Ep. 26 Analyzing Crop Choice Using the Arkansas Crop Profit/Loss Calculator

00;00;09;19 – 00;00;10;22
Dr. Ryan Loy
Long time no see.

00;00;10;24 – 00;00;28;20
Riley Smith
Yeah. Long time no see. All right, here we go. Good morning. Good morning. Welcome to another episode of Morning Coffee and Ag Markets 2025 edition with your host, Riley Smith. We’re back in the studio from a long, not really a long, but a pause for the cause. Took a holiday break.

00;00;28;23 – 00;00;40;06
Riley Smith
Hope everybody had a great holiday. I got Hunter in the studion with me, and Doctor Ryan Loy is on the zoom call with us sitting in San Diego right now. How are you guys doing?

00;00;40;09 – 00;00;42;11
Dr. Hunter Biram
Great.

00;00;42;14 – 00;00;44;11
Riley Smith
I feel like y’all are bamboozled right now?

00;00;44;12 – 00;00;57;20
Dr. Hunter Biram
Great. I guess I never know, like, who’s who’s supposed to say it first on zoom? Like, how’s everyone like it to me? One of those awkward situations as you get on zoom, there’s like, 16 people on their like. Yeah. How’s everybody doing? Crickets.

00;00;57;20 – 00;00;58;20
Dr. Hunter Biram
Because, like, no one knows.

00;00;58;20 – 00;01;01;01
Dr. Hunter Biram
No one knows. Am I going to be the first one?

00;01;01;05 – 00;01;10;21
Riley Smith
That’s like, kind of like sitting in a classroom? Everybody’s like, how’s everybody doing? But. And then you got 80 people in a chemistry class now going.They don’t know

00;01;10;23 – 00;01;18;10
Dr. Ryan Loy
like multiple people to start saying the same thing at one time. And then they all stop at one time, start to start again, and they’re all just talking over each other.

00;01;18;10 – 00;01;21;27
Riley Smith
Yeah. So like Ricky Bobby, I don’t know what do my hands. Right.

00;01;21;28 – 00;01;22;15
Dr. Hunter Biram
puttem down, Ricky.

00;01;22;15 – 00;01;24;19
Dr. Hunter Biram
Puttem down

00;01;24;21 – 00;01;34;15
Dr. Ryan Loy
Well, Riley, I hope you got a great winter break as well. Looking forward to being here and looking forward to a great 2025 getting ready for, production season. So look excited. But

00;01;34;17 – 00;01;38;29
Riley Smith
I’m not sure if that was much of a winter break or fixing to become winter right now.

00;01;39;01 – 00;01;43;16
Dr. Ryan Loy
Yeah, yeah. I was like, I won’t be making it back to Little Rock

00;01;43;19 – 00;02;10;08
Riley Smith
Yeah, it’s fixing to get really cold and really snowy really quick. But anyway, we’ve got get these guys in here today talking about the arkansas net return calculator that a Doctor Biram and Doctor Loy created for our growers to, to look at their, profitability in the 25, hopefully to 25 season. So, I’m going to turn it over to Doctor Biram let him talk about it a little bit and, kind of run through a couple examples.

00;02;10;08 – 00;02;10;19
Riley Smith
Yeah.

00;02;10;19 – 00;02;38;17
Dr. Hunter Biram
So, I’ll start off by just giving some background on this tool. So, Ryan and I, almost every presentation that we give, we provide what we call our PNL or profit and loss tables. So in those tables, we have, alternative yields, alternative prices. And then we have their associated, costs of production. So obviously your total price equals revenue minus cost is going to be, it’s going to be a, a net return.

00;02;38;18 – 00;02;41;15
Dr. Hunter Biram
You know, that net return could be negative, it could be positive.

00;02;41;17 – 00;02;42;29
Dr. Ryan Loy
And can I interfere. Yeah.

00;02;43;02 – 00;02;43;16
Dr. Hunter Biram
Yeah go ahead.

00;02;43;16 – 00;03;02;02
Dr. Ryan Loy
And so we’re up to you and in here Hunter I just want to make the this just to make the distinction so people can know this is, net returns above your operating expenses and your, rental agreements. So whether it’s a crop share that’s just taking out of your revenue or an actual expense item, like, cash rent.

