Replies to post #74104 on Hemp Inc (HEMP)

[JustMyLuck]

$200.00 an acre is still better than the $42.00 an acre for wheat and canola at at $6.10 a bushel, and on a high side 30 bushels an acre, you end up with 30 X 6.10 = $183.00 an acre. It appears that hemp will be fine at your projected $200.00 an "unprocessed" acre.

Also, I included a link;

https://osucrops.com/2016/08/11/2017-oklahoma-canola-economics-appear-favorable/

Historically, Oklahoma canola prices have ranged from $1.16 to $5.15 over wheat prices and average $3.68 over wheat price. However, since 2013 canola prices have ranged from $1.16 to $3.15 over wheat prices, suggesting weakening basis for canola. State-average canola yields have ranged from 12 bushels in 2014 to 31 bushels in 2010. USDA National Agricultural Statistics Service has not published the 2015-2016 crop yields yet; however 2016 canola yields are expected to top the 2010 yield. Since 2009, canola yields average 3 bushels less than state-average wheat yields.

I recently prepared budgets for canola and wheat to compute breakeven prices for both crops. Starting with canola with a yield goal of 30 bushels (1500 pounds), a producer can expect to invest about $210 per acre for seed, chemical, fuel, fertilizer, harvest and hauling costs. Realized yields will vary relative to the yield goal. In table 1, the top row of yields represent realized yields and the left column are prices and returns to land, labor, and management in the body of the table. If a producer harvests 30 bushels of canola, the breakeven price is $7.01 per bushel (bottom row). At 35 bushels harvested, canola breakeven drops to $6.07. Given that 2017 canola prices contract are around $6.25-$6.50, positive returns are possible if above average yields are realized. Losses ramp up quickly when yields fail to reach goals. It also important to note that these breakeven prices do not consider the positive impact on wheat yields for one to two years after canola.