December, 1999
Field Crops 28.61-25
How Much Does It Cost To Produce An Acre Of Corn Or Soybeans?
Joe Lauer and Ed Oplinger, Corn and Soybean Agronomists
Economic projections for the 2000 production year are for low corn and soybean prices.
As we prepare for 2000, we need to review our operations and find ways to be as
efficient as possible. One item every farmer must get a handle on is their costs
of producing an acre of corn and soybeans. This will help setting realistic yield
expectations and with future marketing business plans.
Since 1987, the Department of Agronomy and UWEX have been conducting the PEPS (Profits
through Efficient Production Systems) contest. The average production costs and
returns of 1358 participants for the last 12 years are shown in Table 1. The contest
is divided into three divisions: 1) corn, cash grain; 2) corn, dairy and livestock
(rotation with alfalfa or manure application); and 3) soybean.
Cost per acre is the total of seed, fertilizer, chemical, other, custom, drying,
interest, equipment, and land costs. Cost per bushel is the cost per acre divided
by yield. Return per acre is the quantity of yield times price with cost per acre
then subtracted. Return per acre is the amount of money left over to pay for other
items not easily accounted for by the contest such as overhead, utilities, improvements,
management, building costs, taxes, etc.
PEPS costs probably underestimate actual costs because not all inputs are accounted
for completely. Also, contest participants tend to put the required 10-acre contest
fields on their best soils with management inputs optimized (i.e. rotation and potential
insect pressure considerations).
Average corn and soybean yields and moisture levels of PEPS participants fairly
accurately reflect general trends reported by the Wisconsin Agriculture Statistics
for the 1987 to 1998 production years (Table 1). Higher yields were recorded during
1991, 1994, 1997, and 1998. Corn moisture levels were greatest during 1992, 1993,
1996 and 1997 resulting in dying costs nearly double that of other years.
Seed costs in 1998 increased 37% for corn over 1994 costs and 28% for soybeans (Table
1). Fertilizer costs increased 46 to 48% for both corn and soybean, however, this
is primarily due to higher yields and higher P and K removal rates. Variable equipment
costs have increased 26 to 30% for both corn and soybeans. Land costs increased
11%.
In the corn divisions, depending upon year, the average maximum and minimum cost
per acre is $215 to $260 in the cash grain division, and $187 to $234 in the dairy
and livestock division (Table 1). Average costs per bushel have been $1.26 to $1.74
in the cash grain division, and $1.13 to $1.81 in the dairy and livestock division.
Better efficiency (low cost per bushel) is seen in years with higher yields.
In the soybean division averaged over years, seed makes up 13% of the total input
costs, chemical inputs are 16%, fertilizer inputs are 10% and land costs make up
34% (Table 1). Average costs per acre for soybean ranged from $168 to $204 and average
cost per bushel ranged from $3.30 to $4.19. Average returns per acre ranged from
$62 to $194. Better efficiency (low cost per bushel) occurs with higher yields.
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Table 1. Average production costs of PEPS divisions.