00;03;02;04 – 00;03;25;23
Dr. Ryan Loy
So as you’re looking through this, one of the things that or, you know, a few things that is not being considered in the cost right now, is going to be stuff like taxes, depreciation and other fixed expenses on your equipment or your land or your, your buildings, those sorts of things. However, if you do know your own cost, there’s an option to do that in here.

00;03;25;25 – 00;03;48;27
Dr. Ryan Loy
And all of these costs we automatically have put in here. Excuse me, that Hunter has put in here, are based on our USDA budgets, and you can go to that budget and we can link it into the, the newsletter as well. And you can look at those costs and you can look at those fixed expenses. And if those are similar to your farm, you can add them in, to the costs we have here.

00;03;48;29 – 00;03;55;22
Dr. Ryan Loy
If not, you can add your own. So I just wanted to kind of put that in there. Just so folks will know is they’re looking through this.

00;03;55;24 – 00;04;20;10
Dr. Hunter Biram
Yeah. And I appreciate you pointing that out. These are, you know, it’s the cost to produce the crop. Okay. So no equipment loan here. And so there’s no appreciation, no capital recovery costs. It’s just it’s the cost to produce the crop. And, so just keep that in mind as we’re talking about this. So, with this.

00;04;20;10 – 00;04;39;20
Dr. Hunter Biram
Net return calculator is a web based tool. So we’ll have a link in the newsletter. And you can click on it and it’ll pull up on your desktop and is free. It’s totally free. Just click on it. It’ll bring up, a web page. And then you have to input what county you’re in. This is the Arkansas Territory, Kyler.

00;04;39;20 – 00;04;59;00
Dr. Hunter Biram
So it’s only for counties in Arkansas, and it’s only for counties in Arkansas or county crop combinations for which there’s historical yield data available. So you’ll choose your county not to use your crop, you know, irrigated or not irrigated. There is an option if you want to input your own cost, you can. If not, it just uses the USDA crop enterprise budgets.

00;04;59;02 – 00;05;19;28
Dr. Hunter Biram
You choose what rental agreement you’re under, whether that’s a cash rent, a crop share, or if you own. So if you don’t, I mean, if you don’t rent ground, good for you. You can also go in and see, what’s your what’s your returns look like? And then below that, if you choose crop share, you can put in what percentage the share is.

00;05;19;28 – 00;05;36;16
Dr. Hunter Biram
So let’s say it’s in it’s an 8020. So when you put your crop share in there, you’re going to want to put in, your landlord’s share. So, you know, don’t don’t put in 80%. It’s all going to be horrible. I mean, there’s you won’t make any money anyway. Or if you put in 80 instead of.

00;05;36;16 – 00;05;38;28
Dr. Ryan Loy
20% of your revenue with 100% of your costs.

00;05;39;04 – 00;05;56;26
Dr. Hunter Biram
And yeah, that’s that’s just not good business sense right there. So be sure that you put in your, your landlord’s, cut on crop share for cash rent it literally just put in whatever the rate is per acre. So it’s 150, it’s 150 to 200, 200 and so on. You did not put anything in there.

00;05;56;29 – 00;06;18;22
Dr. Hunter Biram
As we continue to navigate around the web page, there’s also a box that gives the expecting yield expected price, the cost again provided by UADA crop enterprise budgets. And a break even deal on the breakeven price. So I’m going to go through each one of these items. The expected yield is calculated for each county crop combination. That’s expected yield for 2025.

00;06;18;24 – 00;06;41;16
Dr. Hunter Biram
The way that that’s calculated is for each county. What I do is I I detrend I detrend yields. And, you know, Ryan, you and I talked about the importance of of doing this and, you know, the reason why we detrend the yields is just because we’ve been more productive over time. Technology has gotten, is is helping us to improve our yields.

00;06;41;16 – 00;06;59;22
Dr. Hunter Biram
And yields are generally gone up over time. So let’s say a yield maybe in 1960 for for corn in Arkansas, maybe a good deal would have been like a 110 or a 120. That was like, hey, that’s actually pretty good. But you know, in today’s yields we’re looking more like a, you know, 220, maybe 230. And like that’s that’s a really good yield.

