farmdoc: Management: Return Costs

.	Year
	2001	2002	2003	2004	2005	2006	2007
Yield per acre	159	154	174	185	145	183	196
Price per bu	$2.08	$2.35	$2.45	$2.18	$2.11	$3.01	$3.95
LDP per bu¹	$0.14	$0.00	$0.01	$0.27	$0.41	$0.00	$0.00

Revenue	-------------------------------------- $ per acre -----------------------------------
Crop revenue²	$331	$362	$426	$403	$306	$551	$774
LDP revenue³	$22	$0	$2	$50	$59	$0	$0
DP and CC payments⁴	44	22	22	41	49	29	24
Crop insurance proceeds	5	5	1	8	29	0	0
Gross revenue	$402	$389	$451	$502	$443	$580	$798

Costs	-------------------------------------- $ per acre -----------------------------------
Fertilizer	56	51	53	64	74	77	84
Pesticides	33	34	40	40	43	37	38
Seed	34	35	37	39	43	47	54
Drying	9	10	11	16	11	15	12
Storage	5	4	3	4	5	4	6
Crop insurance	5	7	6	8	7	12	20

Total direct costs	$142	$141	$150	$171	$183	$192	$214

Machine hire/lease	$9	$9	$9	$10	$9	$11	$15
Utilities	4	4	4	4	4	4	5
Machine repair	14	13	13	15	15	17	20
Fuel and oil	8	7	8	10	13	16	20
Light vehicle	2	2	2	2	2	2	2
Mach. depreciation	29	29	18	19	19	21	23

Total power costs	$66	$64	$54	$60	$62	$71	$85

Hired labor	8	8	7	8	8	9	10
Building repair and rent	4	4	4	5	5	5	6
Building depreciation	7	8	5	5	5	6	7
Insurance	6	4	6	6	8	8	8
Misc	5	5	5	6	5	5	5
Interest (non-land)	17	13	13	12	15	21	22

Total overhead costs	$47	$42	$40	$42	$46	$54	$58
Total non-land costs	$255	$247	$244	$273	$291	$317	$357

Operator and land return⁵	$147	$142	$207	$229	$152	$263	$441
Land costs⁶	126	129	130	135	137	139	149
Operator return⁷	40	40	40	40	40	40	40
Net return⁸	$-19	$-27	$37	$54	$-25	$84	$252

1. Represents revenue from loan deficiency and marketing loan programs.

2. Crop revenue equals yield per acre time price per bu.

3. Revenue from the loan deficiency program. LDP revenue is yield per acre times LDP per bu.

4. Includes revenue from direct and counter-cyclical programs.

5. Represents a return to pay for land and provide the operator a return.

6. Land costs are represented by a cash rent.

7. Operator return provides the farmer a return for invested equity capital and labor.

8. Positive net return indicate economic profits while negative values indicate economic loses. In equilibrium profits are expected to average zero over time.

9. The regions and counties in Illinois are classified as:

Northern: Boone, Bureau, Carroll, Cook, DeKalb, Dupage, Grundy, Jo Davies, Kane, Kankakee, Kendall, Lake, LaSalle, Lee, Marshall, McHenry, Ogle, Putnam, Stephenson, Whiteside, Will, Winnebago.
Central: Adams, Brown, Calhoun, Cass, Champaign, Christian, Clark, Coles, DeWitt, Douglas, Edgar, Ford, Fulton, Greene, Hancock, Henderson, Henry, Iroquois, Jersey, Knox, Livingston, Logan, Macon, Macoupin, Mason, McDonough, McLean, Menard, Mercer, Montogomery, Morgan, Moultrie, Peoria, Piatt, Pike, Rock Island, Sangamon, Schuyler, Scott, Shelby, Stark, Tazwell, Vermillion, Warren, Woodford.
Southern: Alexander, Bond, Clay, Clinton, Crawford, Cumberland, Edwards, Effingham, Fayette, Franklin, Gallatin, Hamilton, Hardin, Jackson, Jasper, Jefferson, Johnson, Lawrence, Madison, Marion, Massac, Monroe, Perry, Pope, Pulaski, Randolph, Richland, Saline, St. Clair, Union, Wabash, Washington, Wayne, White, Williamson.