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Production costs
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Year
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Number of contestants
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Grain Yield
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Grain Moisture
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Seed
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Fertilizer
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Chemicals
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Other
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Custom
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Drying
|
Interest
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Variable Equipment
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Fixed Equipment
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Land
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Cost per Acre
|
Cost per bushel
|
Return per acre
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Corn, Cash Crop
|
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1987
|
25
|
161
|
20.68
|
$20.18
|
$48.09
|
$16.16
|
$26.10
|
$0.00
|
$16.39
|
$7.60
|
$5.83
|
$41.58
|
$62.32
|
$244.24
|
$1.52
|
$36.07
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1988
|
16
|
136
|
22.91
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$18.09
|
$43.94
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$18.86
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$9.13
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$8.50
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$20.51
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$7.75
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$13.98
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$28.96
|
$62.53
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$232.25
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$1.74
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$120.54
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1989
|
23
|
152
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20.78
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$20.31
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$47.35
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$16.79
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$20.62
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$0.00
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$16.03
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$8.05
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$13.10
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$30.55
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$60.63
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$233.42
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$1.55
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$106.48
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1990
|
32
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162
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21.83
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$20.98
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$43.46
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$15.98
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$22.93
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$0.00
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$22.47
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$8.23
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$11.30
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$27.72
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$62.50
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$235.57
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$1.46
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$121.55
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1991
|
34
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173
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20.01
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$21.91
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$46.72
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$16.67
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$15.04
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$0.00
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$16.22
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$8.30
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$21.84
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$25.92
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$56.99
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$229.62
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$1.34
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$169.31
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1992
|
35
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153
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27.24
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$23.98
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$45.76
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$21.72
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$18.15
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$0.00
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$35.89
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$9.87
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$19.09
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$22.31
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$62.79
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$259.56
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$1.73
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$68.96
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1993
|
36
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122
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24.53
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$23.86
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$33.50
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$20.07
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$15.31
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$12.20
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$23.28
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$6.14
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$10.92
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$23.83
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$58.04
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$227.17
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$1.95
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$87.17
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1994
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43
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178
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20.49
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$24.68
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$41.03
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$25.34
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$3.57
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$16.26
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$18.09
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$6.40
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$13.24
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$19.01
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$55.52
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$223.14
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$1.26
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$143.74
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1995
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45
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143
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19.35
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$26.42
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$42.45
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$24.27
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$3.23
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$13.02
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$10.86
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$6.03
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$13.84
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$20.34
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$54.61
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$215.06
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$1.52
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$206.82
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1996
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21
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158
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24.41
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$28.02
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$43.99
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$23.72
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$4.87
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$9.66
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$28.25
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$6.91
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$15.10
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$21.89
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$55.75
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$238.16
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$1.54
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$176.60
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1997
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25
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172
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25.24
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$32.15
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$51.42
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$21.98
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$3.69
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$9.95
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$33.57
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$7.48
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$13.48
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$19.18
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$60.91
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$253.80
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$1.47
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$188.19
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1998
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35
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192
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19.35
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$33.66
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$56.40
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$23.67
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$5.43
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$6.79
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$14.97
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$7.17
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$18.34
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$22.11
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$64.07
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$252.61
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$1.32
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$147.35
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Corn, Dairy and Livestock
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1987
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12
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167
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23.53
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$18.38
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$45.24
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$16.74
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$27.49
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$0.00
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$0.00
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$5.68
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$7.98
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$52.10
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$60.92
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$234.53
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$1.43
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$56.01
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1988
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15
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110
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22.08
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$18.44
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$30.04
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$15.11
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$3.87
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$7.87
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$0.00
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$5.35
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$15.38
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$36.51
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$60.14
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$192.71
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$1.81
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$91.46
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1989
|
39
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136
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24.46
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$21.42
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$30.57
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$18.23
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$12.78
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$0.00
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$0.00
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$5.89
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$15.24
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$41.23
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$55.35
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$200.71
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$1.52
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$103.38
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1990
|
45
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151
