April 25, 2003

FEFO 03-08

COST TO PRODUCE CORN AND SOYBEANS IN ILLINOIS-2002

In 2002, the total of all economic costs per acre for growing corn in Illinois averaged $411 in the northern section, $416 in the central section for farmland with "high" soil ratings, $391 in the central section for farmland with "low" soil ratings, and $350 in the southern section. Soybean costs per acre were $337, $341, $312 and $275, respectively (see Table 1). Costs were lower in the southern Illinois primarily because of lower land costs. The total of all economic costs per bushel in the different sections of the state ranged from $2.59 to $3.61 for corn and from $6.24 to $8.09 for soybeans. Variations in this cost were related to weather, yields, and land quality. Southern Illinois had the highest costs per bushel to produce corn and soybeans because of below average yields caused by dry weather last summer.

These figures were obtained from farm business records kept by farmers enrolled in the Illinois Farm Business Farm Management Association. The samples included only farms which had no livestock and had more than 260 acres of productive and nearly level soils in each area of the state. Farms located in the 22 counties north and northwest of the Illinois River are included in the sample for northern Illinois. Farms from 36 counties below a line from about Mattoon to Alton are in the sample for southern Illinois. The remaining 44 counties make up the sample for central Illinois. The sample farms averaged 869 tillable acres in northern Illinois, 1,000 acres in the central section with high soil ratings, 979 acres in the central section with lower soil ratings, and 1,248 acres in southern Illinois.

COST OF PRODUCTION FOR CORN COMPARED TO 2001

Costs per bushel of corn in 2002 were lower for northern and central Illinois with the lower rated soils compared to 2001. Costs per bushel in southern Illinois and in the central section with the higher rated soils were higher in 2002. Costs per bushel were 3 cents lower in northern Illinois, 5 cents lower in central Illinois with the lower rated soils, 18 cents higher in central Illinois with the higher rated soils and $1.13 higher in southern Illinois.

The average corn yield in 2002 was 5 bushels per acre lower than 2001 in northern Illinois, 6 to 16 bushels lower in central Illinois and 54 bushels per acre lower in southern Illinois. The 2002 average corn yield in the different geographical locations ranged from 2 to 31 bushels per acre lower than the four-year average from 1999 to 2002.

Costs per acre were lower in all the different geographic regions in Illinois compared to 2001. Across the state total costs per acre to produce corn ranged from a 3 percent to a 6 percent decrease. Fertilizer, nonland interest charges and land costs decreased the most of any cost categories.

COST OF PRODUCTION FOR SOYBEANS COMPARED TO 2001

Production costs per bushel of soybeans decreased in all areas of the state except southern Illinois compared to 2001. Yields were higher in central Illinois and lower in northern and southern Illinois compared to the year before. Soybean yields ranged from 2 bushels per acre higher to 11 bushels per acre lower in 2002 as compared to 2001. Extreme dry weather conditions caused southern Illinois yields to be 11 bushels per acre less than the year before. Changes in costs per bushel ranged from a 64-cent decrease in central Illinois with the lower rated soils to a $1.60 increase in southern Illinois.

Like corn, total costs per acre decreased in all geographic regions of the state compared to 2001. Costs decreased $10 per acre in northern Illinois and in central Illinois with the higher rated soils, $18 per acre in central Illinois with the lower rated soils and $17 per acre in southern Illinois. Average soybean yields in the different areas ranged from 6 bushels per acre below to 3 bushels per acre higher than the four-year average from 1999 to 2002.

STATE AVERAGES

Total costs to produce corn for all combined areas of the state were $401 per acre. This figure decreased 5 percent compared to the year before. Many costs were similar to the year before with fertilizer, the nonland interest charge and land costs accounting for the majority of the decrease. In 2002, cash costs accounted for 40 percent of the total cost of production for corn, other nonland costs were 31 percent, and land costs were 29 percent. The average corn yield for all combined areas of the state was 145 bushels per acre resulting in a total cost of production of $2.76 per bushel. The average corn yield was the lowest since 1997, when the average was 138 bushels per acre. Total costs per acre were the lowest since 1995 when they were $395 per acre. Total costs per bushel were the highest since 1997.

Total cost per acre to produce soybeans decreased, from $338 per acre in 2001 to $326 per acre in 2002. Generally speaking, the same expenses that decreased for corn also decreased for soybeans. Variable costs accounted for 32 percent of the total cost of production for soybeans, other nonland costs 33 percent and land costs 35 percent. The average soybean yield for all combined areas of the state was 48 bushels per acre resulting in a total cost of production of $6.79 per bushel. Total costs per acre were the lowest since 1995.

A more complete discussion of how some of the costs are calculated can be found under narrative reports in the management-enterprise cost section of farmdoc.

Issued by: Dale Lattz, Department of Agricultural and Consumer Economics