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.

Table 1. Average production costs of PEPS divisions.
        Production costs      
Year Number of contestants Grain Yield Grain Moisture Seed Fertilizer Chemicals Other Custom Drying Interest Variable Equipment Fixed Equipment Land Cost per Acre Cost per bushel Return per acre
Corn, Cash Crop
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
1988 16 136 22.91 $18.09 $43.94 $18.86 $9.13 $8.50 $20.51 $7.75 $13.98 $28.96 $62.53 $232.25 $1.74 $120.54
1989 23 152 20.78 $20.31 $47.35 $16.79 $20.62 $0.00 $16.03 $8.05 $13.10 $30.55 $60.63 $233.42 $1.55 $106.48
1990 32 162 21.83 $20.98 $43.46 $15.98 $22.93 $0.00 $22.47 $8.23 $11.30 $27.72 $62.50 $235.57 $1.46 $121.55
1991 34 173 20.01 $21.91 $46.72 $16.67 $15.04 $0.00 $16.22 $8.30 $21.84 $25.92 $56.99 $229.62 $1.34 $169.31
1992 35 153 27.24 $23.98 $45.76 $21.72 $18.15 $0.00 $35.89 $9.87 $19.09 $22.31 $62.79 $259.56 $1.73 $68.96
1993 36 122 24.53 $23.86 $33.50 $20.07 $15.31 $12.20 $23.28 $6.14 $10.92 $23.83 $58.04 $227.17 $1.95 $87.17
1994 43 178 20.49 $24.68 $41.03 $25.34 $3.57 $16.26 $18.09 $6.40 $13.24 $19.01 $55.52 $223.14 $1.26 $143.74
1995 45 143 19.35 $26.42 $42.45 $24.27 $3.23 $13.02 $10.86 $6.03 $13.84 $20.34 $54.61 $215.06 $1.52 $206.82
1996 21 158 24.41 $28.02 $43.99 $23.72 $4.87 $9.66 $28.25 $6.91 $15.10 $21.89 $55.75 $238.16 $1.54 $176.60
1997 25 172 25.24 $32.15 $51.42 $21.98 $3.69 $9.95 $33.57 $7.48 $13.48 $19.18 $60.91 $253.80 $1.47 $188.19
1998 35 192 19.35 $33.66 $56.40 $23.67 $5.43 $6.79 $14.97 $7.17 $18.34 $22.11 $64.07 $252.61 $1.32 $147.35
Corn, Dairy and Livestock
1987 12 167 23.53 $18.38 $45.24 $16.74 $27.49 $0.00 $0.00 $5.68 $7.98 $52.10 $60.92 $234.53 $1.43 $56.01
1988 15 110 22.08 $18.44 $30.04 $15.11 $3.87 $7.87 $0.00 $5.35 $15.38 $36.51 $60.14 $192.71 $1.81 $91.46
1989 39 136 24.46 $21.42 $30.57 $18.23 $12.78 $0.00 $0.00 $5.89 $15.24 $41.23 $55.35 $200.71 $1.52 $103.38
1990 45 151 25.76 $21.79 $36.31 $15.43 $16.22 $0.11 $0.00 $6.14 $12.43 $36.62 $54.32 $199.37 $1.34 $132.51
1991 61 167 21.21 $22.27 $34.76 $16.54 $14.71 $0.00 $0.00 $6.88 $26.46 $28.46 $53.65 $203.74 $1.24 $181.82
1992 63 133 29.22 $24.82 $27.85 $19.84 $21.17 $0.00 $0.00 $7.12 $24.92 $25.83 $51.60 $203.14 $1.58 $81.95
1993 38 128 26.75 $25.27 $23.66 $18.54 $15.78 $0.00 $0.00 $4.81 $23.72 $24.42 $49.70 $185.92 $1.51 $141.82
1994 52 172 22.50 $25.02 $29.88 $21.45 $4.29 $15.42 $0.00 $5.16 $18.57 $23.33 $49.14 $192.25 $1.13 $162.23
1995 34 140 21.75 $26.12 $29.43 $23.64 $3.23 $11.82 $0.00 $4.98 $16.38 $21.82 $49.47 $186.90 $1.36 $226.00
1996 28 136 25.14 $26.58 $28.62 $20.59 $3.44 $9.04 $0.00 $4.82 $18.92 $23.95 $51.96 $187.94 $1.44 $169.33
1997 16 161 25.79 $30.81 $30.59 $24.65 $2.39 $10.85 $0.00 $5.16 $15.33 $20.35 $53.98 $194.12 $1.21 $220.26
1998 23 190 20.73 $34.48 $46.19 $26.85 $3.43 $13.89 $0.00 $6.57 $21.21 $23.07 $53.08 $228.78 $1.22 $166.09
Soybean
1987 36 57 --- $16.99 $38.71 $18.38 $21.19 $0.00 $0.00 $3.18 $7.06 $34.49 $63.78 $203.78 $3.63 $116.44
1988 6 47 --- $18.61 $20.67 $21.84 $6.08 $0.00 $0.00 $6.52 $10.18 $23.76 $61.00 $168.65 $3.67 $177.80
1989 30 50 --- $18.98 $21.95 $20.14 $11.37 $0.00 $0.00 $5.09 $12.39 $30.05 $55.42 $175.39 $3.57 $104.91
1990 54 52 --- $18.29 $21.18 $14.75 $9.37 $0.00 $0.00 $4.62 $13.37 $33.04 $69.23 $183.84 $3.56 $117.11
1991 57 51 --- $18.78 $20.81 $19.17 $9.85 $0.00 $0.00 $5.32 $20.04 $21.01 $67.43 $182.40 $3.82 $92.09
1992 41 45 --- $20.92 $18.18 $23.45 $14.39 $0.00 $0.00 $5.65 $17.24 $17.47 $64.27 $181.57 $4.08 $61.85
1993 44 49 --- $19.89 $10.20 $24.64 $14.98 $0.00 $0.00 $3.95 $18.16 $18.28 $59.33 $169.43 $3.56 $143.48
1994 84 56 13.47 $21.82 $16.68 $28.39 $2.70 $13.69 $0.00 $4.30 $12.39 $18.51 $63.92 $182.40 $3.32 $123.61
1995 74 53 12.58 $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
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
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
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

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