable, and our averages are around the 30 bushel mark as well.

The only way we figure to make anything on barley at $2.30 a bushel, is to recycle it through the cows, and hope prices go up! A few years ago, area reps had our break even to grow barley up here at $2.00 per bushel. Fuel and fertilizer, and machinery costs have not gone down in my area!

[Horse]

I have a brother inlaw at red deer and one at ponoka they both rent thier land out at $55/ acre here where I live $30 to35 is more like ,it but closer to Edmonton 45/50 is the nonm Sure dont leave much out of 30 bu bly at 2.30 wish I was that efficent.

[rsomer]

bombay_43: Land is listed for over $80,000 a quarter for grass land but what it will actually bring is anyone's guess, less that the list price for sure.
horse: Very little land is rented out here, don't know for sure what rent would be. I believe Hutterites were paying $23 per acre northwest of here about 30 miles.

[bombay_43]

Ok, I obviously need to get way more efficient also. I do not believe that you are making any money on barley that sells for $2.30/bushel! I sat down to roughly figure out costs, and although some may be high, others are low.

Income: $2.30 x 30 bus/acre = 69.00

Outputs:

Seed Costs: App. 2 bushel x $5.00 $10.00
Fertilizer: A blend @ 125 lb./acre $16.00
Sprays: (varies) wild oats and broad leaf $18.00
Cultivation: 1 pass only $ 5.50
Seeding: $ 8.00
Combining: $15.00
Trucking: From fields to bin $00.05
Trucking: From bin to point of sale $00.15
Cost of storage in bins: $00.10

Total so far: 72.80

Already losing money! Still have not figured in initial cost of land, interest on borrowed monies, land taxes, ….

The trucking is figured in because, as you may or may not know, we lost our rail lines in North East Alberta, several years ago, and are forced now to ship grain to Vermillion, or Star, or where ever a feedlot wants it. The bin cost is based on the cost of a bin divided by bushels it holds, divided by 20 years.

If you can rent land for $23.00 an acre, 160 x $23.00 = $3680.00, so it is cheaper to rent than buy in your area. Figuring that an 80 thousand dollar loan will cost at least 5%, that is $4000.00.

No matter how you figure it, you are not making money on barley! Maybe we are only losing less money there, than other things?~!

[rsomer]

You are spending more money than would be typical of this area. If you are only averaging 30 bushels per acre you have a problem. We figure on earning about $40 per acre contribution margin but calculate the value of straw and grazing in.
It is inaccurate to say it is cheaper to rent than to buy, that is comparing apples to oranges. There is not much land rented in this area because it doesn't make much sense if you have to pay $20 per acre.
We lost our rail line in the early 1980s but avoid freight by feeding most barley on farm unless it is malt which pays enough to cover freight.
I don't think we are more efficient but farming practices in our area have evolved to work within the productive capacity of the land.
I guess it is always possible to put together numbers that show you are not making money farming. If you think you can't get by at $2.30 a bushel just wait to see how little you will be making in the next few years as the customers of the barley producer in this province continue to loose real bucks.
It is always interesting to see how the other half lives, I appreciate seeing how you calculate your costs.

[cowman]

I truly do not understand how you guys can make it with these figures. With the deal I have with my cousin I pay one third of the chemicals, get one third of the crop. And even in an ugly drought year(2002) my share came to $67/acre net. I expect my share on canola this year should be pushing $100! Cash rents around here are in that $60-80 range.
Even pasture land makes $40/acre rent.

[countryguy]

I don't know how any of you make a livin out there!! 30 bus barley? $60-80 land rent? $40 pasture rent? Those land rents are absolutely ABSURD!By the sound of it my area yields crops equal to the RD area and rents are no where near those prices.What drives people to pay those kind of rents?I'd quit before I'd pay some lazy landlord that type of money!!!!!!!!!!!!

[bulltipper]

;-D I'm a lazy landlord these days and here were I am south of Calgary, good crop land rents for $45-50/acre, average barley about 50 bu, last yr people planted early got about 80 bu. of 2 row barley and if you want to buy the land, about $950 to $1100/ acre. Believe it or not, scenic deeded ranchland brings more money.

