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March, 2007
Reference: Manitoba Agriculure, Food and Rural Initiatives
This guide is designed to provide planning information and a format for calculating the costs of production in a forage enterprise. The production costs included in this budget were not obtained from a survey of producers, nor do they necessarily represent the average cost of production for alfalfa hay in Manitoba.
The assumptions on which the costs were calculated are clearly defined in the supporting pages. They were developed by using a combination of recommended practices and methods followed by many producers.
When interpreting the costs contained in this budget for an individual situation,
adjustments may be necessary. Each assumption must be examined and adjustments made where necessary.
The budget can be useful for comparative purposes. Comparison of costs can be made with other similar farms; comparing farm costs over time; or comparing actual results with projections made earlier.
Disclaimer: This budget is only a guide and is not intended as an in depth study of the cost of production of this industry. Interpretation and utilization of this information is the responsibility of the user. If you require assistance with developing your individual budget, please contact your local Manitoba Agriculture, Food and Rural Initiatives office.
Alfalfa Hay Cost of Production Input Assumptions
|
Land
|
Total Acres
|
300 acres
|
|
|
|
Market Value per acre
|
525 $/acre
|
|
|
Years of Production
|
Establishment Year
|
Yield tons/acre (establishment year)
|
|
|
|
1
|
1
|
|
|
|
2
|
2.5
|
|
|
|
3
|
3
|
|
|
|
4
|
3
|
|
|
|
5
|
2.8
|
|
|
|
6
|
2.6
|
|
|
|
Total Yield
|
14.9 tons
|
|
|
|
Average Yield
|
2.5 tons/acre
|
|
|
|
Years rotation
|
6.0 years
|
|
|
Seed Cost
|
Certified alfalfa seed cost per lb
|
3.25 $/lb
|
|
|
|
Seeding rate(lbs/acre)
|
10.0lbs/acre
|
|
|
|
Custom seeding cost ($/acre)
|
0 $/acre
|
|
|
Fertilizer
|
$/lb
|
Establish lbs/acre
|
Annual lbs/acre
|
|
Nitrogen
|
$0.50
|
0
|
0
|
|
Phosphate
|
$0.43
|
35
|
35
|
|
Potassium
|
$0.24
|
30
|
30
|
|
Sulfur
|
$0.26
|
15
|
15
|
|
Herbicide
|
|
$/acre
|
|
|
|
Establish/burn off
|
$7.00
|
|
|
|
Annual
|
$0.00
|
|
|
Field Fuel Costs
|
Fuel Price
|
$0.81
|
|
|
Establish Field
|
Times
|
Width
|
Speed
|
Tractor
|
|
Operations
|
Over
|
Feet
|
MPH
|
HP
|
|
Cultivate (fall)
|
1
|
40
|
5
|
175
|
|
Burn Off
|
1
|
60
|
6
|
100
|
|
Cultivate
|
1
|
40
|
5
|
175
|
|
Seed/fertilize
|
1
|
40
|
5
|
175
|
|
Swath
|
1
|
16
|
5.5
|
100
|
|
Bale
|
1
|
16
|
5
|
100
|
|
|
|
|
|
|
|
Annual Field
|
Times
|
Width
|
Speed
|
Tractor
|
|
Operations
|
Over
|
Feet
|
MPH
|
HP
|
|
Fertilize
|
1
|
40
|
7
|
100
|
|
Swath
|
2
|
16
|
4.5
|
100
|
|
Bale
|
2
|
16
|
4
|
100
|
|
Moving Costs (Custom Rate)
|
Pickup, load, unload and stack ($/bale)
|
$3.75
|
$/bale
|
|
|
Average round bale weight (lbs)
|
1,500
|
lbs
|
|
Repairs & Maintenance
|
% rate of investment
|
2%
|
|
|
Crop Insurance Establish |
Premium
|
$2.92
|
$/acre
|
|
|
$ Coverage (/acre)
|
$40.00
|
|
|
Annual
|
Premium (DFA 12)
|
$7.91
|
$/acre
|
|
|
LTA
|
1.798
|
tons/acre
|
|
|
Coverage Level
|
80.00%
