A basic question about crop economics!

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12 years 3 months ago #22270 by emma
A very good morning to you all.

I have a question which, despite searching on google (and we all know how long that takes) and talking to others, I'm still not clear about: how much does it cost, per hectare, to produce lucerne or barley etc, and what is the likely annual profit?

As you can see, I'm a newbie to all this (tho' I grew up on a farm in Scotland... um, a few years ago..) and I ask because we are looking at a property with about 8 ha of potential cropping and we need to work out whether it's feasible (its more land than we were originally considering). It has yielded barley previously and has been resown in grass and clover for grazing. The land is near Leeston, Canterbury, has sandy silt loam soil and there is available water.

Most grateful for any help or resources from you wonderfully knowledgeable folk.

Emma

PS I look forward to participating in the forum when we are finally 'up and running' wherever it may be!

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12 years 3 months ago #320939 by kate
Hi Emma and welcome to lsb :D

I'm interested in hearing the answers to your question, it's something we haven't considered but we have enough land now to consider it...

Cheers
Kate

Web Goddess

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12 years 3 months ago #320950 by debnjohn
Yes a very good question!

We have been 'sat' on 4.6 Ha of old paddock for 2 years wondering what to do with it, and have finally decided to plant lucerne.

I can tell you that our preparation costs have mounted up quite quickly as we have no heavy machinery ourselves. Similarly when it comes to harvesting we will be at the mercy of the market selling as a 'standing crop' as I don't think it is viable to invest in equipment for such a small plot.

Cheers,
John

"Common sense is the collection of prejudices acquired by age eighteen" Albert Einstein

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12 years 3 months ago #320960 by cowvet
Emma. I am on a cropping farm in canterbury so can probably give you some financial info on crop establishment.
Can you do any of it yourself - cultivation, planting, spraying (if needed), harvesting and grain storage. Or do you want it costed out on getting contractors to do everything.
Have you looked into "sharefarming" or leasing it to a nearby cropping farmer who has all the gear.


I love animals...they're delicious

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12 years 3 months ago #320991 by LongRidge
The economics of anything when farming are dependent on
- supply and demand. If you have something that everyone wants then you can be paid more for it. If you are able to irrigate your lucerne so that you can get 3 harvests per year, and if the dairy industry improves, then you are likely to make lots of money.
- soil fertility. If the fertility is correct for lucerne then you will have fewer expences than if it is not perfect. Go to Ravensdown, get the soil testing kit, get the test done then talk to the Ravensdown adviser about what you need. Because they are a co-operative they won't sell you something that you don't need.
- rainfall. Your 8 hectares will cost you upwards of $1000 per month to irrigate. The more rain then the less electricity will be needed.
- weed control is very important in a lucerne crop. How will this be done?

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12 years 3 months ago #321006 by emma

debnjohn;306609 wrote: Yes a very good question!

We have been 'sat' on 4.6 Ha of old paddock for 2 years wondering what to do with it, and have finally decided to plant lucerne.

I can tell you that our preparation costs have mounted up quite quickly as we have no heavy machinery ourselves. Similarly when it comes to harvesting we will be at the mercy of the market selling as a 'standing crop' as I don't think it is viable to invest in equipment for such a small plot.

Cheers,
John

Thanks John, yes from talking to people round here lucerne seems to be the 'crop of choice' for the moment and, once established, potentially a good earner for the next few years if things go well.... We would use a contractor, not having any of the necessary machinery, and it is these expenses that I'm interested in, and what would you get for a standing crop per hectare?
Cheers
Emma

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12 years 3 months ago #321008 by emma

cowvet;306624 wrote: Emma. I am on a cropping farm in canterbury so can probably give you some financial info on crop establishment.
Can you do any of it yourself - cultivation, planting, spraying (if needed), harvesting and grain storage. Or do you want it costed out on getting contractors to do everything.
Have you looked into "sharefarming" or leasing it to a nearby cropping farmer who has all the gear.

