Looking at Corn, Soybean Costs for 2015

Looking at Corn, Soybean Costs for 2015

USDA's Economic Research service offers peek at costs for next year. It's a solid planning tool.

Every farmer has heard the same phrase when it comes to managing risk management: Know the cost of production. Of course, that's great in the past, but what about the future? You know some of what you're facing, but not everything.

USDA's Economic Research Service recently released an estimate of costs and returns for a range of crops. For this article we captured what they say for corn, soybeans and wheat to show where costs may end up in 2015. The report shows an estimate for 2014 expenses compared to next year and offers some insight into the future.

Related: Understand Cost Of Production To Manage Risk And Maximize Farm Profit

Getting a handle on cost of production can help risk management plans.

The report looks at fertilizer, seed, crop protection products as well as fuel, repairs and other variable expenses. ERS economists also pulled together allocated costs including higher labor, land, taxes and more. This table can be a starting point for plugging in your own costs for next year as 2014 winds down.

That USDA same page has historical information you can apply to your operation as well to firm up any production figures for managing the business. ERS offers information for a wide range of crops from corn, soybeans and wheat to rice, sorghum, cotton and peanuts.

See also:
3 Thoughts on Farm Financial Fundamentals
Production Costs: How Does Your Farm Business Stack Up?

Cost-of-production forecasts for U.S. major field crops, 2014F-2015F

 

Corn

Soybeans

Wheat

Item

2014F

2015F

2014F

2015F

2014F

2015F

Operating costs:

           

  Seed

100.22

101.23

60.94

61.55

16.49

16.66

  Fertilizer

152.84

142.36

38.06

35.46

46.00

42.85

  Chemicals

29.10

29.58

28.70

29.17

14.48

14.72

  Custom operations

18.36

18.56

10.29

10.40

10.94

11.06

  Fuel, lube, and electricity

33.05

31.30

21.83

20.68

19.62

18.58

  Repairs

26.18

26.51

23.13

23.42

21.40

21.67

  Other variable expenses 1/ 

0.12

0.13

0.06

0.06

0.64

0.65

  Interest on operating capital

0.11

0.66

0.05

0.33

0.04

0.25

     Total, operating costs

359.98

350.33

183.06

181.07

129.61

126.44

             

Allocated overhead:

           

  Hired labor

3.17

3.21

3.10

3.14

2.21

2.24

  Unpaid labor

24.76

25.09

17.96

18.20

17.65

17.88

  Capital recovery

99.48

101.39

86.92

88.59

85.20

86.84

  Land

172.63

174.22

158.46

159.92

65.56

66.16

  Taxes and insurance

9.38

9.55

10.16

10.35

6.59

6.72

  General farm overhead

19.84

20.09

18.24

18.47

11.35

11.50

      Total, allocated costs

329.26

333.55

294.84

298.67

188.56

191.34

      Total costs listed

689.24

683.88

477.90

479.74

318.17

317.78

TAGS: USDA
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