This past year, 2023, was the most expensive year ever for growers. Due to high input costs—especially fertilizer—and steadily rising equipment costs, a lot is riding on spring seeding going well.
The dry winter we’re having complicates things even further. The Hydrologic Forecast Centre recently published the February Flood Outlook Report, showing a low-to-moderate risk of spring flooding across Manitoba, and soil moisture levels are normal to below normal. While some may be rejoicing that flood risk is low, a lack of snow cover on fields can be bad news for growers for several reasons.
Charles (Chuck) Fossay has been farming for 50 years and is currently a director with the Manitoba Canola Growers and the Canola Council of Canada. Fossay and his brothers grow grains and oil seeds north of Starbuck, Manitoba.
Fossay says that the arrival of late snow in March through April would help fill irrigation ponds and even recharge the soil, but would likely not be enough to save winter wheat and fall rye.
“Talking to some of the local agronomists, they feel that those winter crops are probably not surviving this winter.”
Fossay adds that he believes there’s likely enough topsoil moisture right now to seed and get crops off to a good start.
Instead of focusing on what could go wrong with the weather, Darren Bond, a farm management specialist with Manitoba Agriculture, suggests focusing on positive news: The 2024 AgriInsurance Crop Dollar Values are currently above current grain market prices, which he says takes some risk off the table for producers.
“It will be important this year to continually monitor one’s costs of production, changing projected values into actual values as we move through the growing season…Having a realistic expectation on the 2024 crop’s yield potential will be especially important.”
Bond says fertilizer is the highest operating cost on a farm today, and considering the tight margins projected for 2024, it’s worthwhile for growers to review their fertilizing regime. He recommends adopting 4R Nutrient Stewardship practices like banding and moving fertilizer applications to spring, which can result in savings of $20-$40 per acre without negatively impacting yield.
“The most important factor is to make sure you have the right rate to avoid missing out on potential revenue…For example, under-fertilizing canola and losing 3 to 5 bushels per acre can result in a loss of $40-$70 per acre,” says Bond.
“Adjusting fertilizer application practices can be costly, so it is important to evaluate the savings with fertilizer cost to the cost of equipment upgrades. Some gains may be easy to obtain and implement, while other changes may be cost-prohibitive.”
Fossay says it’s easy to develop a habit where growers simply maximize all their inputs to increase yields. He said this is the year to really ask yourself if you need the second application of herbicides to control weeds if you have a good-looking crop and the disease risk is relatively low.
“I don’t really need to spend another $15 spraying for weeds because there’s just not that much margin in the crop. If I spray a second time, I might get a couple extra bushels, but the cost of the herbicide is more than the bushels are worth.”
Success this year seems like it’s going to come down to managing costs of production. Manitoba Agriculture releases a Crop Costs of Production Guide every year, and this year the only profitable crops were projected to be pinto beans, white beans, black beans, soybeans, canola and oats.
Bond explains that the guide is just a reference, and growers should use their own numbers to determine the cost of production.
“To make your costs of production even more accurate, compare them to previous years’ actual costs. Some costs like fertilizer may vary greatly depending on market prices, while others like labour and repairs may not vary as much,” says Bond. “Is there a large discrepancy between what is projected for 2024 compared to the last few years? Perhaps there’s a valid reason for the difference, but if there isn’t, the projection should be checked for accuracy.”
Fossay says he does his own budget because the provincial guide is a good average indicator of costs, but everybody has drastically different costs. One of which may be debt for farm equipment.
“The good news is that equipment costs can be controlled by the producer with discipline and an objective analysis of the value an investment in a piece of equipment brings to the farm. Is there an increase in efficiency, an ability to decrease costs or the potential to increase yields on the farm?” says Bond. “While determining the costs of adding a piece of machinery to the farm is easy to quantify, determining the financial benefits can be much more difficult.”
There’s plenty to be optimistic about heading into spring—as long as you’re prepared to pay close attention to profitability and risk.