Hi Cowvet
Would love some financial information on crop establishment! At this early stage it would be for contractors to do the lot. Leasing it to a nearby farmer is also an option - again, what would be a good deal? The bottom line is that we would need income from this land whilst I set up other ventures. I guess it's all about cash flow in the end!
Emma

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12 years 3 months ago #321010 by emma

LongRidge;306656 wrote: The economics of anything when farming are dependent on
- supply and demand. If you have something that everyone wants then you can be paid more for it. If you are able to irrigate your lucerne so that you can get 3 harvests per year, and if the dairy industry improves, then you are likely to make lots of money.
- soil fertility. If the fertility is correct for lucerne then you will have fewer expences than if it is not perfect. Go to Ravensdown, get the soil testing kit, get the test done then talk to the Ravensdown adviser about what you need. Because they are a co-operative they won't sell you something that you don't need.
- rainfall. Your 8 hectares will cost you upwards of $1000 per month to irrigate. The more rain then the less electricity will be needed.
- weed control is very important in a lucerne crop. How will this be done?

Good evening LongRidge

Good advice, thank you, you have given me lots of homework to do!

Cheers
Emma

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12 years 3 months ago #321050 by LongRidge
If you graze someones sheep and beef, about $100 per acre with you doing the fertilising and weed control is fair value.
If you have irrigation you could get much more per acre.
Remember that if you lease your land then you have no rights to do anything on it, including/especially walking the dogs, without the permission of the lessee.

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12 years 3 months ago #321085 by debnjohn

emma;306672 wrote: Thanks John, yes from talking to people round here lucerne seems to be the 'crop of choice' for the moment and, once established, potentially a good earner for the next few years if things go well.... We would use a contractor, not having any of the necessary machinery, and it is these expenses that I'm interested in, and what would you get for a standing crop per hectare?
Cheers
Emma


Hi Emma,
Well I can't give you figures on what the crop is worth yet, as it has only been sown about 3 weeks :D
But as for establishing the ground, we have very roughly averaged about $130 per hour (plus GST as we are not registered) to get contractors in. The time taken to work your piece of land will be dependant upon distance from contractor, access, layout etc.

We originally had trees in 2 of our paddocks and we started with a soil test (did it ourselves $70 I think from PGG).

Then pull up the trees about 4 hours work
Then spray off
Then cultivate
Then fertilise (depending on lab results)
And cultivate again
And again
Then roller
Then drill. The newer seed cultivars are pretty expensive about $20 kilo plus gst and you need 15kg/Ha but I figure it's worth doing it right first time (hopefully) as the crop should last 7 years.

We've yet to roller again.
As has been said major ongoing costs are weed control and fertilising (P & K) - there is what I think is really good lucerne resource at www.luserne.org well my thoughts anyway as a novice to this stuff

If your ground is pretty good it can be a lot cheaper to spray and direct drill, but our paddocks were pretty uneven from years of orchard use.

Cheers,
John

"Common sense is the collection of prejudices acquired by age eighteen" Albert Einstein

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12 years 3 months ago #321153 by emma
Good point, and it might be really annoying having the land and not being able to walk on it... dogs would be unimpressed.

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12 years 3 months ago #321154 by emma
Really useful to see the process outlined and some of the costs involved so thank you for that, John. Got that resource too. It will be interesting to see what the end result is! I hope you are suitably rewarded for the hard labour :)
Emma

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12 years 3 months ago #321303 by LongRidge
As well as getting the stumps out, it makes it more profitable if you can get the fences out too, because these get in the way for cultivation and harvesting. Out Leeston way I guess that you have deep drains, so leave the fences alongside these.
On the stoney soil in some of the Leeston area, you will have to add in rolling the paddock just before cutting the crop, to push the stones that have risen up back down into the soil.
Contracting costs upwards of $100 per hour, so the fewer obstacles the faster the tractor can work.

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