Canola may be a viable alternative to wheat for fall planting in parts of the Southwest this fall Budget numbers based on yield goals of 35 bushels per acre show profit potential according to Oklahoma State University economists

Canola may be a viable alternative to wheat for fall planting in parts of the Southwest this fall. Budget numbers, based on yield goals of 35 bushels per acre, show profit potential, according to Oklahoma State University economists.

Canola may deserve a close look for fall planting

OSU budgets favor canola over wheat Canola offers rotation advantages

Wheat prices are low and offer little chance of significant improvement until burdensome global stocks are whittled down considerably, so this could be a good year to consider an alternative winter crop.

Canola could be an option, says Josh Bushong, Oklahoma State University agronomist for the northwest region at Enid.

“Many producers are rethinking or possibly considering planting canola for the first time this year,” Bushong says. “Winter canola has been successfully grown in north central Oklahoma for the past 13 years. In a few instances, drought, spring freezes, or other weather events have limited production, but as I recall, wheat didn’t fare much better in those instances. Past performance has shown that if it is a good year for wheat it will be a good year for canola.”

The advantages stretch beyond the sluggish market for wheat. Producers who plan on moving back to wheat when markets improve may see a yield bump from rotation. “When penciling out budgets for the fall, it is important to factor in not only the production from this season, but also consider how canola can add value to your operation for years to come,” Bushong says.

AGRONOMIC ADVANTAGES

Controlling weeds in a wheat monoculture “can be very challenging,” he says. “Weeds can cause significant economic damage, limiting yield by competition and increasing price discounts at the grain elevator through dockage or foreign material.”

Dockage often may be merely a weight issue, but foreign matter can result in significant price reductions. “I have seen instances where wheat was so trashy that a grain elevator wouldn’t even let the producer dump the load,” Bushong says. “In other cases the wheat had to be sold as mixed grain.”

Weed control options are limited; few herbicide choices are available and the list is growing shorter. “OSU has documented that some populations of ryegrass and cheat in Oklahoma have developed resistance to ALS herbicides that are commonly applied to wheat,” he says.

Rotation offers an effective alternative. “The best option to control winter annual grassy weeds like feral rye, ryegrass, cheat, bromes, jointed goatgrass, rescuegrass, wild oats, etc., is to utilize different herbicide modes of action that are not available in a continuous wheat system.”

Producers have that option with canola, Bushong says. “Graminicides — herbicides that control grasses — such as Select, Assure, and Poast, as well as non-selective herbicides like glyphosate if a Roundup Ready cultivar is used,” are available for canola. “These herbicides have been very effective in controlling hard-to-manage grassy weeds.”

CLEANING UP WEEDS

One year of canola, Bushong says, makes a significant difference, reducing dockage and foreign matter in the following wheat crops by 85 percent to 100 percent. “Many wheat producers have grown canola for the main purpose of cleaning up weedy wheat fields. As a winter broadleaf crop, canola serves this purpose well.”

Other advantages include increased yield in subsequent wheat crops. Studies show a 20 percent to 25 percent increase in wheat forage and 10 percent to 15 percent increase in grain yields.

“Wheat producers have reported a 10 percent to 50 percent yield increase in wheat yields,” Bushong says. “A wheat/stocker operator in Kingfisher County mentioned that his stockers average 50 pounds per head more when grazed on wheat fields that followed canola, compared to stockers grazing on continuous wheat.”

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Adding canola to crop rotations will add economic benefits for years to come, he says. “Sometimes it is difficult to see the value of cleaner fields, more forage, and increased yields. Canola is a great weed management tool, and it can improve our wheat’s quality and quantity.”

BUDGET ADVANTAGE

Currently, budget comparisons favor canola over wheat. Eric DeVuyst, OSU professor and Extension economist, recently prepared budgets for canola and wheat to compute breakeven prices for both crops.

His calculations show that with canola and a yield goal of 30 bushels (1,500 pounds) a producer can expect to invest about $210 per acre for seed, chemicals, fuels, fertilizer, and harvest and hauling costs. Actual yields will vary from yield goals.

“If a producer harvests 30 bushels of canola, the breakeven price is $7.01 per bushel,” DeVuyst says. “At 35 bushels harvested, canola breakeven drops to $6.07. Given that 2017 canola contracts are around $6.25 to $6.50, positive returns are possible with above average yields. Losses ramp up quickly when yields fail to reach goals. It is important to note that these breakeven prices do not consider the positive impact on wheat yields for one to two years after canola.”

The outlook for wheat is not as good, DeVuyst says. “For a wheat yield of 33 bushels (3 bushels more than the canola yield goal in the example above), a producer can expect to spend around $165 per acre on seed, chemicals, fuel, fertilizer, and harvest and hauling costs. If the goal of 33 bushels is realized, the breakeven price is $5.01 per bushel. Futures markets suggest a price of about $3.75 for July 2017 wheat. At $3.75, a producer would need about 46 bushels of harvest wheat to break even when fertilizing for a 33 bushel yield.

“At this point, a $5 wheat price for 2017 is well outside most forecast ranges, making wheat very unattractive.” Breakeven prices are computed for grain-only wheat, DeVuyst notes. “There may be positive returns to wheat/stockers in 2016-2017, but producers should consider price risk management to avoid large stock return losses.”

PRODUCTION ISSUES

Growers have a narrower planting window for canola than for wheat — Sept. 10 through Oct. 10 in Oklahoma to comply with Risk Management Agency insurance schedules. Dates may be slightly different in the Texas High Plains.

Production costs may be slightly higher for canola, compared to wheat, Bushong says. “Nitrogen requirement is about 25 percent higher; phosphorus and potassium are about the same. Harvest costs are similar unless producers pre-condition canola using a draper/swather or applying a desiccant. Those practices add to cost.” Direct harvest is about the same for wheat and canola.

Bushong has seen increased interest in planting canola this fall. Price of wheat, he says, is a big factor. “But some producers are looking at weed management advantages with canola rotation. They also see the grain yield and forage production advantage for subsequent wheat crops.”

Growers have plenty of seed available to plant, with 90 percent of the acreage expected to be Roundup Ready varieties.

“With wheat prices in the low $3 range, and 2017 July futures suggesting sub-$4 new crop prices, Oklahoma producers are looking for an alternative winter crop,” DeVuyst says. “Winter canola may provide a more economically attractive crop. Additionally, several agronomic benefits from rotating canola with wheat, including a 10 percent to 15 percent wheat yield bump following canola, can offer an incentive for canola.

“Winter crops returns will be tight in 2016/2017, but it appears canola is more likely than wheat to generate positive returns to land, labor, and management,” DeVuyst says. “Since individual producer costs will vary, growers should consider their own costs and revenue projections before making planting decisions. Producers are encouraged to contact their local Extension educator for more information on canola and wheat budgets.”

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