As of Tuesday, Dec. 2, the drought monitor report indicates no real change from last week overall with some improvement along the Missouri border. The recent rains leave most of the state in very good shape heading into mid-December. The six-to ten-day outlook (Dec. 9 to 13) indicates a 40 to 60% chance of leaning below normal for temperatures and a 30 to 50% chance of leaning below normal for precipitation. The eight to 14-day outlook (Dec. 11 to 17) indicates a 40 to 60% chance of leaning above normal for temperatures and 30 to 50% chance of leaning above normal for precipitation.

Last week, we discussed the economic challenges facing crop producers. The part we didn’t have space for is the difference between crop production and many other industries and why it presents a real challenge for crop producers. First, how a “normal” industry produces its product.

Let’s say you are Apple and producing iPhones. Your costs of production involve fixed and variable costs. Fixed costs might include the cost of design, the cost for manufacturing equipment, the building, etc. Variable costs would include the materials to make the phone and say labor. Your fixed costs (X amount of dollars) won’t change so the more units you produce, the lower the fixed cost per unit. Say they invested $10 million dollars in fixed costs and the produced one phone. The fixed cost for that phone is $10 million. Now say they produced 10 million phones. The fixed price per phone is $1. For variable costs, the more you produce, the larger your variable costs. Now let’s say retail prices are lower than you would like and input prices higher. Apple, GM and any other manufacturer can simply stop producing and shut down the line until wait for the surplus to go down and/or input prices to go down. This is a simplification but hopefully you get the gist.

Now let’s become a wheat producer. You also have fixed costs of production such as equipment, buildings, property taxes and rental of loan payments on the land. These also become a smaller cost of production the more you produce. Your variable costs include items like your inputs, fertilizer, pesticides, seed, fuel, perhaps irrigation, etc. Here’s where the difference comes in. You have an idea of your APH (average production history) and a yield goal in mind. This is based on a long-term average for that field combined with average climate conditions. You base your variable costs (inputs) on that estimate. However, unlike our apple example, you really don’t know how much you will produce. Weather and pests can either lower or raise your yield. If you see a surplus or shortage developing, it’s pretty hard to adjust with the crop in the ground. In our wheat example, you have a nine- or ten-month investment of time and have to wait and see. With low prices you will incur storage costs. With high prices you can’t suddenly produce more.

One last note is in order. The per acre production costs for wheat in Kansas for the 2025 harvest is between $340 - $380 per acre. Naturally, this amount will vary. As this is written the cash price is around $4.40/bushel. The break-even yield is 75 bushels/acre at $340 and 86 bushels/acre at $380. Without some assistance from the USDA, it’s easy to see how it’s hard to stay in business.

Dr. Victor L. Martin is the agriculture instructor/coordinator for Barton Community College. He can be reached at 620-792-9207, ext. 207, ormartinv@bartonccc.edu.