Breakeven yields of wheat and canola

Page last updated: Thursday, 15 June 2017 - 8:54am

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Carefully consider the crop's yield potential before committing resources to late sown or emerging crops.

If your expected yield is greater than your variable cost breakeven yield, you will be covering your variable costs and contributing to fixed or overhead costs.

If your expected yield is lower than your variable cost break even yield, reassess if the inputs planned will be adding value to the yield potential of a crop emerging in June.

Discussion

A challenge for growers with a late break is the expected yield of their crops and the impact this could have on their bottom line. It is important to carefully consider the crops yield potential before committing resources to late sown or emerging crops.

Yield potential of crops emerging in June can still be reasonable depending on location and seasonal conditions. However, delayed sowing (especially into June) can have a significant impact on yield potential compared to crops sown into moist soil in May.

With the knowledge of your planned input costs and farm gate price, you can estimate your break even yield (Tables 1 and 2). If your expected yield is greater than your breakeven yield then the crop is covering variable costs and also contributing to fixed or overhead costs. For example, if the farm gate price for a crop is $200/t and the costs of variable inputs is $250/ha then the crop needs to yield 1.25t/ha to breakeven. At yields higher than this the enterprise is covering its variable costs and contributing to the fixed or overhead costs. If predicted yield is less than 1.25t/ha then it will be necessary to rethink your input costs.

Table 1 Wheat breakeven yields (t/ha) to cover variable costs, at farm gate prices of $170-280/t
Variable cost ($/ha) $170/t nett on farm $180/t nett on farm $190/t nett on farm $200/t nett on farm $210/t nett on farm $220/t nett on farm $230/t nett on farm $240/t nett on farm $250/t nett on farm $260/t nett on farm $270/t nett on farm $280/t nett on farm
$130 0.76 0.72 0.68 0.65 0.62 0.59 0.57 0.54 0.52 0.50 0.48 0.46
$150 0.88 0.83 0.79 0.75 0.71 0.68 0.65 0.63 0.60 0.58 0.56 0.54
$170 1.00 0.94 0.89 0.85 0.81 0.77 0.74 0.71 0.68 0.65 0.63 0.61
$190 1.12 1.06 1.00 0.95 0.90 0.86 0.83 0.79 0.76 0.73 0.70 0.68
$210 1.24 1.17 1.11 1.05 1.00 0.95 0.91 0.88 0.84 0.81 0.78 0.75
$230 1.35 1.28 1.21 1.15 1.10 1.05 1.00 0.96 0.92 0.88 0.85 0.82
$250 1.47 1.39 1.32 1.25 1.19 1.14 1.09 1.04 1.00 0.96 0.93 0.89
$270 1.59 1.50 1.42 1.35 1.29 1.23 1.17 1.13 1.08 1.04 1.00 0.96
$290 1.71 1.61 1.53 1.45 1.38 1.32 1.26 1.21 1.16 1.12 1.07 1.04
$310 1.82 1.72 1.63 1.55 1.48 1.41 1.35 1.29 1.24 1.19 1.15 1.11
$330 1.94 1.83 1.74 1.65 1.57 1.50 1.43 1.38 1.32 1.27 1.22 1.18
$350 2.06 1.94 1.84 1.75 1.67 1.59 1.52 1.46 1.40 1.35 1.30 1.25
Table 2 Canola breakeven yields (t/ha) to cover variable costs, at farm gate prices of $420-600/t
Variable cost ($/ha) $420/t nett on farm $440/t nett on farm $460/t nett on farm $480/t nett on farm $500/t nett on farm $520/t nett on farm $540/t nett on farm $560/t nett on farm $580/t nett on farm $600/t nett on farm
$180 0.43 0.41 0.39 0.38 0.36 0.35 0.33 0.32 0.31 0.30
$200 0.48 0.45 0.43 0.42 0.40 0.38 0.37 0.36 0.34 0.33
$220 0.52 0.50 0.48 0.46 0.44 0.42 0.41 0.39 0.38 0.37
$240 0.57 0.55 0.52 0.50 0.48 0.46 0.44 0.43 0.41 0.40
$260 0.62 0.59 0.57 0.54 0.52 0.50 0.48 0.46 0.45 0.43
$280 0.67 0.64 0.61 0.58 0.56 0.54 0.52 0.50 0.48 0.47
$300 0.71 0.68 0.65 0.63 0.60 0.58 0.56 0.54 0.52 0.50
$320 0.76 0.73 0.70 0.67 0.64 0.62 0.59 0.57 0.55 0.53
$340 0.81 0.77 0.74 0.71 0.68 0.65 0.63 0.61 0.59 0.57
$360 0.86 0.82 0.78 0.75 0.72 0.69 0.67 0.64 0.62 0.60
$380 0.90 0.86 0.83 0.79 0.76 0.73 0.70 0.68 0.66 0.63
$400 0.95 0.91 0.87 0.83 0.80 0.77 0.74 0.71 0.69 0.67
$420 1.00 0.95 0.91 0.88 0.84 0.81 0.78 0.75 0.72 0.70
$440 1.05 1.00 0.96 0.92 0.88 0.85 0.81 0.79 0.76 0.73
$460 1.10 1.05 1.00 0.96 0.92 0.88 0.85 0.82 0.79 0.77
$480 1.14 1.09 1.04 1.00 0.96 0.92 0.89 0.86 0.83 0.80
$500 1.19 1.14 1.09 1.04 1.00 0.96 0.93 0.89 0.86 0.83

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Authors

Christine Zaicou-Kunesch
Paul Mattingley