IOWA STATE EXTENSION RELEASES ESTIMATED COST OF 2018 CROP PRODUCTION
Jan. 26, 2018
Source: Iowa State University news release
The estimated costs of corn, corn silage, soybeans, alfalfa and pasture maintenance in this report are based on data from several sources. They 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.
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.
Due to differences in soil potentials, quantity of inputs used and other factors, production costs will vary from farm to farm. Price shifts for 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 because 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 $14.00 per hour.
The hours assumed per crop are presented in the budgets. The hours per crop acre include not only the ﬁeld work 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.
Corn yields reﬂect rotation effects. Fertilizer rates have been adjusted to reﬂect current data on removal and application rates. Crop insurance costs reflect revenue crop protection at an 80 percent coverage level for a typical farm in Iowa.
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 and Iowa State University Extension and Outreach publication Estimating the Field Capacity of Farm Machines (AgDM File A3-24). 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. Actual costs will vary considerably and can be entered in the column for "Your Estimates." Electronic spreadsheets for developing crop production budgets are available on the Ag Decision Maker website, www.extension.iastate.edu/agdm.
Budgets for alfalfa hay establishment with an oat companion crop and by direct seeding are included in this publication. Annual production costs for established alfalfa or alfalfa-grass hay as well as a budget for maintaining grass pastures are included as well.
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.
Estimated Costs of Crop Production in Iowa -- 2018
Estimated Costs of Crop Production in Iowa -- 2017
Estimated Costs of Crop Production in Iowa -- 2016
Estimated Costs of Crop Production in Iowa -- 2015
View past publications of the Estimated Costs of Production -- 2000-2014.