00;06;59;24 – 00;07;20;06
Dr. Hunter Biram
And so effectively yields have doubled over time. And so when we do this expectation for 2025 farm we don’t want to throw in the 110. We want to throw in an adjustment that will adjust that 110 maybe to it might end up being and you make the adjustment like maybe 200 to 10 to 20. So that would take the average of all those yields across time.

00;07;20;06 – 00;07;23;06
Dr. Hunter Biram
And that that becomes our expectation.

00;07;23;09 – 00;07;26;17
Dr. Ryan Loy
So it’s kind of like accounting for inflation. But in a, in a good way.

00;07;26;19 – 00;07;55;21
Dr. Hunter Biram
That’s exactly what it is. That’s exactly what it is we have our deflated is or yes our deflated yield is the way is the way to think about it. Expected price okay. How’s that calculated. So we use CME futures prices and cash prices that are reported by USDA Nass. So essentially what we’re going to do there is we’re going to take, a 30 day average of the harvest month futures contract for 2025.

00;07;55;21 – 00;08;21;08
Dr. Hunter Biram
So for corn, it’d be December 25. For soybeans, it would be November 25 for cotton, it’d be December 25 for rice. We use November 25. And, we take that 30 day average, for the month of November 2024, but it’d be for the 2025, Harvest. That 30 day average futures price. But we know that our farmers don’t get futures prices.

00;08;21;08 – 00;08;43;15
Dr. Hunter Biram
They get cash prices. And, so what we do then is we account for this, but, calculate the expected basis for each one of these crops. So we look over time at what have futures dot over time, what have cash prices reported by USDA and done over time. What are their differences. And take the average and boom that your average or your expected basis.

00;08;43;18 – 00;08;56;10
Dr. Hunter Biram
So we tack on an expected basis to this futures price to give you a cash price. So when you’re looking at this table and is using cash prices to calculate returns not futures promises.

00;08;56;12 – 00;09;03;02
Dr. Ryan Loy
And under what’s our relationship between the cash price the futures and how does the basis go into that. And why did you account for that.

00;09;03;04 – 00;09;33;29
Dr. Hunter Biram
Yeah. So generally speaking at harvest time especially cash, cash prices tend to be below futures prices resulting in negative basis. And so we would definitely want to account for that. So typically your season average price year. You know Riley , you and I have talk about season average price. Before. So if you’re doing marketing and you’re seeing a little bit of grain throughout the year, or maybe you’re in a post harvest window, you’re selling some terrain that’s going to be, you know, the prices that you receive in those transactions will be averaged effectively to get your season average price.

00;09;34;02 – 00;09;53;23
Dr. Hunter Biram
And so the season average price tends to be below what that, futures price is. And so it’s important to account for that because you don’t want to think that you’re going to get $0.30 more than you’re really getting. Because at $0.30 this is very important. Especially in times like this, when times are really tight. So we don’t want to inflate what the returns could be.

00;09;53;23 – 00;09;58;18
Dr. Hunter Biram
We want to be sure that we’re creating a realistic price and realistic returns.

00;09;58;20 – 00;10;13;20
Riley Smith
Right. And it like this past this past season, you had a lot of, negative basis. So I mean, so yeah, a lot of that 30 like -30 year, you think you’re getting $0.30 more when you’re really getting $0.30 last. And then that’s what the real value of it is. Yeah.

00;10;13;20 – 00;10;36;12
Dr. Hunter Biram
You know one thing that I don’t I guess, I guess you could say I did account for it, in this table. But the Mississippi River, I mean, we saw basis of, you know, 100 negative, 100 -125. So there are some very low prices in this table, that maybe there’s a chance that happens, but only because the river gets low again.

00;10;36;15 – 00;10;56;13
Dr. Hunter Biram
And you don’t have anywhere to store your crop. But if you do, when you just paid marketing, that’s why. No, not unexpected price. Cost. We’ve touched on just a little bit. USDA crop enterprise budgets that Breanna Watkins works on. That’s fantastic work with that. And again production expenses, production expenses only their, breakeven yields.

