Georgia Growers Moving Forward with Small Grain Planting But All is Not Rosey

The National Ag Statistics Service reported on Monday that Georgia growers had planted approximately 45% of their intended acres in oats, 34% of rye and 21% of their wheat.  That is fairly close to our normal 5-year average. Conditions for the most part have been good to plant and obtain a good stand for grazing and grain production.  Winter grain prices are holding up well for Georgia, however, the rising cost of fertilizer, chemicals and other inputs have dampened the enthusiasm for planting.  

UGA budgets for the 2021-2022 production year in wheat demonstrate that opportunities to profit are good with current prices, HOWEVER; it depends on your ability to get a good contract.  As I check around the state, some companies are $ .65 to $ .75 negative basis to about $ .15 to $ .20 positive basis delivered to end use facilities.  The problem with end use facilities is that most growers will have shipping (freight or trucks) cost to deal with as well.  If you produce near them, then you are in better shape than most.  What does this mean to a grower that has higher cost but a higher value to offset that cost?  It means prior to making your decision, check with as many buyers as possible to find a profitable contract to work with before planting your crop.  You may find some limited access to the  markets due to current conditions of supply chain problems, transportation problems, processing interruptions and labor shortage and a potential for disruptions by the unknowable (COVID risk).  Limited access most likely means less acreage needed than normal to fill your contract. 

IF you plan to plant wheat this year or another small grain crop, you want to extract as much as yield potential as possible while watching your bottom line to ensure a profit at the end of the season given good weather. The following url has a good critical management overview on wheat: https://grains.caes.uga.edu/content/dam/caes-subsite/grains/docs/wheat/critical-management-inputs-2021.pdf .  In addition, the Georgia wheat production guide (last year’s) is available on line at https://grains.caes.uga.edu/content/dam/caes-subsite/grains/docs/wheat/2020-2021-Wheat-Production-Guide.pdf .  Hopefully, the new guide (2021-2022) will be available and on-line in a week or so.  The absence of a full-time grain agronomist at UGA has hampered the production of timely publications for growers.   In general, much of the practices addressed in these guides work well for all small grains.  For specifics, please check with your local county Extension agents for details specific to rye or oats.  Recommended varieties for wheat are listed below:

UGA Recommended Wheat Varieties

AP 1983 (S)AM 481 (C)LW2848 (P)USG 3329 (P)2
AGS 2021 (S)*Dyna-Gro 9701 (P)2PGX 20-15 (C)USG 3536 (P)2
AGS 2024 (S)Dyna-Gro 9811 (P)3Pioneer 26R41 (P)2USG 3539 (P)3
*AGS 3000 (C)Dyna-Gro 9002 (P)Pioneer 26R45 (P)USG 3640 (S)
AGS 3015Dyna-Gro Blanton (S)Pioneer 26R94 (C)*USG 3895 (P)3
*AGS 3030 (S)Dyna-Gro Plantation (S)SH 5550 (S)*Berkeley (C)2
AGS 3040 (S)Dyna-Gro Rutledge (S)SY 547 (P)3*Fury (C)2
AM 473(P)Go Wheat 2032 (C)2SY Viper (P)3Turbo (C)2
  1. P = Piedmont; C = Coastal Plain; S = Statewide
  2. Consider using a labeled fungicide; highly susceptible to powdery mildew, leaf rust, or stripe rust.
  3. Susceptible to some hessian fly; consider using an insecticide
  4. * To be dropped from the list in 2022-2023 season.

Before planting, I encourage everyone to review a budget for the production year.  The budget below is an estimate of the returns over various production cost expected for the 21/22 production year if you produce average yields and connect with a good contract.  Mrs. Amanda Smith, UGA Agricultural & Applied Economics, graciously provided the table below for me to share with you.  This may help you sharpen the bottom line and give you a good estimate of a return on your investment.

WHEAT FOR GRAIN, CONVENTIONAL
GEORGIA, 2021-22
Estimated Costs and Returns
Expected Yield:55bushelYour Yield
 
