Comparing Representative Comparing Representative farms from the Midwest US farms from the Midwest US

to Germanyto Germany

Luke IsemingerLuke Iseminger

If you don’t know what you’re talking about at If you don’t know what you’re talking about at least make yourself look good.least make yourself look good.

--Max Schmidt--Max Schmidt

International Attempt to compare production International Attempt to compare production systems across worldsystems across world

In our context, benchmarking means that we are In our context, benchmarking means that we are comparing typical farms, production systems comparing typical farms, production systems and enterprises and their economics and enterprises and their economics horizontally (at one specific point of time) and horizontally (at one specific point of time) and vertically (over time). vertically (over time).

What is a typical farm?What is a typical farm?This is probably the most frequent question raised to the This is probably the most frequent question raised to the

Networks. Networks. A typical farm isA typical farm is an existing farm or a data set describing a farm, an existing farm or a data set describing a farm, in a specific region which represents a major share of output in a specific region which represents a major share of output

for the product considered, for the product considered, running the prevailing production system for the product running the prevailing production system for the product

considered, considered, reflecting the prevailing combination of enterprises as well as reflecting the prevailing combination of enterprises as well as

land and capital resources, land and capital resources, as well as the prevailing type of labor organisationas well as the prevailing type of labor organisation

http://www.agribenchmark.org/methods_typical_farms.htmlhttp://www.agribenchmark.org/methods_typical_farms.html

Comparison MeasuresComparison Measures

-Monetary research is done in US$-Monetary research is done in US$--.79 € to US$1--.79 € to US$1

-All land comparison is done in ha-All land comparison is done in ha-All Production done in t/ ha-All Production done in t/ ha-Oilseed production is compared to rapeseed-Oilseed production is compared to rapeseed

--SB to Rapeseed is .930:1--SB to Rapeseed is .930:1-Land costs were not factored into the research-Land costs were not factored into the research

Representative Iowa FarmRepresentative Iowa FarmInformation on the typical farmInformation on the typical farm Iowa, USAIowa, USA US700IA – USA, 700 ha in Iowa US700IA – USA, 700 ha in Iowa

1540 acres1540 acres All machinery belong to the farm All machinery belong to the farm Crop rotation: Corn – Soybeans Crop rotation: Corn – Soybeans Fertilizer level (nitrogen): 165 kg N/ha Fertilizer level (nitrogen): 165 kg N/ha Yield level corn: 11 t/ha (178 bu./ acre)Yield level corn: 11 t/ha (178 bu./ acre) Market price corn: 99 €/t Market price corn: 99 €/t

Tillage system: – Conservation Tillage - CornTillage system: – Conservation Tillage - Corn

Representative German FarmRepresentative German FarmInformation on the typical farmInformation on the typical farm Sachsen-Anhalt, GermanySachsen-Anhalt, Germany DEDE1300SA – Germany, 1300 ha in the region Sachsen-Anhalt 1300SA – Germany, 1300 ha in the region Sachsen-Anhalt Specialized cash crop farm Specialized cash crop farm Crop rotation:Crop rotation:

I: Sugar beet - winter wheat - winter wheat/winter barley - pea I: Sugar beet - winter wheat - winter wheat/winter barley - pea - winter wheat- winter wheatII: Winter canola-winter wheat-winter wheat / winter barley II: Winter canola-winter wheat-winter wheat / winter barley

Fertilizer level (nitrogen): 185 kg N/ha Fertilizer level (nitrogen): 185 kg N/ha Yield level winter wheat: 8,8 t/ha Yield level winter wheat: 8,8 t/ha Market price winter wheat: 125 €/t Market price winter wheat: 125 €/t Tillage system: Conservation Tillage – Wheat Tillage system: Conservation Tillage – Wheat

Operating CostsOperating Costs Operating costs are key to all production Operating costs are key to all production

systems. They are a good indicator of the systems. They are a good indicator of the profitability of the operation. profitability of the operation.

Western hemisphere producers spend only a Western hemisphere producers spend only a fraction of what European producers spend on fraction of what European producers spend on operation costs.operation costs. The Iowa producer had just shy of $200/ ha The Iowa producer had just shy of $200/ ha

operating costsoperating costs The German operation had just below $550/ ha The German operation had just below $550/ ha

operating costsoperating costs

Production OperationsProduction Operations The Iowa producer had anywhere from 4-6 The Iowa producer had anywhere from 4-6

operations to prepare seedbed and apply operations to prepare seedbed and apply chemicalschemicals

The German producer had anywhere from 20-The German producer had anywhere from 20-22 operations to prepare the seedbed and apply 22 operations to prepare the seedbed and apply chemicals and fertilizer, making these costs chemicals and fertilizer, making these costs 3.15X higher3.15X higher

Subsidies/ InsuranceSubsidies/ Insurance 250 to 300 €/ha Average subsidies received 250 to 300 €/ha Average subsidies received

from German government ($89.77-$107.72/ from German government ($89.77-$107.72/ A)A)

Hail Insurance is the only type of crop Hail Insurance is the only type of crop insurance available to German farmers at the insurance available to German farmers at the present timepresent time Premiums are from roughly 30 to 40€/ ha ($10.77-Premiums are from roughly 30 to 40€/ ha ($10.77-

$14.36/ A)$14.36/ A)

Subsidies/ InsuranceSubsidies/ Insurance Direct PaymentsDirect Payments

For each commodity, the direct payment for each crop For each commodity, the direct payment for each crop year equals 85 percent of the farm's base acreage year equals 85 percent of the farm's base acreage timestimes the farm's direct payment yield the farm's direct payment yield timestimes the direct the direct payment rate.payment rate.

Counter-cyclical PaymentsCounter-cyclical Payments Counter-cyclical payments provide support counter to the Counter-cyclical payments provide support counter to the

cycle of market prices as part of a "safety net" in the event cycle of market prices as part of a "safety net" in the event of low crop prices. Counter-cyclical payments for a of low crop prices. Counter-cyclical payments for a commodity are only issued if the effective price for a commodity are only issued if the effective price for a commodity is below the target price for the commodity. commodity is below the target price for the commodity.

QUESTIONSQUESTIONS??

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