The University of Arkansas’ 2018 wheat budgets are available. A pdf or “hard copy” version can be downloaded at this link: Crop Production Budgets for Farm Planning See page 38 for a detailed wheat budget.
An Excel spreadsheet version of the wheat budget is also available: 2017-18 Wheat budget
As production costs and commodity prices fluctuate from year to year or new inputs become available, an enterprise budget can be useful in making crop mix decisions. Though there may not be a published budget for all situations, university budgets will at least provide a starting place that producers can modify to their specific operation.
For questions or comments about the 2017/18 wheat production budgets, contact Breana Watkins, Program Associate – Agricultural Economics, at 870-933-4565 or firstname.lastname@example.org
Wheat Market Volatility:
This summer has provided some excitement in the wheat market. Looking at July 2018 futures in particular, the contract traded up to a high of $6.09 ½ on July 5th. The price run-up in Chicago wheat earlier this summer was closely linked to the drought related rally in Minneapolis spring wheat. Once that story ended, prices for SRW (soft red winter) pulled back quickly. By August 29th the July ‘18 contract traded as low as $4.74 ¼. As of September 20th, prices have moved 20 cents above the August lows and are now within a nickel of the $5 mark.
This type of price volatility dramatically changes the yield required to generate returns over variable costs. In early July when some producers were locking down $6 for ’18 wheat, break-even yields were in the low 50s (on 25% share rent). Today, depending on the basis at your delivery location, break-even yields are generally in the range of upper 60s to low 70s. Enterprise budgeting can be valuable in evaluating the impact of a number of factors on break-even yields such as commodity prices and farm lease agreements.