Economic Considerations in Incorporating
Oilseeds in a Cereal Rotation
WSU Oilseed Cropping Systems
Workshop – Ritzville WA
January 31, 2017
Vicki McCracken, Agricultural
Economist, WSU
Why Consider Canola?
Crop rotation, crop rotation, crop rotation
Chemical rotation; variety options
Improve weed management
Yield increase in subsequent wheat/cereal crop
Break disease and pest cycles
Improve soil structure and health
Increase water infiltration
No need to purchase new equipment
Local demand
Economics
Economic Considerations – EconS 101
and EconS 350
Global Considerations - Market for canola and
alternative crops; exchange rates; access to
markets – transportation costs
Political Considerations – Domestic ag policy;
international political situation; tariffs and
barriers, etc
Local – own location – rainfall; history of
production (other crops, weeds, etc); input
prices; equipment; land ownership
Personal history/ past production of crops
Other?
Price Trends for Oilseeds and Cereals,
1940 – 2009
Canola, Soybeans and Wheat Prices –
2000 to 2013
15
10
Soybeans
Wheat
5
Price
20
25
Canola
2000
2005
2010
Year
Price Trends- 2000 to 2013
2015
U.S. Major Food Oil Prices, 2005 –
2015/16
U.S. Major Oil Prices
120.00
cent/pound
100.00
80.00
60.00
40.00
20.00
0.00
Soybean Oil
Canola Oil
Peanut Oil
Corn Oil
Within Year Price Variability - Vegetable
Oil Prices
2013-14
2014-15
80.00
80.00
70.00
70.00
60.00
60.00
Soybean Oil
50.00
40.00
30.00
Canola
cents/pound
cents/pound
90.00
50.00
40.00
30.00
20.00
20.00
10.00
10.00
0.00
0.00
Cottonseed Oil
Sunflowerseed
Oil
Canola Oil
Peanut Oil
Corn Oil
Edibe Tallow
Esser, A.D., 2016. “2016 Spring Canola Variety
Seed Breakfast Meeting. Colfax, WA. Nov 16.
Trial”. Direct
Introduction
• There is a large diversity of spring canola
varieties today.
• Large diversity of growing regions throughout the
inland PNW
• Limited information across the region for farmers,
field man and seed suppliers to make well
informed decisions.
WSU 2016 On-Farm Spring Canola Variety
Trials
Preliminary Yield Data
Cultivars
Mean
Yield
Rank
NCC101S (non-GMO)
2,420
1
Davenport
Fairfield
Yield
Rank
Yield
Rank
-------------- lbs/acre -------------2,063
1
2,657
3
St. John
Yield
Rank
HyCLASS 930 (Roundup
Ready)
LL140P (Invigor)
2,368
2
1,945
3
2,785
1
2,374
2
2,272
3
1,960
2
2,691
2
2,164
4
2,539
1
BrettYoung 5535CL (nonGMO)
Nexera 2020CL (high oleic)
2,181
4
1,752
4
2,263
5
2,263
3
2,081
5
1,621
5
2,544
4
2,077
5
Early One (non-GMO)
1,887
6
1,565
6
2,103
6
1,993
6
Mean
LSD (p=0.10)
CV
2,202
1,818
343
9.3
2,552
365
7.7
2,235
573
12.7
Yield and Gross Returns
Treatment
NCC101S
HC 930
LL140P
BY 5535CL
2020CL
Early One
Significance
Tukey HSD (0.05
Yield
(lb/ac)
2420
2368
2272
2181
2081
1887
a
ab
abc
bc
cd
d
Mkt Price
Gross
($/lb)
($/ac)
0.1822
0.1672
0.1672
0.1822
0.1972
0.1822
441
a
396
b
414
ab
397
b
410
ab
344
0.001
0.001
235
43
c
Economic Return over Costs
Seed Costs
Herbicide Costs
Total Costs
RoverC
($/lb)
($/ac)
($/ac)
($/ac)
NCC101S
46
15
$61
$380
a
HC 930
51
7
$58
$338
abc
LL140P
59
19
$78
$335
bc
BY 5535CL
37
16
$53
$345
abc
2020CL
37
16
$53
$358
ab
Early One
18
15
$33
$311
Treatment
Significance
Tukey HSD (0.05)
0.001
$25
c
Economic Return over Costs
Seed Costs
Herbicide Costs
Total Costs
RoverC
($/lb)
($/ac)
($/ac)
($/ac)
NCC101S
46
15
$61
$380
a
HC 930
51
7
$58
$338
abc
LL140P
59
19
$78
$335
bc
BY 5535CL
37
16
$53
$345
abc
2020CL
37
16
$53
$358
ab
Early One
18
15
$33
$311
Treatment
Significance
Tukey HSD (0.05)
0.001
$25
c
Economic Return over Costs
Seed Costs
Herbicide Costs
Total Costs
RoverC
($/lb)
($/ac)
($/ac)
($/ac)
NCC101S
46
15
$61
$380
a
HC 930
51
7
$58
$338
abc
LL140P
59
19
$78
$335
bc
BY 5535CL
37
16
$53
$345
abc
2020CL
37
16
$53
$358
ab
Early One
18
15
$33
$311
Treatment
Significance
Tukey HSD (0.05)
0.001
$25
c
Economic Return over Costs
Seed Costs
Herbicide Costs
Total Costs
RoverC
($/lb)
($/ac)
($/ac)
($/ac)
NCC101S
46
15
$61
$380
a
HC 930
51
7
$58
$338
abc
LL140P
59
19
$78
$335
bc
BY 5535CL
37
16
$53
$345
abc
2020CL
37
16
$53
$358
ab
Early One
18
15
$33
$311
Treatment
Significance
Tukey HSD (0.05)
0.001
$25
c
The Tool: Enterprise Budgets
• User-friendly
• Decision-making based on an entire crop
rotation, not just a single season
• Account for rotational impacts of canola
• Available to growers, researchers, ag
industry, and others to use for own
operation/application
The Purpose
Compare economic returns between crop
rotations with and without canola.
