Ep. 21 2025 Crop Enterprise Budgets Review

00;00;30;18 – 00;00;48;19
Riley Smith
their Black Friday shopping. But we got Breana Watkins in with us. We’re going to let her introduce herself, but I’ll just go ahead and tell you she is the one. For all our producers out there, she is the one that manhandles the crop enterprise budgets for the state. So, Brianna, how are you?

00;00;48;25 – 00;00;50;23
Breana Watkins
Well, I’m doing pretty good. How about yourself?

00;00;50;25 – 00;00;58;29
Riley Smith
Doing 110. So why don’t you just, tell us who you are? Where are you from? Give us a little background, and then we’ll talk about budget.

00;00;59;02 – 00;01;25;09
Breana Watkins
All right. Well, I grew up over northeast Arkansas around Jonesboro. I my dad was predominantly a rice farmer. We also grew some soybeans. A little corn, I can remember. I have my Uncle grew some Peanuts some. And, But anyways, I graduated from Westside High School, then moved off and went to Fayetteville to get my bachelor’s and masters.

00;01;25;11 – 00;01;46;22
Breana Watkins
Both in agriculture, of course. And then ended up I came back and worked in Newport for a little while as a grain merchant advisor, with Holden Connor. And then, went to Cavanaugh Financial and got my series three license so I could be, a broker for a little while and trade commodities, and then finally moved over to extension.

00;01;46;24 – 00;02;12;26
Breana Watkins
I saw it as a program associate and got bumped up to the instructor level. And now I’m the head of the budgets. I guess you could say, I get to create the budgets and, you know, control kind of how they’re developed and what goes in them. And so I take it on as a big undertaking, or as a big task, just because I know how important it is, you know, especially these days with financial, situation, the economy.

00;02;12;28 – 00;02;26;04
Breana Watkins
So, yeah, that’s that’s basically kind of where, where I’m at now. I’m 36. I love to garden. That’s my big thing. So if you ever see my house, you will notice because there are plants everywhere. But yeah.

00;02;26;07 – 00;02;30;12
Riley Smith
I think that’s just farm blood. I think if you if you don’t farm, you got to grow something, so.

00;02;30;12 – 00;02;31;02
Breana Watkins
Right, right.

00;02;31;09 – 00;02;35;14
Riley Smith
But, So where are you guys? So where did you say where you’re at in northeast Arkansas?

00;02;35;14 – 00;02;53;29
Breana Watkins
I’m in Jonesboro. Yeah, that’s. I grew up there. I, I when I came back, I first was in Newport for a little while, but, I ended up I moved back home to Jonesboro, live right on that front on the edges of the city. And so it’s nice. I got a little, I mean, a little neighborhood and have two dogs, so I enjoy it.

00;02;54;02 – 00;03;10;02
Riley Smith
Well, good. Good. Well, today you’re going to be talking about crop enterprise budgets. And and I guess my first question would be what do you see as far as 2024 to 2025 with what do you see different that stands out to you about the crop energy and enterprise budgets?

00;03;10;04 – 00;03;30;16
Breana Watkins
Well, and that’s the main thing is I’ve been it’s made me really nervous of seeing how negative the budgets are. And I hate producing anything that would, you know, deter someone from, you know, producing or, you know, farming the land. And and so that was a big, kind of, a hang up for me was, you know, did I want to put out budgets that were negative?

00;03;30;16 – 00;03;46;13
Breana Watkins
I mean, there’s there’s no way around it, you know? But at the same time, too, it was just it was really hard for me to put them out there. But I also went new and realized that there’s a lot of, ways to use the budget as a tool to make sure that you’re not in the negative.

00;03;46;16 – 00;04;09;11
Breana Watkins
Especially like if you’re, you know, this isn’t a year, probably to buy new equipment or to buy more equipment. I mean, replace, obviously, if you must. But, it’s it’s a time to, you know, so if we’re not for not really, you know, growing in our fixed expenses, we can, you know, hunker down and and make it past the next year, hopefully, because I’m not seeing it as, as a big breaking point.

00;04;09;11 – 00;04;30;00
Breana Watkins
I mean, we all know the commodity markets can go crazy. So hopefully, you know, we get some nice runs, upward and downward. But and it it will a lot will depend on, you know, weather and, and just, you know what crops actually get planted. This next year. So you know, the spring everyone I’m sure, will be watching the weather.

