Cereal Experts Article: Assessing Your Return on Investment (ROI)

wheat stalk close up

With fluctuating commodity prices season after season, it’s important to consider every input and practice when calculating your ROI. Inputs such as well adapted varieties, seed treatments, and crop protection may offer a good ROI in wheat. In this discussion, we’ll cover how to calculate your ROI and different inputs that can lead to a good ROI.

How to Measure ROI

Calculating ROI

  • Calculation: Bayer’s MyYield Calculator allows you to estimate your total ROI. Enter in your acreage, price/bushel, and inputs to determine the potential ROI for wheat and other cereal crops.
  • Ratio: 3:1 or greater is an optimal ratio to receive a good ROI. For every $1 spent on inputs, ideally you should generate $3 of output. Below is a scenario using the current hard red spring wheat price and results from Prosaro® versus an untreated area in grower demos from a previous year. 

Prosaro Yield Advantage: 11.2 bu/ac
Wheat Price Per Bushel: $6.15
Gross Return: $68.88/ac
Inputs (Prosaro @ 6.5 oz/ac and Applcation Cost): $19/ac

How to Get the Best ROI

While weather is an uncontrollable factor that can affect your ROI, many factors can be controlled to increase ROI during the season.

  • Variety Selection: Researching, selecting and planting the best wheat variety is key to a good ROI. Standability, high protein potential, and high yield potential are three characteristics to consider when selecting a good variety. Planting the same variety, year after year, won’t set you up to have a good ROI.
  • Plant Early: Research has shown that wheat yield will decline 1.5% per day after the optimal planting date.
  • Disease Triangle: A susceptible host such as wheat, disease inoculum, and the right weather environment- warmth and moisture- are three factors that make up the perfect equation for disease. Any missing part will prevent disease from spreading in the fields.
  • Research: Knowing and understanding your field and what weed and disease pests are present will allow you to be proactive in weed and disease management. Good weed and disease pest management will help increase your ROI.

Crop Year 2017 ROI Information

The 2017 crop year has been an interesting one. Growers were able to get into the field early, but as the summer progressed, rainfall was limited in much of North Dakota. With the drought, many growers are harvesting fewer bushels per acre compared to previous years.  However, the market has re-acted somewhat favorably to the drought. Thus, the increased price per bushel will help offset the reduced yields somewhat.

During dry seasons and droughts, watching the commodity price is important because the prices fluctuate. However, even during a drought it is important to maintain good agronomic practices.  Weed control is still important during a drought.  Preventing weeds from going to seed and increasing the weed seed bank in the soil will prove beneficial in years to come.   

As we’ve discussed, inputs are an important part of maintaining your grain quality. Prosaro® is a leaf and head disease fungicide that can help growers receive a good ROI because of its site of action and its ability to protect against disease thereby maximizing yield and improving grain quality even during dry seasons. Huskie® Complete provides all-in-one weed control to address grass and broadleaf weeds. Raxil® PRO Shield provides early-season establishment, disease protection and control of wireworms. Finally, understanding the yield potential and disease susceptibility of your variety will also be important when planning for your next growing season and calculating your potential ROI.

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