Agriculture This Week - Focus on profits above yields

Yield has always been the first measuring stick for success on the farm, and is still generally promoted as the goal, but the question that should be asked is if added production is achieved at an assured cost of production that leads to profitability.

For example the Canola Council of Canada has an established a 2025 goal of 26 million tonnes of seed production based on an average prairie yield of 52 bushels per acre.

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The push by producers to boost production has generally been in the right direction in recent years.

Since 2011-12 yields have risen from an average of 34 bu. per acre to a 2016-18 average of 41, according to a recent Western Producer story.

While yields are up, with only five years to go to get to the Council goal of 52 bushels, things would need to jump massively in those few years.

As canola has taken over as the main cash crop across much of the Canadian Prairies, acres devoted to the crop have increased, and that at times has meant pushing rotations, and putting canola fields in close proximity to other canola fields.

Such conditions are among reasons for increasing pressure from weeds, bugs and disease which puts pressure on keeping yields increasing.

To deal with weeds, bugs and disease producers generally turn to crop protection products, but there are new pressures on that side of things too, new regulations regarding long-used standbys such as glyphosate.

Moving forward farmers are going to face greater regulations when looking to the farm sprayer to fix in-field issues.

And as some long-used chemicals are restricted, expect new replacements to cost more.

With any application of chemical whether to control weeds, bugs, or disease, add to the cost of production for a crop and that can narrow the profit margin, especially if yields are still impacted.

There is a balance between price received, yields produced and the cost to produce those yields in terms of a farmer actually making money.

Yields whether 30, 40 or 52 bushels per acre is not a guarantee of profit. There are other variables that the aforementioned Council goal does not address in terms of the farmer.

The yield goal does automatically favour the bottom line of seed companies, fertilizer sellers, and chemical companies since such a yield will require maximizing nutrient levels and applying chemicals to protect every bushel of potential yield.

But, in spending to maximize production the producer also increases a risk. When weather -- still the key element in production -- impacts things in a negative way, the bills for fertilizer and chemical must still be paid, regardless of the lower yield.

While yield increases are a measuring stick, without an eye of profits over cost-of-production, those yields might not be as positive as a quick look might suggest.

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