00;04;30;00 – 00;04;58;08
Breana Watkins
Everyone’s watching you right now in South America to see how that’s going. You know, we’ve seen Brazil really take off in their production capabilities as far as, being able to ship their products. So that’s, that’s, you know, definitely not helping our markets any. But, you know, there’s always chances. And that’s the thing is, is being prepared and knowing what your costs are, because if you don’t know what your cost per acre are, you don’t know what your breakeven is.

00;04;58;10 – 00;05;14;02
Riley Smith
Correct. Right. So is there anything as far as operating or for, I guess, a production standpoint is on the input side, equipment sales. What what took a bigger hit going into 2025?

00;05;14;05 – 00;05;34;19
Breana Watkins
Really? And I’m trying to think it would probably be the biggest hit that I’ve seen has been in seed cost. They’ve, you know, seemed to increase more than the other, categories and inputs. But really all inputs are, you know, going up a little, except for fuel and fertilizer. They have come down some from last year.

00;05;34;22 – 00;05;43;29
Breana Watkins
And that’s just because, you know, the Ukraine situation’s kind of eased up. So, so, it’s nice big news, I guess. And that’s what caused the markets to really rally.

00;05;43;29 – 00;06;09;28
Riley Smith
Right. Definitely saying, well, because, I gather those fertilizer prices each week and, definitely have seen, like area gone down from 2021, 2022 when we saw nearly, you know, $1,300 per ton, and now we’re down to $500 per ton from, you know, around that number, that it seemed like it floated around 780 to $810 per ton on the average.

00;06;10;00 – 00;06;20;02
Riley Smith
But yeah. So, is there anything that you specifically want to talk about as far as the budgets or wanting to let our producers know?

00;06;20;04 – 00;06;48;27
Breana Watkins
Really, you know, I, I’m always available for questions or for if you need help with, I know they can be tedious and working with them sometimes. And so that’s the reason there is kind of two small budgets available. There’s one that says it’s a leased budget. You can always change that back to a 0% if you’re an owner and use that budget, because that budget falls a little easier to work with as far as you know, going through and changing your specific inputs, and in like amounts and things.

00;06;48;29 – 00;07;13;10
Breana Watkins
The only thing that budget doesn’t really do is to show you machine cost. And there’s also a, it’s the 2025 machinery costs per acre. There’s one that’s broken down per acre and per hour. It’s on the website. UAE student edu and, if you just search crop budgets, I believe it’s like the second or third one down.

00;07;13;10 – 00;07;41;25
Breana Watkins
If you go to the crop budget page, it’s it’s all on there. And so that’s a good, tool to use. Also if you’re custom harvesting or, you know, doing any kind of custom, work for people, it’s, it gives you the per acre cost. And so you can kind of know, what to charge. And usually I just when guys are asking me, you know, how to use that or what, what I think that they should charge, I say, you know, a 10%, you know, as a, as a guide because you need to pay yourself, obviously, to be driving the equipment.

00;07;41;27 – 00;08;05;17
Breana Watkins
And that’s something we don’t have managerial costs in the budgets. And so, you know, one thing is thinking of, is it cost of living? I mean, there’s there’s no budget that includes the manager cost. And so, with knowing that there are a negative and that you must, you know, you’re going to have to live, you’re going to have to pay for a home, hopefully shelter and food and water.

00;08;05;19 – 00;08;19;13
Breana Watkins
But that’s the thing is, is trying to figure out how to go about it and at least to, you know, you want to break even. That’s that’s the main goal here. And so, anything we can do to help, please, you know, let us know and ask questions.

00;08;19;16 – 00;08;37;13
Riley Smith
So, I had a question and, I’m trying to trying to find it again, but we’re going to talk, oh. I know what it was he was talking about, trying to figure out that custom harvest cost about. And you said that that, link allowed you to do it on a per acre or per hour.

00;08;37;13 – 00;08;43;21
Riley Smith
Does that help you calculate depreciation and, housing tax insurance on your equipment?

00;08;43;21 – 00;09;07;15
Breana Watkins
Can it it it doesn’t it doesn’t have that included. But now in the budgets there is some, you know, you can go through and look at the machine. It’s like the actual calculations and it has a depreciation on it. Our budgets are set up more. So instead of added depreciation as we’re looking at, using that depreciation, you’re putting that money back to back to replace that equipment.