[bulltipper]

BTW.. as of yesterday the local feedlots were paying up to 128/T for good heavy 2 row, about 2.79/bu delivered

[bombay_43]

Rsomer: I believe if you go back to my previous comment, I said that the only way we make money on our barley, is to recycle it through our cattle. That is in essence what you are saying also. We use our straw which would average only 1 round bale per acre on a 30 bushel crop, as well as our harvested fields for pasture. There really is not much pasture value left, if not for the fence lines, low areas, bush, etc.

Let’s look back a few years. Just for kicks, I dug out some old receipts from 1982.

Multi month bill: Oct 23 to Jan 25,1982, AB Power Ltd: $140.67
Nov. 23, 2003 to Dec 23, 2003, Atco Electric: $229.43

Rent on my AGT telephone bill March 04 to April 03, 1982: $6.25
Monthly local services Telus Dec 04, 2003: $33.76

Gas Alberta Bill February, 1982: $132.10
No gas bills since 1982, couldn’t afford it then, sure can’t afford it now!

To farm 270 acres of barley in 1982:
Chemicals cost $462.00
Diesel & Gas cost $842.00
56 cultivator Shovels cost $205.00

Barley sold to AWP, March 17, 1982 @$2.32/bushel

April 26, 1982:

6 Holstein steers sold EPSyard, average 986 lb at 59.85
Selling commission: $5.51/head
Brands AND Alberta Cattle Commission: $1.00/head
Hartford Insurance: .84/head

I think you are an optimist to say, “ it is always possible to put together numbers that show you are not making money farming”. These are the same words we are hearing from our politicians, I didn’t really expect to hear them from other farmers!

Up until last year, NE Alberta, had 7 years of drought. Guess what that did to crop and hail insurance averages? My premium last year was right around $9000.00. Keep in mind the Federal and Provincial match my premiums! We chose the highest coverage at 80%. I would be more than willing to open my books to you, and allow you to see that not one cent was collected in claims. At 30 bushels/acre we fell below the coverage for this area!

Without cattle, and the prices they USE to pay, barley will not make you any money. Tell me what would be typical of your area? I would appreciate seeing what your spending to produce 30 bushels per acre.

[countryguy]

Sorry if I offended anyone.When I used the term "lazy landlord" I was thinking about some of the ones that I rent from!!

[kato]

When your back is up against the wall, you really have to take a good look at how you are doing things. In 1995, when we had our last cattle price crunch, we took stock of what did and did not make money on our farm.

Grain did not make money...even compared to the cattle which were in the dumps at the time.

We only had a small amount of grain land ..a half section. The rest was hay and pasture. That half section grew us some really expensive feed.

Rather than have money invested in a mixmill, seeding equipment, replacing the tractor before it's time, owning a combine and fixing things all the time, we decided to plant it down to hay. We only left enough acres to grow some grazing corn and have a bit of summerfallow for manure. Any grain we grow now is baled for greenfeed. The cattle are fed screening pellets.

Every time we did the math on the grain, it didn't work out. Once the barley was harvested, it cost money to roll it and add the proper amount of supplements and such to make a good ration. It always seemed to work out to the same price as the pellets, only the pellets are delivered to the bin, and the barley took a lot of time and labour.

Besides, with a herd cows, a couple of hundred steers on feed, and no hired man, there just weren't enough hours in the day to do all the work. Better to use the time from mixing feed in a more productive way, like doing a better job of managing the cattle.

The only apparent advantage we saw was that there was no monthly bill from the feedmill. When you analyze it though, the bills are still there, they are just owed to the chemical, fertilizer, fuel and equipment dealers.

[rsomer]

bombay_43: You asked to see my numbers.

Revenue
Barley $69.00
Straw $8.00
Grazing $7.00
Total Revenue $84.00

Cash Expense
Seed $4.06
Seed Treat $1.15
Fert $10.82
Chem $5.82
Repairs $7.15
Fuel $6.08
Total Cash Expense $35.08

Contribution $48.92
(Revenue - Variable Cash Expense)

I have not included crop insurance or hail insurance as expense because I have also not included them as revenue. We did get hail this year and collected more insurance than we paid premiums. We took out SPE and it covered all our crop insurance premiums. We farm in Alberta in risk area 9 which has a very high premium/coverage ratio.
We had drought and grasshoppers too.