00;10;56;13 – 00;11;20;15
Dr. Hunter Biram
Okay. So I’ve seen Ryan give some pretty great talks on break evens the jury some good discussion at these meetings. And so I was like, well, maybe we should go and throw and break even yields and prizes to give people an idea, some goals that they need to shoot for in the upcoming year. So the breakeven yield, I think the simplest example is we’ll start with calculate a break even yield for an owned example, then a cash rent example and then a crop share example.

00;11;20;17 – 00;11;42;11
Dr. Hunter Biram
So what’s the breakeven yield under an old scenario is simply going to be the cost that you’ll see in this box. Divided by the expected price. But the expected yield. Because what we want to do is we want to figure out what yield do I need to achieve given at the price given the price expectation to have a profit of zero, if that’s what you’re trying to figure out.

00;11;42;14 – 00;12;03;16
Dr. Hunter Biram
Okay. So then similarly for the break even price, it’ll be the cost of added by the expected yield. And that’ll give you your break even price. So the break even yield can tell you as a producer when you’re looking at, you know, different seed varieties and different combinations of fertilizer, pesticides and so on that can give you, you know, your yield potential.

00;12;03;16 – 00;12;24;20
Dr. Hunter Biram
You can start looking at, okay, if the price doesn’t change, if, you know, if the price remains, say, for corn in this sense, is it let’s say the corn price stays at $4.06. I need to get 248 bushels per acre to break even. And, so that’s, sorry. Scratch that. Let’s go to. Oh, I’m on crop

00;12;24;20 – 00;12;26;04
Dr. Hunter Biram
I’m on crop share. Okay.

00;12;26;07 – 00;12;26;29
Dr. Ryan Loy
Craig-

00;12;27;02 – 00;12;46;19
Dr. Hunter Biram
Yes. Yes, this is for Craighead. Yep. Sorry, folks. So costs stays the same across all the counties. All the. And, Yeah, all the counties for a crop. The, sorry. So the breakeven yields is going to be in this case, 806 or $806 an acre, roughly divided by the expensive price of $4.06.

00;12;46;22 – 00;13;03;08
Dr. Hunter Biram
That’s going to give you a breaking yield of 198 .54 thereabouts. Similarly, from the breakeven price is going to be the cost of 806 divided by the expected price of 4.06 to give you the breakeven yield of 198.54. One that twice did not.

00;13;03;11 – 00;13;20;18
Riley Smith
Well, no, no, I think you said of some kind of. That’s right. Because if you look at the chart, if you’re at 199, if you’re at 199 bushel and you’re at $4.04 per bushel, lethargy at $1.88, there you go. Which would be your yes, that makes you profitable, but that makes you break even by pretty much. Yeah, yeah.

00;13;20;18 – 00;13;44;05
Dr. Ryan Loy
I think it’s really important to, to consider when you’re going through this and you’re, you know, one thing about calculating these breakeven yields and break even prices is that you have to assume, because you’re forward looking when you’re doing this, and the the more records you have and the more accurate they are and the more the more often that you as the producer, you know, stay on top of those, the better idea of your true cost.

00;13;44;05 – 00;14;06;14
Dr. Ryan Loy
So that way, if you calculate this breakeven, you’re the breakeven price. You’re not undervaluing what you’re doing, but you’re also not overvaluing what you’re doing, because the last thing you’d want to do is overvalue it and be blindsided by needing a higher breakeven price than you were expecting, or a higher breakeven yield than you expecting. So those are some things to keep in mind as you’re working through this.

00;14;06;16 – 00;14;25;25
Dr. Hunter Biram
Yeah, I mean, being realistic as possible is is key here. And the reality is I mean, guys, we’re all sitting here talking about break even break even break even. And that is, that’s that’s the state of play right now. Like we’re we’re just trying to break that. No one’s making money this year. I’m here to tell you no one’s making money this year.

00;14;25;25 – 00;14;35;20
Dr. Hunter Biram
Really, the goal is breaking even. And being able to pay that loan just to make it through another year. And that’s a sad story, but that is the reality that we’re living in.

