Iowa State University has released its cost of production estimates for crops in 2010. The publication is released annually, and the new one is called Estimated Costs of Crop Production in Iowa—2010 FM-1712 Revised. The estimated costs of corn, corn silage, soybeans, alfalfa and pasture are based on data and information gathered from several sources.
“These estimates are typical costs and are only intended to be guidelines,” says Mike Duffy, the ISU Extension economist who gathers the information and puts the estimates together with the help of other ISU specialists. “The actual costs farmers end up paying to produce a crop will vary considerably from farm to farm. We encourage you to look at our estimates and then make your own estimates for your farm to see how they compare,” he says.
Your costs can be entered into the column that is titled “Your Estimates” in the publication or on the spreadsheet if you are using that online tool. Electronic spreadsheets for developing crop production budgets are available on the ISU Ag Decision Maker site www.extension.iastate.edu/agdm.
ISU estimated costs are based on data from several sources
ISU’s estimated costs are based on information gathered from several sources. These sources include the annual Iowa Farm Business Association record summaries; production and costs data from the Departments of Economics, Agricultural and Biosystems Engineering and Agronomy at Iowa State University; and a survey of selected agricultural cooperatives and other input suppliers around the state.
The crop budget tables are presented in a “pdf” file accessed by visiting www.extension.iastate.edu/agdm/crops/html/al-20.html. In his “Breakeven Workshop for Crops,” Duffy reports the following:
* Economic cost of production per acre: $386.57 for corn, $379.58 for soybeans and $348.82 for hay
* Economic cost of production per bushel or ton: $2.74 for corn, $8.25 for beans and $87.21 (ton) for hay
* Economic cost breakeven per acre (after USDA payments and other income): $356.57 for corn, $354.58 for beans and $348.82 for hay.
These cost estimates are representative of average costs for farms in Iowa. Very large or small farms may have lower or higher fixed costs per acre, he says.
Production costs will vary from farm to farm
Due to differences in soil potentials, quantity of inputs used and other factors, production costs will vary from farm to farm.
Price shifts of inputs can change production costs in both the short and long run.
The data reflect average cost of purchased inputs and a return to land and labor resources, but do not provide a margin for profit or a return to management. They reflect production costs only and do not include costs of storage.
Labor has been treated as a fixed cost since most labor on Iowa farms is supplied by the operator, family or permanent hired labor. However, when deciding among alternative crops, labor should be considered a variable cost.
The wage rate used here is $11 per hour. The hours assumed per crop are presented in the budgets.
The hours-per-crop acre includes not only the fieldwork but also time for maintenance, travel and other activities related to crop production. The land charge is based on rent equivalent. Owned land may require a greater or lesser cash outlay.
In the short run, cash income must be sufficient to pay cash costs including seed, fertilizer, chemicals, insurance, cash rent and hired labor, as well as machinery fuel and repairs, and interest on operating capital. In the long run, income should be sufficient to pay all costs of production for resources to be used in their most profitable alternative.
How the various cost factors are figured
Corn yields reflect rotation effects. Fertilizer rates have been adjusted to reflect current data on removal and application rates.
Crop insurance costs reflect the mix of multiple peril, revenue and hail insurance as well as non-insurance acres.
Machinery costs reflect both new and used equipment. The machine operations assumed are based on the 2000 Crop Production Practices Survey conducted by the Iowa Agricultural Statistics Service. The Estimated Machinery Costs table can be used to budget other tillage and harvesting systems. Estimates represent typical costs and are only intended to be guidelines.
If you are using the printed publication, you can enter your own cost estimates in the column for “Your Estimates.” Electronic spreadsheets for developing crop-production budgets are also available. They are on the Ag Decision Maker site www.extension.iastate.edu/agdm.
Budgets for hay and pasture also available
Budgets for alfalfa hay establishment with an oat companion crop and by direct seeding are included in the publication. Annual production costs for established alfalfa or alfalfa-grass hay as well as a budget for maintaining grass pastures are included as well. Additional pasture establishment budgets are published in ISU Extension publication AG-96, “Estimated Costs of Pasture and Hay Production.”
Two low-till budgets, one for corn and one for soybeans, are included. The major differences between the low-till and conventional budgets are the preharvest machinery, labor, herbicide and seeding costs. The soybean budgets are for herbicide-tolerant varieties. A strip-till budget is also included.
Individual crop budget tables available online
Individual budget tables are available at:
* Corn following corn: www.extension.iastate.edu/agdm/crops/xls/al-20cfc_tbl1.xls
* Corn following soybeans: www.extension.iastate.edu/adgm/crops/xls/al-20cfs_tbl2.xls
* Corn silage following corn: www.extension.iastate.edu/agdm/crops/xls/al-20cornsilage_tbl3.xls
* Herbicide-tolerant soybeans following corn (herbicide tolerant): www.extension.iastate.edu/agdm/crops/xls/al-20sfc_tbl4.xls
* Low-till corn following soybeans: www.extension.iastate.edu/agdm/crops/xls/al-20lowtillcfstabl6.xls
* Low-till drilled soybeans following corn: www.extension.iastate.edu/agdm/crops/xls/al-20lowtillsfctbl6.xls
* Strip-till corn following soybeans: www.extension.iastate.edu/agdm/crops/xls/al-20striptillcfstbl5.xls
* Strip-till herbicide-tolerant soybeans following corn: www.extension.iastate.edu/agdm/crops/xls/al-20striptillsfctbl5.xls
* Alfalfa or alfalfa-grass hay budget: www.extension.iastate.edu/agdm/crops/xls/al-15-20haybudgetonly.xls
* Alfalfa or alfalfa-grass hay with oat companion crop budget: www.extension.iastate.edu/agdm/crops/xls/al-15-20hay-budgetonly.xls
* Oat or other small grain budget: www.extension.iastate/edu/agdm/crops/xls/al-15-20oatsmallgrainbudget.xls
* Improved grass pasture: www.extension.iastate.edu/agdm/crops/xls/al-20maintgpimprovgrass_tbl9.xls
* Improved grass-legume pasture: www.extension.iastate.edu/agdm/crops/xls/al-20maintpimprovgrleg_tbl9.xls
* Grain-drying cost calculator: www.extension/iastate.edu/agdm/crops/xls/al-20drying-costcalculator.xls
* Crop Rotation Summary: www.extension.iastate/edu/agdm/crops/xls/al-20croprotation.xls
* Breakeven worksheet for crops: www.extension/iastate/edu/agdm/crops/xls/al-20costprodgrain.xls