00;09;07;15 – 00;09;23;02
Breana Watkins
And so it’s kind of the nuts, you know, in the fixed cost area. So you know, that’s where you know, obviously everyone’s going to say oh well I can cut that out. You know, this this year we’re going to have none. Unless you I mean, obviously there’s, there’s going to be some kind of cost of equipment if you use anything.

00;09;23;02 – 00;09;48;08
Riley Smith
So yours so I haven’t I will I have looked at the operating side a lot because that’s when I pulled that data from, as far as the operating expenses go, when I first started here, I know when I was at the University of Arkansas in grad school, that when I worked for Doctor Michael Popp and I was doing my basically like a farm business management project, but that was my thesis, even though I was a non thesis student, that was my research.

00;09;48;11 – 00;10;06;14
Riley Smith
I used the Mississippi State budget generator a lot, and that one had, like when we were to count, calculate the depreciation on equipment, you would go there and you would have your fixed input cost. And so that way you would do that mathematical equation. And it’s been a it’s been a ten months I’ve been in school people.

00;10;06;14 – 00;10;08;09
Riley Smith
So.

00;10;08;11 – 00;10;09;28
Breana Watkins
You wouldn’t years.

00;10;10;01 – 00;10;18;17
Riley Smith
You would do that to, to calculate your depreciation. So I didn’t know if, if that link would allow a producer to be able to do that. But that’s good information to know.

00;10;18;21 – 00;10;27;03
Breana Watkins
Well it has, it has so on there it has it broken down. It has like, you know, your fixed costs and it’ll have your repairs and maintenance costs, your labor costs, your fuel costs.

00;10;27;03 – 00;10;41;24
Riley Smith
You know, you just have to go. You have to just go get, that equation that I’m talking about to calculate that. So anyway, moving on. Is there any statistics or numbers you’re wanting to share with anybody or share with everyone?

00;10;41;26 – 00;11;04;09
Breana Watkins
You know, I wish there was some kind of, like, magic number. I, I do know that, it’s it was. I’ve been told that, you know, and I’m sure you’ve probably mentioned this, that there’s been a already a 20% reduction in the amount of producers in Arkansas and, and that that to me is is a scary sign because I, I am a younger female in agriculture.

00;11;04;09 – 00;11;43;07
Breana Watkins
But, you know, I like seeing younger producers, coming in, stepping in and, and willing to kind of get ready to be the next generation. And, you know, and knowing that we’re going backwards is, is a big as a big hang up for me just because I, I am so passionate about agriculture and especially with rice and all, just because of my background and, you know, I’m hoping that that’s something that we can see in the next, you know, if not this year, because, you know, but the next year, start trying to change that number and going back to the positive and bringing people back to the farm and being in agriculture.

00;11;43;10 – 00;12;06;23
Riley Smith
Yeah. I’m the same way. I’ve got a few buddies, man. That’s around the same age I am. I’m fixing to be 26 here and December 21st, actually. And, I got a few buddies that are 27, 28 years old that are farming. And it’s definitely, there’s fewer, fewer and fewer of them, coming up, but definitely, definitely want to see more of that.

00;12;06;23 – 00;12;13;03
Riley Smith
But, well, I guess, I guess that’s everything.

00;12;13;06 – 00;12;14;00
Breana Watkins
Hey, that sounds good.

00;12;14;00 – 00;12;17;21
Riley Smith
Unless unless you got unless there’s more you want to talk about or you just want to chit chat.

00;12;17;28 – 00;12;20;06
Breana Watkins
No, I mean, I think, hey, but we’re doing good.

00;12;20;06 – 00;12;28;23
Riley Smith
Awesome. Okay. So, well, flipping over, just talk about you real quick. So you said you have two dogs. What’s your dog’s names?

00;12;28;26 – 00;12;30;09
Breana Watkins
Tilly and Lucy.

00;12;30;13 – 00;12;32;25
Riley Smith
I know, I know another Tilly. Is it a border collie?

00;12;32;26 – 00;12;52;16
Breana Watkins
No. She’s half. We only have Beagle. Oh, and then Lucy named her after a song, but I didn’t. I thought the lyrics. And Lucy, you are mine. My, diamond. And so I was like, oh, that’s so cute. I want to name my dog Lucy. Well, the song. Well, I looked at the lyrics like a couple of years when she was old.