00;14;35;22 – 00;14;56;28
Riley Smith
Right? Is the reality hit farm in the next year? Yeah. And that’s what this, decision making tool is going to help you. Do, you know, especially as Ryan, as he’s discussed, farm planning is huge and good record keeping. So keeping those receipts, keeping records and staying on top and being as accurate on those costs as well will help you in this net return calculator.

00;14;57;00 – 00;15;14;04
Dr. Hunter Biram
Oh, absolutely. So now let’s move on to, cash rents that was owned. Let’s move to the cash rent. Let’s just use again. We’re we’ll just stick with, great for this example. No particular reason. Just just pulled up here. So we have cash rate, and let’s just assume at 150 cash rate, you can change it in the tool.

00;15;14;04 – 00;15;42;26
Dr. Hunter Biram
So if you, you know, you and your lender were to work outa different agreement, 100, 125 you know, whatever 175 you put that in there. So it will change, break evens. It will not change. Expected yield, expected price or cost will change. Break evens. Why? Because you’re adding to your cost. So if you take, the again, the UADA crop enterprise production expense of the 806 tag on that 150 now you’re sending about $956 an acre is what your cost is.

00;15;42;28 – 00;16;08;20
Dr. Hunter Biram
We’ll take that value, divide it by the expected price. And now your break even yield is 235.48, which is about, I think, 36, 37 bushels more than in the old case. So you got to you got to increase that break even a lot. Similarly take that 956 and divide it by the expected yield of 199.35 bushels per acre, and you get the regular price of $4.80 a bushel.

00;16;08;22 – 00;16;34;06
Dr. Hunter Biram
And so that’s how the cash rate calculation would work. I’m not going to go into any more detail, implications just yet. We’ll we’ll save that. Okay. Now let’s look at an 80/20 crop share agreement. Now we have to account for a cost here. It’s not explicitly given. But think about this. If you have an 80/20 crop share, you’re only getting 80% of expected crop value.

00;16;34;06 – 00;16;55;07
Dr. Hunter Biram
Or whenever you actually get your check, your your real realized, you know, crop value. There’s a cost there. You have to pay 20% of the crop value. Think about that. You still have to pay that quote unquote. It’s more of an implicit cost, but you still got to pay it because that’s not revenue that you’re generating that you can use to pay to pay off, to, pay off that loan.

00;16;55;10 – 00;17;16;04
Dr. Hunter Biram
So effectively that is a cost. So we account for that and we do a little bit of algebra, to figure out what that break even looks like. Okay. So now we know 80/20 This is Craighead Corn. Take the 806 cost. And then we’re going to account for the implicit cost of the rent. And you’re breakeven. And your breakeven yield is 248.

00;17;16;04 – 00;17;33;19
Dr. Hunter Biram
In this example your break even price is $5. I could go in and try to do some mental math and, and do this without, a whiteboard, but I think it’d be more confusing than it’s worth. So just, you know, take my word for it. You know, we are accounting for the crop share, correctly and of breakeven analysis,

00;17;33;22 – 00;17;34;16
Dr. Ryan Loy
we’re happy to.

00;17;34;16 – 00;17;46;22
Dr. Ryan Loy
You know, I’m happy to explain it. And I’m sure Hunter would be as well. You know, we’re about to go out to the counties for the next two months, and we’ll be out there. And if you’re using this and you have questions on it, please just let us know. We’d be happy to sit down with you. So I got a question.

00;17;46;22 – 00;18;00;28
Riley Smith
Can we set a link in the description of the, the, newsletter and, podcast, put in to be able to, go to this and play with it, so when they go to the county meetings and they can already have their questions kind of teed up

00;18;01;01 – 00;18;01;21
Dr. Ryan Loy
and it works on the

00;18;01;21 – 00;18;02;02
Dr. Hunter Biram
Absolutely

00;18;02;02 – 00;18;03;15
Dr. Ryan Loy
And I confirm that again this morning.

00;18;03;15 – 00;18;13;03
Dr. Ryan Loy
So if you it’s better on the on the computer. However if the phone is what you have and it’s more convenient for you, it works perfectly on there as well.

00;18;13;05 – 00;18;33;18
Dr. Hunter Biram
Absolutely. So that’s our our main panel there on the left are, our sidebar there. Now the the main center piece, I guess you can call this, of the tool is a table. And for those of you who have in our presentation, you’ve seen this table before. You know, Ryan and I, we get emails about it, get calls.

