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Crop Budget and Lease Evaluation Tool for Extension Educators

Gregory Ibendahl and Daniel O'Brien

Summary

In 2020-early 2021 a pair of integrated crop budget and leasing education tools were developed for use by Extension Educators. These decision tools are available on the www.AgManager.info website, providing Extension educators with estimates of crop cost of production and analysis of the economics of crop leasing arrangements.

These tools equip Extension educators with conventional and organic crop budgets for irrigated and non-irrigated enterprises. To start with, a standardized crop budgets are available by region of Kansas. Extension educators can work from these to show how varying seed, fertilizer, herbicide, fungicide, insecticide, crop insurance, and cash rents impact direct and total production costs. These breakeven cost estimates are the building block of Extension grain marketing risk management education. This tool also has a strong machinery cost analysis approach for comparisons to custom rates for field operations and equipment trade, purchase and leasing options.

An accompanying crop leasing analysis tool uses crop budget estimates to analyze the equity and profitability of cash rent, crop share and flexible leasing arrangements for both landlords and tenants. Extension educators benefit from an improved probability-based method for showing the likelihood of profits and losses for various crop leasing arrangements. In particular, a random draw “monte-carlo” method analyzes net returns to landlords and tenants from alternative revenue sharing arrangements in new generation flexible leases.

An instructional video series is available on www.AgManager.info on the use of these tools, with a December 2020 Agent in-service training focusing on crop budgets, with follow-up leasing education trainings planned.

Details

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