00;12;52;19 – 00;12;59;22
Breana Watkins
She, I looked it up and it says, listen. And I was like, well, she never listens. So that was funny. I was like, I don’t listen either, I guess.

00;12;59;25 – 00;13;10;06
Riley Smith
But yeah, we’ve got two dogs to fixing to have the third one. But yeah, my, my fiance, I, she loves Australian Shepherd.

00;13;10;06 – 00;13;10;22
Breana Watkins
So they’re.

00;13;10;22 – 00;13;19;27
Riley Smith
Pretty. They are pretty. And we’ve got some pretty dogs. I ain’t going to lie. Love them to death, but, so you grew up farming?

00;13;19;29 – 00;13;30;08
Breana Watkins
Did driving tractors and everything. Actually, probably that was one thing is I always would wreck the tractors, I would never. I hated tractor driving. I would get so nervous about it.

00;13;30;15 – 00;13;33;18
Riley Smith
You wouldn’t think make a very good Farmer.

00;13;33;21 – 00;13;54;14
Breana Watkins
Well, okay, so I was point one time I was pulling like, you know, my grandpa, all he would spend about 20 seconds teaching me how to drive the tractor. Oh, and then he didn’t teach me how to stop it. And I was, you know, in a diagonal trying to disc and didn’t quite leave enough room to, you know, in the corner to bring the disc around and got it kind of caught up in the woods.

00;13;54;14 – 00;14;08;29
Breana Watkins
Drug a tree about halfway down the field before I figured out how to get the thing stopped. But we did. And then I was, you know, of course, crying in a mess because I’m a girl and I have emotions, and my dad just comes and he’s like, oh, I just took the tire off to go fix the tire on the disc.

00;14;08;29 – 00;14;30;17
Breana Watkins
And he’s like, keep going. You got to keep going. So that was no. And another time I, actually was pulling a tractor into the shop and there was another tractor in there back then that was brand new. They had just Greenway had just come and dropped it off and parked it in the shop. And here I come in and then again, didn’t know how to start the tractor, didn’t get it out of gear.

00;14;30;17 – 00;14;42;17
Breana Watkins
Good was standing on the brake, pulling on the steering wheel, trying to get stop and just hidden waiting away at the front, just wham! Well, so my dad was a little bit angry with me about that one too, but that’s what they get for not teaching me how to stop them.

00;14;42;20 – 00;14;44;23
Riley Smith
Oh well, did y’all drive older tractors.

00;14;44;23 – 00;15;00;18
Breana Watkins
No, they were they were pretty. I mean, they were pretty new. I actually learned how to drive on a case steiger and I liked it because it had pegs, and I’m really short, and it has a two pegs on the side, so I could rest my feet because the John Deere didn’t have like a case steiger.

00;15;00;19 – 00;15;01;28
Riley Smith
That’s a big tractor.

00;15;02;01 – 00;15;03;15
Breana Watkins
Yeah. And that was it.

00;15;03;18 – 00;15;06;10
Riley Smith
Was it a 400 or 450 or 500?

00;15;06;10 – 00;15;17;23
Breana Watkins
I think it was. Well I was thinking like 450 or it might have been, it might have been a 500, but it was definitely a bigger one. And, you know, did the pivoted in the middle and everything?

00;15;17;25 – 00;15;21;06
Riley Smith
The center pivot was you were you puliing pans?

00;15;21;09 – 00;15;24;05
Breana Watkins
No, I was just. That was me and a disk.

00;15;24;07 – 00;15;26;08
Riley Smith
That’s a big disk big boy.

00;15;26;08 – 00;15;38;17
Breana Watkins
Oh, well, I think it was like a 40ft or something. I mean, it was a big, And that’s the thing is, like, they they just kind of threw me out there, and you’re supposed to if you’re a farmer’s daughter, you’re just supposed to be bred with that. And you know. Yeah, but it’s not.

00;15;38;23 – 00;16;10;04
Riley Smith
That was like me when I, the first tractor I ever learned how to drive was a John Deere 4430 And it was, Powershift and so, I mean, you got to clutch it and then you reach over and then you got you come down and then you’ve got like basically like t gear. So you go up first, third, reverse, and you pull it back in a neutral come down and you get the second, fourth or second reverse, and then you just keep going down and the first time I ever drove that, I remember I was sitting on the brake and I couldn’t get it to stop.