00;18;33;18 – 00;18;53;17
Dr. Hunter Biram
So, hey, I want to know about that table that you talked about, that one place, that one meeting on that one day And we always know exactly what it is. And so what we have here is we have a row of ten different yields. We have a column of ten different prices. And then what we have is it’s going to sound crazy.

00;18;53;17 – 00;19;16;18
Dr. Hunter Biram
It’s not too overwhelming though. We have 100 different outcomes. Net returns across these prices and yields after accounting for the production cost and accounting for the rental agreement. Okay. So it’s not overwhelming, because, you know, we have the negative values are colored red positive values are colored black. And so you’ll be able to see very clearly the potential profitability for each crop.

00;19;16;18 – 00;19;32;10
Dr. Hunter Biram
So if it’s not it, the table is mostly red. Probably not a very profitable crop actually it’s not very profitable It’s not a very profitable crop. If there’s more black in the relative sense now there’s no table that has all black. I’ll just I’ll just tell you there’s always going to be some red in there and some crops have more red than others.

00;19;32;10 – 00;19;43;20
Dr. Hunter Biram
But we hope that you can use this tool to say, okay, this crop, you know, has a lot of red and this probably has less red, so maybe I should go with the crop that has less red. This way to think about it.

00;19;43;24 – 00;19;47;00
Riley Smith
Right. Like a balance sheet. You just want to be in black.

00;19;47;02 – 00;20;21;16
Dr. Hunter Biram
You really do. And you want to minimize that. Minimize that red. You know Riley, earlier, you and I, as we were prepping for this, we were looking at some alternative combinations. So maybe I’ll pull up, cotton and talk about it. Talk about how tough, cotton is. I’m going to pull up, a, Woodruff is the example that I used do the 80/20 irrigated cotton in Woodruff County got only three values out of 100 that give you a positive return, and those are only at prices of $0.94 a pound and a $1.01 per pound.

00;20;21;17 – 00;20;23;07
Riley Smith
Very optimistic view.

00;20;23;09 – 00;20;32;03
Dr. Hunter Biram
I mean that’s a that’s yeah, that’s your pie in the sky. Pigs are flying. I mean, there’s all kinds of stuff happening in your world. It’s all happening in mine.

00;20;32;03 – 00;20;42;12
Riley Smith
Yeah, if we’re saying it, we’re seeing $0.94 pound cotton. We’re probably seeing nearly $7 bushel corn. But yeah, I mean $10. And those are prices.

00;20;42;12 – 00;21;00;05
Dr. Hunter Biram
Prices that resulted from Covid, I mean, like that’s where we were was like those over a dollar a pound was the result of, of Covid. And we all know what happened there. So, I mean, something catastrophic, right? We have to happen and let’s just print that doesn’t happen. Not like. Oh, well, I don’t want to go back on lockdown.

00;21;00;08 – 00;21;15;04
Dr. Hunter Biram
But, really, if we’re looking at the expected price of $0.67 a pound, I mean, there’s no level of yield that we’re presenting here that is profitable. And even at a yield that’s 50% higher than expectation, you’re still sitting in about a -$260 per acre hole.

00;21;15;06 – 00;21;24;19
Riley Smith
And what’s even crazy is just like looking at this table, it only goes up to 13.28 or a break. Even yield on this is 18.16

00;21;24;21 – 00;21;26;11
Dr. Ryan Loy
Yeah. It’s not even on the table,

00;21;26;18 – 00;21;27;18
Riley Smith
not even on the table

00;21;27;21 – 00;21;28;21
Dr. Ryan Loy
hundred pounds.

00;21;28;21 – 00;21;35;13
Riley Smith
That is in the in the break even price is $1.38 and it only goes to one dollars $1.01.

00;21;35;15 – 00;21;36;10
Dr. Ryan Loy
Yeah, it’s in a bushel.

00;21;36;10 – 00;21;39;00
Dr. Ryan Loy
I mean, it’s for cotton Hunter.

00;21;39;02 – 00;21;43;07
Dr. Hunter Biram
It’s all going to be in pounds. That’s a labeling issue, I get that. I just want to wonder.

