November 1971
This report summarizes data for two years of a three year study of costs and returns for sugar beets. The data was supplied by Extension Farm Records cooperators in the Red River Valley counties of North Dakota and Minnesota for 1969-1970. The study was initiated for the purpose of updating a survey taken by the NDSU Agricultural Economics department in 1968. The study is a cooperative effort of the Red River Valley Sugar Beet Grower's Association and the NDSU Extension Agricultural Economics section and was undertaken at the request of the Grower's Association.
About 60 cooperators were initially obtained to assist in this study, although many have dropped out. The reason most cooperators dropped was the demand on their time to keep the detailed records required. Complete records were obtained from 30 cooperators in 1969 and from 27 in 1970. Thirty-two farmers are enrolled for 1971,and one additional beet grower, who farms along the Missouri River, is also keeping the same records.
The cooperators have kept records of all receipts and expenses for the farm by enterprise. Many expenses incurred were for the sugar beet enterprise only and were recorded as such. Other expenses, such as depreciation, fuel and oil, hired labor, machinery repairs, and machinery investment, were pro-rated to the beet enterprise by keeping a record of all labor and machine use by enterprise.
Our thanks to the cooperators for doing a generally fine job of keeping these detailed records.
Data summarized from Extension Farm Records by Tommy Reff, Farm Management Economist, NDSU Extension Service, Fargo, North Dakota.
Table 1 summarizes the data collected for producing sugar beets for 1969 and 1970, with a two year average.
A. Size of Business
Since most beets are raised on summerfallow, fallow costs are included where they apply to beet acres. Investment in land also includes fallow acres used for beet production.
The investment in buildings and machinery W8S determined by pro-rating the investment according to the use for the beet enterprise.
Labor figures are the operator's and unpaid family used only for beets, determined by use of time cards for labor used on each enterprise.
B. Cash Costs
Expenses listed are the average cash costs incurred for producing beets. Although cash rent is an expense item, it is not included here. Instead, a charge is made against the value of all land in Table 1E. This is done to put everyone on an equal basis concerning equity in land.
Total expenses were less in 1970 than in 1969, and were less per beet acre. Labor, gas and oil, fertilizer, and miscellaneous expenses were reduced in 1970 over 1969. miscellaneous expenses included dues, freight, trucking, truck licenses and insurance, meeting expenses, etc.
C. Cash Return
The value of beets sold for 1969 is taken from records. The value for 1970 was estimated at $16 per ton, and will be adjusted. Custom work is work done for others on sugar beets only, and is income for harvesting and hauling beets mainly. The change in machine value is a charge for depreciation, which is taken from cooperators records.
Net income decreased in 1970 mainly because of a decrease in yield.
D. Machinery Investment and Costs
The total beet machinery investment is the total investment for tractors, trucks, tillage, planting and harvesting equipment. This was determined by the percentage of time each item of machinery was used for beets during the year, and is the average investment. Beet machinery investment increased in 1970 due mostly to increases in investment for trucks and harvesting equipment.
Total machinery costs includes the costs of repairs, fuel, depreciation, and net custom work. Net custom work will be negative if more custom work was hired than was done for others. Total machinery costs per farm were greater in 1970 as were per acre costs.
E. Return to Operator's Labor and Management
The return to labor and management is obtained by deducting all resource costs from gross income. Resource costs include cash costs, plus the fixed costs of depreciation, interest on investment in buildings and machinery, and a charge against land, from gross income.
An arbitrary figure of 7% was charged against investment in beet land, buildings and machinery. Total costs changed very little between 1969 and 1970, but total costs were less in 1970 on a per-acre basis because of a larger acreage.
Decreased returns to labor and management in 1970 were due primarily to lower yields.
F. Truck Usage
Truck data was obtained from only 22 farms in 1970. The data includes hours of use, hours spent running and waiting, and miles traveled as used for the beet enterprise.
There was an increase in efficiency of about 10%, with trucks showing more time running in 1970 than in 1969. This increase in efficiency occurred in all areas. This might be attributed to better harvest conditions in 1970 than in 1969, or there may be other contributing factors.
G. Other Tables
Table 2 contains the same data for 1970 as Table 1, with the addition of costs and returns per ton
Tables 3-6 summarize costs and returns by size of beet acreage.
Table 3 summarizes data for 11 farms raising 50-99 acres of beets in 1970. This group had the rawest labor and management returns per beet acre and per farm.
Table 4 data applies to farms with 100-149 acres of beets in 1970. This group of 4 farms had the second highest returns to labor and management per beet acre.
Table 5 data chows the 6 farms with 150-199 acres of beets had the highest return to labor and management in 1970, and the lowest fixed costs, and total investment on a per beet acre basis. They also had the highest average yield.
Table 6 applies to the farms with the greatest beet acreage. These farms, with beet acreage of 200 or more acres, showed the third highest return to labor and management on a per acre basis.
1971 Sugarbeet Research and Extension Reports. Volume 2, pages 1 - 4.