Cost and Returns Budget for Certified Timothy Seed Production Underseeded to Barley

 
 
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 Assumptions | Price and production sensitivity | Marketing alternatives

This budget estimates the direct income and expenses over a five-year life of a timothy stand on one acre. These numbers are only intended to assist producers in evaluating the basic financial requirements over this five-year period.

The budget margin must provide funds for interest, overhead and other indirect expenses as well as a return for living, loan repayment and investment. A total farm financial analysis should be completed to determine the affect of this enterprise on the total farm business.

Assumptions

The following assumptions for field operations were made in deriving these costs:

Year 1 - Establishment
Previous fall
1
Pre-harvest Glyphosate for perennial weed control.
May
2
Cultivation
3
Seed barley and timothy (with grass seed attachment on drill)
June
4
Spray Avenge/Buctril M
July
5
Swath
August
6
Combine/Truck/Augers
7
Bale (zero net cost) (Assumption that returns for baling aftermath will cover costs)
Aug/Sept
8
Broadcast fertilizer
Year 2 - Production
May
1
Spray MCPA amine/Lontrel
July
2
Swath
August
3
Combine/Truck/Augers
4
Bale (zero net cost) (Assumption that returns for baling aftermath will cover costs)
October
5
Broadcast fertilizer
Year 3 - Production
May
1
Spray MCPA amine/Lontrel
July
2
Swath
August
3
Combine/Truck/Augers
4
Bale (zero net cost) (Assumption that returns for baling aftermath will cover costs)
October
5
Broadcast fertilizer
Year 4 and 5 - Production (same as Year 3)
Year 5 - Add breaking cost

Price and Production Sensitivity

The following table shows the affect on budget margin in the established stand (Year 3) resulting from a change in projected market returns and yields.

Table 1. Price and yield sensitivity


Marketing Alternatives

Common or certified Climax timothy seed is generally sold to local elevators or seed companies. Some seed companies have production contracts for proprietary varieties.

The prices on these contracts are generally based on the price of Climax. The price of common timothy will fluctuate greatly. Certified seed usually commands a large premium over common seed. Growing certified seed has an additional cost for field inspection.

Figure 1 shows historical yearly average prices over the last ten years for common timothy and the last five years price for certified Climax timothy.


Figure 1. Common timothy and certified Climax - average yearly prices


Table 2. Per acres costs and returns for certified timothy seed production underseeding to barley


Prepared by:
Calvin Yoder - Forage Specialist, Spirit River
George Monner - Farm Management Specialist, Fairview

Source: Agdex 127/821-4. February 2001.
 
 
 
 
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This information published to the web on February 1, 2001.