00;21;43;10 – 00;21;45;24
Dr. Ryan Loy
At this exact and same pounds this whole time I’m like, oh, wait.

00;21;45;26 – 00;21;47;22
Dr. Hunter Biram
No buts. its in pounds that’s a typo.

00;21;47;24 – 00;21;56;20
Riley Smith
But you’re talking about an operating cost of $973.96 per acre on an 80/20 split. Yeah, that’s crazy expensive.

00;21;56;20 – 00;21;59;04
Dr. Hunter Biram
Crazy. That’s expensive

00;21;59;06 – 00;22;00;24
Riley Smith
Them cotton pickers ain’t cheap.

00;22;00;27 – 00;22;02;24
Dr. Hunter Biram
No. Well, we’re not accounting

00;22;02;24 – 00;22;03;13
Dr. Hunter Biram
For cotton pickers.

00;22;03;15 – 00;22;06;25
Riley Smith
Because it’s not even accounting for that Cotton picker because. Oh yeah.

00;22;06;26 – 00;22;09;03
Dr. Hunter Biram
It’s just, you know, seed fertilize.

00;22;09;04 – 00;22;18;05
Riley Smith
Yeah. This whole and equipment this ain’t including and, this isn’t including it’s including your corn on the food and your fuel.

00;22;18;05 – 00;22;19;21
Dr. Hunter Biram
It is. You know, it’s got, you know it.

00;22;19;22 – 00;22;23;09
Riley Smith
But they don’t include your 23 loan 24 loan.

00;22;23;11 – 00;22;23;19
Dr. Hunter Biram
Right.

00;22;23;20 – 00;22;25;10
Riley Smith
There’s a lot it’s not accounted for.

00;22;25;10 – 00;22;26;07
Dr. Hunter Biram
Sure.

00;22;26;09 – 00;22;31;13
Riley Smith
So that’s that’s scary to look at. And you see, you said there’s 100 outputs on this.

00;22;31;16 – 00;22;31;23
Riley Smith
Yeah.

00;22;31;23 – 00;22;32;12
Dr. Hunter Biram
Two by ten.

00;22;32;13 – 00;22;37;28
Riley Smith
Okay. So there’s 100 outputs and there is three out of those 100. That’s black. Yeah.

00;22;38;00 – 00;22;48;00
Dr. Hunter Biram
So those are effectively this is a totally right but pretty close to it. There’s a 3% chance that you can be profitable in under this combination. And that’s not those aren’t good aren’t mercy.

00;22;48;02 – 00;22;49;14
Dr. Ryan Loy
No. No sir. No sir.

00;22;49;14 – 00;23;09;06
Dr. Hunter Biram
This like you know I’ll do a quick run through. You know, I’ll pull up a clear pull up another county here. Let’s just go to the very top here. Start started a as a as a friend of mine used to say let’s buy soybeans. Okay. So, let’s just get started. So Arkansas County will do soybeans.

00;23;09;08 – 00;23;29;14
Dr. Hunter Biram
This is for irrigated crop share 80/20. You’re looking at breakeven of 65 bushels per acre for yield. And a price of 11.58. You know, really, you’re going to be what I would you know what I’d say you start looking at on the table, there’s a non 76% and 74 and start bouncing back and forth between those two and say what your yields seem to be.

00;23;29;14 – 00;23;34;19
Dr. Hunter Biram
And so you’re looking at you really need to be at 65 or greater, bushels per acre.

00;23;34;19 – 00;23;56;13
Riley Smith
Now on observation, I do notice that there’s a less, a smaller amount of bushels between each column than like, say, corn or something like that. So we go from like 33 to 38, 38, 44. So thats very small change a small change. In your bushels per acre can make a huge difference.

00;23;56;13 – 00;24;07;05
Dr. Hunter Biram
Sure. Totally could, because I mean, if expectation is 55 bushels an acre, right? I mean, you just go buy more bushels. I mean, you’re looking at almost, a little less than 10% increased.