 Budgets are specific to growing regions in
Washington State
 Low rainfall (<12”) and low to intermediate (12-
16”) budgets are complete; HANDOUTS
AVAILABLE at workshop
 High rainfall under development
Intermediate Rainfall (12-16”) Budget
Budget Features
(red indicates interactive tabs)
• Assumptions and
• Crop budget sheets
Instructions
• Summary (of returns)
• Input Costs
• Calendars
(crops in rotation with
canola are separated out)
• Machinery complement
• Machinery costs
Interpreting Results
Total Costs (TC) = Variable Costs (VC) + Fixed Costs
(FC)
 Variable costs include annual operating costs like
fertilizer, seed, etc.
 Fixed costs include ownership costs like depreciation,
insurance, etc
 Positive returns over variable costs (Revenue - VC)
indicate short-term profitability
 Positive returns over total costs (Revenue - VC - FC)
indicate long-term profitability.
 Returns vary based on price, yield, and cost values
entered into the budget.
Comparison of canola impacts between F-SWWWF-SWWW vs. F-C-F-SWWW (through wheat yield
increases)*
Wheat Rotation Yield for SWWW
Canola Rotation Yield for Soft White Winter Wheat
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
45
1
2
4
6
7
10
12
13
15
17
19
21
23
24
26
28
46
-2
-1
1
3
4
7
9
10
12
14
16
18
20
21
23
25
47
-6
-5
-3
-1
0
3
5
6
8
10
12
14
16
17
19
21
48
-10
-9
-7
-5
-4
-1
1
2
4
6
8
10
12
13
15
17
49
-13
-12
-10
-8
-7
-4
-2
-1
1
3
5
7
9
10
12
14
50
-18
-17
-15
-13
-12
-9
-7
-6
-4
-2
0
2
4
5
7
9
51
-22
-21
-19
-17
-16
-13
-11
-10
-8
-6
-4
-2
0
1
3
5
52
-25
-24
-22
-20
-19
-16
-14
-13
-11
-9
-7
-5
-3
-2
0
2
53
-28
-27
-25
-23
-22
-19
-17
-16
-14
-12
-10
-8
-6
-5
-3
-1
54
-32
-31
-29
-27
-26
-23
-21
-20
-18
-16
-14
-12
-10
-9
-7
-5
55
-35
-34
-32
-30
-29
-26
-24
-23
-21
-19
-17
-15
-13
-12
-10
-8
Returns over total costs for canola rotation minus returns over total costs for wheat
rotation - Positive values indicate canola rotation outperforms wheat rotation
Returns over Costs varying only canola
price in low rainfall region
Summary
• Inclusion of canola into crop rotations may offer
agronomic benefits to farms that translate into
improved overall farm profitability over time.
• We find favorable economic returns of selected
crop rotations that incorporate canola as
compared to returns of traditional crop rotations
appropriate to each region when rotational
impacts are considered, based on scenarios
considered.
Extension Publications - http://css.wsu.edu/biofuels
TB09 -- Enterprise Budgets: Wheat and Canola Rotations in Eastern
Washington Low Rainfall (<12”) Regions
https://pubs.wsu.edu/ItemDetail.aspx?ProductID=15816&SeriesCode=
&CategoryID=&Keyword=tb09
TB10 -- Enterprise Budgets: 3-Year Wheat and Canola Rotations in
Eastern Washington Intermediate Rainfall Regions (12" to 16")
https://pubs.wsu.edu/ItemDetail.aspx?ProductID=15824&SeriesCode=
&CategoryID=&Keyword=TB10
Comments/Questions?
Contact Vicki McCracken
[email protected]
509-335-4728
Rotations in Region 1 suggested by growers