farmdoc: Management: Return Costs

.	Year
	2002	2003	2004	2005	2006	2007	2008
Yield per acre	152	186	190	172	180	201	199
Price per bu	$2.37	$2.41	$2.17	$2.11	$2.99	$4.00	$4.05
LDP per bu¹	$0.00	$0.01	$0.27	$0.41	$0.00	$0.00	$0.00

Revenue	-------------------------------------- $ per acre -----------------------------------
Crop revenue²	$360	$448	$412	$363	$538	$804	$806
LDP revenue³	$0	$2	$51	$71	$0	$0	$0
DP and CC payments⁴	22	22	40	45	27	25	25
Crop insurance proceeds	6	1	5	14	2	0	22
Gross revenue	$388	$473	$508	$493	$567	$829	$853

Costs	-------------------------------------- $ per acre -----------------------------------
Fertilizer	55	57	68	78	82	90	124
Pesticides	34	38	38	43	40	40	46
Seed	34	36	38	43	45	55	67
Drying	9	9	9	9	11	9	19
Storage	7	5	6	9	8	8	11
Crop insurance	5	7	8	6	11	20	27

Total direct costs	$144	$152	$167	$188	$197	$222	$294

Machine hire/lease	$6	$6	$6	$6	$6	$8	$8
Utilities	4	3	3	4	3	4	4
Machine repair	12	11	13	12	13	16	17
Fuel and oil	7	9	10	13	14	18	22
Light vehicle	1	1	2	1	2	2	2
Mach. depreciation	28	18	19	20	20	23	29

Total power costs	$58	$48	$53	$56	$58	$71	$82

Hired labor	8	8	8	9	8	9	11
Building repair and rent	4	4	4	3	3	4	5
Building depreciation	6	3	4	4	4	4	5
Insurance	7	6	6	9	9	9	10
Misc	5	6	6	6	6	6	7
Interest (non-land)	13	14	12	12	17	18	14

Total overhead costs	$43	$41	$40	$43	$47	$50	$52
Total non-land costs	$245	$241	$260	$287	$302	$343	$428

Operator and land return⁵	$143	$232	$248	$206	$265	$486	$425
Land costs⁶	137	140	143	147	150	166	197
Operator return⁷	37	36	39	44	49	48	75
Net return⁸	$-31	$56	$66	$15	$66	$272	$153

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.