00;24;07;08 – 00;24;36;15
Riley Smith
Use if you stayed, let’s see 9.76 was roughly pretty close. If you went from 66 bushels to 71 bushels on that price alone, you’re going from $6.11 per acre to $45.15 per acre. So, I mean, if you want, that those, that I just found that interesting because I was just as you flipping through it, looking at the amount of bushels on the top row versus in the change of crops.

00;24;36;17 – 00;25;03;02
Riley Smith
But anyway, anything else guys. Well, I think we’re going to wrap it up. I, this tool is definitely going to be something you want in your arsenal, and, you want to try to take a chance at. And, as Ryan said, better input price or, cost receipts that you have in better bookkeeping you have will definitely help you, be more accurate in this tool.

00;25;03;04 – 00;25;16;29
Riley Smith
Doctor Biram, Doctor Loy, thank y’all so much for jumping on here. And doing this episode, our first episode of 2025 and many more to come. So we’re looking forward to what the new year brings for us. And, hopefully we have a good farming year.

00;25;17;01 – 00;25;27;00
Dr. Hunter Biram
You know, hopefully we don’t see too many exits, but I think we’re going to see some. But hey, you know, we are here as a resource to, you know, do our best to help you stay afloat. I wish that we could change those prices for you, but we just can’t.

00;25;27;03 – 00;25;50;25
Riley Smith
And as they said before, and I’ll mention this again, county meeting season is coming up. Y’all get out to your county meetings. And that will help us, help Dr. Biram, Dr. Loy, and Mr. Scott Stiles that will help determine what we need to do as far as for y’all to, do better and hopefully, you know, maybe make tools to to better y’all’s chances in the farming year as well.

00;25;50;25 – 00;25;57;19
Riley Smith
And the upcoming farming years. Other than that, y’all got to stay tuned to market report. Thanks.

00;25;57;21 – 00;26;26;11
Riley Smith
All right guys, back with you. Market report March 25 Corn current prices at $4.54 per bushel. A month ago, prices at $4.42 per bushel. That’s up $0.12 a year ago prices was at $4.59 per bushel. That’s down $0.05. New contract for rice March 25 Rice current price is at $14.08 per cwt, month ago prices at $15.21 per cwt.

00;26;26;11 – 00;26;57;17
Riley Smith
That’s the down a $1.13, year ago prices was at $17.60 per cwt. That’s down $3.52. March 25 soybeans current price is at $9.95 per bushel. A month ago, price was at $9.96 per bushel. That’s down $0.01 a year agos prices at $12.49 per bushel. That’s down $2.54. July 25 wheat current price is at $5.57 per bushel.

00;26;57;17 – 00;27;25;27
Riley Smith
A month ago, prices at $5.73 per bushel. That’s down $0.16 a year ago price was at $6.31 per bushel. That’s down $0.74. March 25 cotton current price is at six $0.68 per pound a month agos price was at $0.70 per pound. That’s down $0.02 a year agos price was at $0.81 per pound. That’s down $0.13. And your weekly U.S average for peanuts current price is at $484 per ton.

00;27;26;01 – 00;28;06;04
Riley Smith
A month ago, prices at $456 per ton. That’s up $28. A year ago, price was at 444 $446 per ton. That’s up $38. That’s your weekly commodity futures this week. Your input prices this week fertilizer Urea is still at $480 per ton. That’s on the average ammonium nitrate at $465 per ton, ammonium sulfate at $520 per ton, DAP at $740 per ton, triplesuperphosphate at $687 per ton, potash is at $412 per ton, and pellet lime is $225 per ton. Your,

00;28;06;06 – 00;28;32;08
Riley Smith
Diesel prices this week off road diesel $2.65 per gallon. Highway diesel is $3.20 per gallon. And your Mississippi River level at Memphis, Tennessee this week is at 12.74ft, and a year ago was at -1.96ft. I want to thank y’all again for tuning in to another episode of Morning Coffee and AG Markets. We, hope everybody had a great holiday season.

00;28;32;09 – 00;28;39;20
Riley Smith
Glad to be in the 2025 and can’t wait to see what it brings for us, y’all. Tune in next week for another episode. Until then, we’ll catch y’all on

00;28;39;20 – 00;28;53;08
Riley Smith
the flip flop. Bye bye now.

00;28;53;10 – 00;28;53;18