|
|
|
|
$ Coverage (/acre)
|
$112.49
|
|
|
Land Taxes
|
|
|
|
Cost per acre
|
$4.50
|
$/acre
|
|
Miscellaneous (Establish & Annual)
|
|
|
|
Miscellaneous Costs
|
$5.00
|
$/acre
|
|
Twine Costs
|
$1.00
|
$/acre
|
|
Interest
|
|
|
|
Interest on Operating
|
6
|
%
|
|
Investment interest rate
|
4
|
%
|
|
Capital Costs
|
Alfalfa Cost/Acre
|
Useful Life
|
Salvage Value
|
|
Land Market Value
|
$525
|
|
|
|
Machinery Investment
|
$145
|
10
|
10%
|
|
Storage Investment
|
$30
|
20
|
0%
|
|
Machinery
|
Market Value
|
% Allocated to Alfalfa
|
Allocated Alfalfa
|
|
Tractor 175 hp
|
$150,000
|
5%
|
$7,500
|
|
Tractor 100 hp
|
$85,000
|
10%
|
$8,500
|
|
Cultivator
|
$30,000
|
5%
|
$1,500
|
|
Sprayer/fertilizer
|
$100,000
|
5%
|
$5,000
|
|
Truck & Trailer
|
$0
|
40%
|
$0
|
|
Round Baler
|
$35,000
|
35%
|
$12,250
|
|
Mower Conditioner
|
$25,000
|
35%
|
$8,750
|
|
Total Machinery
|
$425,000
|
|
$43,500
|
|
Storage
|
$9,000
|
100%
|
$9,000
|
|
Total Investment
|
$434,000
|
|
$52,500
|
|
|
|
|
|
|
Land Investment
|
|
|
|
|
Land cost /acre
|
$525
|
|
|
|
Total Acres
|
300
|
|
|
|
Total Land Cost
|
$157,500
|
100%
|
$157,500
|
|
Total Capital Investment
|
$591,500
|
|
$210,000
|
|
C. Labour
|
|
|
|
Establish
|
hours/acre
|
0.42
|
|
|
rate per hour
|
$11.50
|
|
Annual
|
hours/acre
|
0.63
|
|
|
rate per hour
|
$11.50
|
Alfalfa Hay Cost of Production Summary – March, 2007
|
|
Establishment
|
Annual
|
Annual
|
Your Cost
|
|
A. Operating Costs
|
$/acre
|
$/acre
|
$/ton
|
|
|
1.00 Establishment Cost 1
|
n/a
|
$24.00
|
$9.60
|
________
|
|
1.01 Seed
|
$32.50
|
n/a
|
n/a
|
________
|
|
1.02 Fertilizer
|
$26.24
|
$26.24
|
$10.50
|
________
|
|
1.03 Herbicide
|
$7.00
|
$0.00
|
$0.00
|
________
|
|
1.04 Field Fuel Costs
|
$10.12
|
$11.98
|
$4.79
|
________
|
|
1.05 Moving Costs
|
$5.00
|
$12.50
|
$5.00
|
________
|
|
1.06 Repairs & Maintenance
|
$1.50
|
$3.50
|
$1.40
|
________
|
|
1.07 Crop Insurance
|
$2.92
|
$7.91
|
$3.16
|
________
|
|
1.08 Land Taxes
|
$4.50
|
$4.50
|
$1.80
|
________
|
|
1.09 Miscellaneous
|
$6.00
|
$6.00
|
$2.40
|
________
|
|
Sub-total Operating Cost
|
$95.78
|
$96.63
|
$38.65
|
________
|
|
1.10 Interest on Operating
|
$2.63
|
$2.66
|
$1.06
|
________
|
|
Total Operating Costs
|
$98.41
|
$99.29
|
$39.71
|
________
|
|
B. Fixed Costs
|
|
|
|
|
|
2.0 Depreciation
|
|
|
|
|
|
2.01 Machinery
|
$14.50
|
$14.50
|
$5.80
|
________
|
|
2.02 Storage
|
$1.50
|
$1.50
|
$0.60
|
________
|
|
3.0 Investment
|
|
|
|
|
|
3.01 Land
|
$21.00
|
$21.00
|
$8.40
|
________
|
|
3.02 Machinery
|
$3.19
|
$3.19
|
$1.28
|
________
|
|
3.03 Storage
|
$0.60
|
$0.60
|
$0.24
|
________
|
|
Total Fixed Costs
|
$40.79
|
$40.79
|
$16.32
|
________
|
|
Total Operating and Fixed
|
$139.20
|
$140.08
|
$56.03
|
________
|
|
C. Labour
|
$4.79
|
$7.20
|
$2.88
|
________
|
|
Total Cost of Production
|
$143.99
|
$147.28
|
$58.91
|
________
|
1. The cost of establishing the crop, $143.99/acre, was spread over 6 years at $24.00/acre/year.
Disclaimer: This budget is only a guide and is not intended as an in depth study of the cost of production of this industry. Interpretation and utilization of this information is the responsibility of the user.