Gross revenue tally provides ‘interesting’ view of drought impact

Reading time: 2 minutes

It won’t be comforting for those who have had a wreck this year, but high prices mean gross returns for most crops may have been as good or better for some compared to last year, according to an analyst at the provincial market.

“Using average yields and prices, there is a significant offset of below-average yields by high crop prices,” Neil Blue said in a Agri-News article earlier this month. “Of the six highest producing crop volumes in Alberta, only durum shows a significant decline in gross revenue when the outlook is compared to fall 2020.”

Blue used provincial numbers for yields and average prices this fall, so its numbers don’t include key factors like pre-sale. They also don’t detail grades and the impact of lower grades on pricing.

But the numbers show gross revenues for wheat and barley were only marginally below 2020 levels. And this year’s gross dollar numbers for peas, oats and canola were well above those from a year ago.

Gross turnover.

Source: AAF with data from Alberta Agriculture, Forestry and Rural Economic Development and Statistics Canada

However, the story on the farm could be radically different, the Agri-News the article states.

“There is a wide variation in the economic situation of western Canadian farmers this fall, depending on their crop yields, whether or not they have crop insurance and at what levels of coverage, and whether they whether or not they had to settle contract production shortfalls,” the article said.

However, the gross revenue figures calculated by Blue do not include crop insurance payments.

“While averages provide little consolation to growers who experienced a poor 2021 harvest, an estimate of potential crop income in 2021 using estimated average yields and average crop prices from this fall provides interesting information on the financial situation of farmers.”

They are also food for thought for growers looking ahead to the year ahead. While much of the province is dry, fueling fears of another poor growing season, crop prices remain high, Blue noted.

“Most of the current prices for these crops are above the average 2021 prices used in the calculation,” he said.

However, input costs are also going to be much higher than a year ago.

In a report released earlier this month, Farm Credit Canada predicts that herbicide prices will continue to rise — by 9% on average in 2022 — and seed prices will rise by 6%.

But those increases pale next to jumps in fertilizer prices.

The American Farm Bureau’s Market Economics Division recently compared prices in September of this year (which have since risen) to those of the previous year. Market Intel analysis indicates that ammonia increased by 210%, liquid nitrogen by 159%, urea by 155% and monoammonium phosphate (MAP) by 125%, diammonium phosphate (DAP) by more 100% and potash 134%.

For more content related to drought management, visit The dry times, where you can find a collection of stories from our family of publications as well as links to external resources to support your decisions in these difficult times.


Comments are closed.