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25.76
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$21.79
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$36.31
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$15.43
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$16.22
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$0.11
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$0.00
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$6.14
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$12.43
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$36.62
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$54.32
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$199.37
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$1.34
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$132.51
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1991
|
61
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167
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21.21
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$22.27
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$34.76
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$16.54
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$14.71
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$0.00
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$0.00
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$6.88
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$26.46
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$28.46
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$53.65
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$203.74
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$1.24
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$181.82
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1992
|
63
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133
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29.22
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$24.82
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$27.85
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$19.84
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$21.17
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$0.00
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$0.00
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$7.12
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$24.92
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$25.83
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$51.60
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$203.14
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$1.58
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$81.95
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1993
|
38
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128
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26.75
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$25.27
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$23.66
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$18.54
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$15.78
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$0.00
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$0.00
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$4.81
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$23.72
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$24.42
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$49.70
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$185.92
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$1.51
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$141.82
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1994
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52
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172
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22.50
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$25.02
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$29.88
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$21.45
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$4.29
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$15.42
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$0.00
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$5.16
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$18.57
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$23.33
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$49.14
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$192.25
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$1.13
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$162.23
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1995
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34
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140
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21.75
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$26.12
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$29.43
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$23.64
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$3.23
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$11.82
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$0.00
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$4.98
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$16.38
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$21.82
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$49.47
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$186.90
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$1.36
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$226.00
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1996
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28
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136
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25.14
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$26.58
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$28.62
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$20.59
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$3.44
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$9.04
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$0.00
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$4.82
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$18.92
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$23.95
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$51.96
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$187.94
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$1.44
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$169.33
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1997
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16
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161
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25.79
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$30.81
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$30.59
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$24.65
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$2.39
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$10.85
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$0.00
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$5.16
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$15.33
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$20.35
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$53.98
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$194.12
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$1.21
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$220.26
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1998
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23
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190
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20.73
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$34.48
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$46.19
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$26.85
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$3.43
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$13.89
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$0.00
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$6.57
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$21.21
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$23.07
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$53.08
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$228.78
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$1.22
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$166.09
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Soybean
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1987
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36
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57
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---
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$16.99
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$38.71
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$18.38
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$21.19
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$0.00
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$0.00
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$3.18
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$7.06
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$34.49
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$63.78
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$203.78
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$3.63
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$116.44
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1988
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6
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47
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---
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$18.61
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$20.67
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$21.84
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$6.08
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$0.00
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$0.00
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$6.52
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$10.18
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$23.76
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$61.00
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$168.65
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$3.67
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$177.80
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1989
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30
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50
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---
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$18.98
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$21.95
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$20.14
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$11.37
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$0.00
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$0.00
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$5.09
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$12.39
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$30.05
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$55.42
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$175.39
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$3.57
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$104.91
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1990
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54
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52
|
---
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$18.29
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$21.18
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$14.75
|
$9.37
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$0.00
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$0.00
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$4.62
|
$13.37
|
$33.04
|
$69.23
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$183.84
|
$3.56
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$117.11
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1991
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57
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51
|
---
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$18.78
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$20.81
|
$19.17
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$9.85
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$0.00
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$0.00
|
$5.32
|
$20.04
|
$21.01
|
$67.43
|
$182.40
|
$3.82
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$92.09
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1992
|
41
|
45
|
---
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$20.92
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$18.18
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$23.45
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$14.39
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$0.00
|
$0.00
|
$5.65
|
$17.24
|
$17.47
|
$64.27
|
$181.57
|
$4.08
|
$61.85
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1993
|
44
|
49
|
---
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$19.89
|
$10.20
|
$24.64
|
$14.98
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$0.00
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$0.00
|
$3.95
|
$18.16
|
$18.28
|
$59.33
|
$169.43
|
$3.56
|
$143.48
|
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1994
|
84
|
56
|
13.47
|
$21.82
|
$16.68
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$28.39
|
$2.70
|
$13.69
|
$0.00
|
$4.30
|
$12.39
|
$18.51
|
$63.92
|
$182.40
|
$3.32
|
$123.61
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1995
|
74
|
53
|
12.58
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$21.78
|
$14.90
|
$29.64
|
$3.64
|
$9.44
|
$0.00
|
$4.14
|
$12.49
|
$18.54
|
$66.54
|
$181.12
|
$3.51
|
$165.55
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1996
|
58
|
44
|
14.39
|
$23.84
|
$13.45
|
$35.20
|
$2.09
|
$7.24
|
$0.00
|
$4.25
|
$12.58
|
$19.05
|
$54.24
|
$171.94
|
$4.19
|
$125.83
|
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1997
|
35
|
56
|
12.59
|
$25.28
|
$16.94
|
$30.41
|
$3.54
|
$7.76
|
$0.00
|
$4.43
|
$14.54
|
$19.55
|
$65.48
|
$187.93
|
$3.44
|
$194.26
|
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1998
|
41
|
61
|
13.72
|
$28.00
|
$24.67
|
$29.33
|
$2.20
|
$10.63
|
$0.00
|
$4.99
|
$16.11
|
$18.43
|
$64.03
|
$198.40
|
$3.30
|
$143.85
|