00;16;10;04 – 00;16;30;27
Riley Smith
We have to get the first question to stop. Yeah. And, I almost ran, ran the forks to my dad’s one ton And then it wasn’t long after that the my dad did run the forks. Through his one ton It was hilarious. But. Oh, good deal, good deal. Well, I want to thank you for, making the drive from Jonesboro today.

00;16;30;27 – 00;16;40;20
Riley Smith
Come talk to us about enterprise budgets and, all of our listeners out there. If you if you don’t look at the enterprise budgets, go check them out. Where can you find those?

00;16;40;20 – 00;16;51;18
Breana Watkins
At, the extension website. And that’s uaex.uada.edu. And then you just search for crop budgets. And I think it’s like the second or third tab down.

00;16;51;18 – 00;16;54;22
Riley Smith
And so y’all just just release those. Correct?

00;16;54;22 – 00;17;06;02
Breana Watkins
Yes. The 2025 budgets were just released, within the past couple of weeks. And they’ve been kind of been unveiling slowly, but, we’ll have some more stuff available after the first of the year, I think.

00;17;06;02 – 00;17;10;10
Riley Smith
And then after you talked, I think the only thing that you’re really waiting on is cotton prices.

00;17;10;16 – 00;17;17;19
Breana Watkins
Yes. And that’s and that’s we went ahead and released them. They just had the 2024 seed price. And that’s you know that’s just kind of part of it.

00;17;17;20 – 00;17;39;22
Riley Smith
I haven’t talked to Scott, but I’m going to say we’re roughly around probably 80% done with harvest. I noticed a lot of the cotton around our house have started getting baled. So I would say they’re getting real close to being done. Usually mid December. Everybody’s pretty much got it wrapped up. So anyway. Well, thank you again, Breana, for coming in.

00;17;39;22 – 00;17;45;23
Riley Smith
And y’all stay tuned for my market report. Thanks.

00;17;45;26 – 00;18;13;21
Riley Smith
All right guys, back with the market for December 24, corn current prices at $4.16 per bushel. A month ago, price was at $4.11 per bushel. That’s a up $0.05. year agos prices at $4.52 per bushel. That’s down $0.36. November 24 rice current prices at $15.17 per cwt a month ago prices at $15.06 per cwt. That’s up $0.11 a year agos prices at $17.38 per cwt.

00;18;13;24 – 00;18;43;14
Riley Smith
That’s down $2.21. November 24 soybeans current price is at $9.89 per bushel a month agos price is at $9.86 per bushel. That’s up $0.03 a year ago prices at $13.47 per bushel per bushel. And that’s down $3.58. July 25 wheat current prices at $5.66 per bushel. A month ago prices at $5.98 per bushel. That’s down $0.32 year agos prices at $6.02 per bushel.

00;18;43;14 – 00;19;07;25
Riley Smith
That’s down $0.36. December 24t Cotton current prices at $0.74 per bushel or per pound. Excuse me, a month ago prices at $0.70 per pound. That’s up $0.04 a year agos prices at $0.79 per pound. That’s down $0.05 weekly U.S average for peanuts prices at $480 per ton month agos prices at $502 per ton. That’s down $22.

00;19;07;27 – 00;19;30;25
Riley Smith
Year agos prices was at $532 per ton. That’s down $52. Thats you commodity futures this week. Your input prices this week Urea is at $480 per ton. Ammonium nitrate at $465 per ton, ammonium sulfates at $520 per ton. DAP is at $740 per ton. Triple Super Phosphates is $687 per ton. Potash is at $412 per ton and your pellet lime.

00;19;30;25 – 00;19;52;19
Riley Smith
This week’s at $225 per ton. Your diesel prices this week. Off road diesel $2.49 per gallon. Highway diesel is at 300, $3.18 per gallon. You’re Mississippi River level this week at Memphis, Tennessee. Current levels at -1.63ft and a year ago is at -5.85ft. I want to thank you all again for tuning in to another episode of Morning Coffee and AG Markets.

00;19;52;19 – 00;19;58;22
Riley Smith
We hope you enjoyed your morning cup of Joe. If you joined in on another episode and enjoy the rest of your workweek. So until next time.

00;19;58;23 – 00;20;14;25

Will catch y’all on the flip flop, bye bye now.