Variable Costs**UnitAmount$/UnitCost/Acre$/bushelYour Farm
Seedpounds 90 $   0.48 $   43.20 $    0.79
Limeton 0.25 $ 50.00 $   12.50 $    0.23 
Fertilizer
  Nitrogenpounds 80 $   0.90 $   72.00 $    1.31
  Phosphatepounds 40 $   0.70 $   28.00 $    0.51 
  Potashpounds 40 $   0.70 $   28.00 $    0.51
Weed Controlacre 1 $ 24.88 $   24.88 $    0.45 
Insect Controlacre 1 $   1.43 $     1.43 $    0.03
Disease Controlacre 1 $   4.20 $     4.20 $    0.08 
Preharvest Machinery
  Fuelgallon 3.7 $   3.05 $   11.24 $    0.20
  Repairs and Maintenanceacre 1 $   9.88 $     9.88 $    0.18 
Harvest Machinery
  Fuelgallon 3.0 $   3.05 $     9.24 $    0.17
  Repairs and Maintenanceacre 1 $   6.69 $     6.69 $    0.12 
Laborhours 0.7 $ 13.50 $   10.07 $    0.18
Irrigation*applications $    9.25 $    –   $    –   
Crop Insuranceacre 1 $ 13.00 $   13.00 $    0.24
Land Rentacre 1 $       –   $        –   $      –   
Interest on Operating Capitalpercent $137.16 5.50% $     7.54 $    0.14
Drying – 2 Pointsbushel 60 $   0.09 $     5.43 $    0.10 
Total Variable Costs: $ 287.30  $    5.22 
Fixed Costs      
Machinery Depreciation, Taxes, Insurance and Housing
  Preharvest Machineryacre 1 $ 24.79 $  24.79 $    0.45
  Harvest Machineryacre 1 $ 28.78 $  28.78 $    0.52 
  Irrigationacre 0 $135.00 $         –   $        –  
General Overhead% of VC $287.30 5% $  14.36 $    0.26 
Management% of VC $287.30 5% $  14.36 $    0.26
Owned Land Cost, Taxes, Cash Payment, etc.acre 1 $       –   $        –   $      –   
Other __________________acre 1 $       –   $        –   $       –  
Total Fixed Costs $   82.30 $    1.50 
Total Costs Excluding Land    $ 369.60 $    6.72 
Your Profit Goal  $  /bushel
Price Needed for Profit  $  /bushel
*Average of diesel and electric irrigation application costs.  Electric is estimated at $7/appl and diesel is estimated at $13/appl when diesel costs $3/gal.
**There is much volatility and uncertainty in the markets. Prices may change 10% or more in a matter of days. These costs are relevant as of Nov 1, 2021
Developed by Amanda Smith.        
Sensitivity Analysis of WHEAT FOR GRAIN,
CONVENTIONAL
Net Returns Above Variable Costs Per Acre
Varying Prices and Yields (bushel)
Price \ bushel/Acre-25%-10%Expected+10%+25%
Yield 41 50 55 61 69
$6.00-$39.80$9.70$42.70$75.70$125.20
$6.25-$29.49$22.08$56.45$90.83$142.39
$6.50-$19.17$34.45$70.20$105.95$159.58
$6.75-$8.86$46.83$83.95$121.08$176.76
$7.00$1.45$59.20$97.70$136.20$193.95
$7.25$11.76$71.58$111.45$151.33$211.14
$7.50$22.08$83.95$125.20$166.45$228.33
Fertilizer & Lime Detail
ItemUnitAmount$/Unit$/Acre$/bushel
Nitrogenpound 80 $ 0.90 $ 72.00 $     1.31
Phosphatepound 40 $ 0.70 $ 28.00 $     0.51
Potashpound 40 $ 0.70 $ 28.00 $     0.51
Limeton 0.25 $50.00 $ 12.50 $     0.23
Total Fertilizer and Lime $ 40.50 $     2.55
Weed Control Detail
ItemUnitAmount$/Unit$/Acre$/bushel
GlyphosatePt. 2.5 $ 6.75 $ 16.88 $     0.31
Ziduaoz. 1 $ 8.00 $   8.00 $     0.15
Axial XLOz.  $ 2.35 $        –   $         –  
Harmony Extra Total SolOz.  $ 9.00 $        –   $         –  
MCPAOz.  $ 0.15 $        –   $         –  
Fierceoz.  $ 0.82 $        –   $         –  
Total Weed Control $ 24.88 $     0.45
Insect Control Detail
ItemUnitAmount$/Unit$/Acre$/bushel
Lambda Cyhalothrin (Karate Zeon, Silencer, and similar products)Oz.1.5 $ 0.95 $   1.43 $     0.03
Total Insect Control $    1.43 $     0.03
Disease Control Detail
ItemUnitAmount$/Unit$/Acre$/bushel
Headlineoz  $ 1.90 $        –   $         –  
Tebuconazoleoz12$0.35 $      4.20 $     0.08
Total Disease Control $    4.20 $    0.08

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