farmdoc: Management: Return Costs

.	Year
	2002	2003	2004	2005	2006	2007	2008
Yield per acre	52	41	56	55	55	55	50
Price per bu	$5.72	$7.39	$5.93	$5.86	$6.84	$10.40	$10.15
LDP per bu¹	$0.01	$0.00	$0.11	$0.01	$0.01	$0.00	$0.00

Revenue	-------------------------------------- $ per acre -----------------------------------
Crop revenue²	$297	$303	$332	$322	$376	$572	$508
LDP revenue³	$1	$0	$6	$1	$1	$0	$0
DP and CC payments⁴	22	22	40	45	27	25	25
Crop insurance proceeds	1	9	4	1	1	0	25
Gross revenue	$321	$334	$382	$369	$405	$597	$558

Costs	-------------------------------------- $ per acre -----------------------------------
Fertilizer	21	21	21	21	21	27	42
Pesticides	30	30	30	30	30	25	28
Seed	21	21	21	21	21	37	43
Drying	2	2	2	2	2	1	1
Storage	3	3	3	3	3	4	5
Crop insurance	3	3	3	3	3	8	18

Total direct costs	$80	$80	$80	$80	$80	$102	$137

Machine hire/lease	$5	$5	$6	$5	$5	$6	$7
Utilities	3	3	3	3	3	3	3
Machine repair	10	10	11	11	11	14	14
Fuel and oil	7	7	9	11	13	17	19
Light vehicle	1	1	1	1	1	1	1
Mach. depreciation	25	16	17	17	18	20	26

Total power costs	$51	$42	$47	$48	$51	$61	$70

Hired labor	8	8	8	9	8	8	10
Building repair and rent	2	2	3	2	2	2	3
Building depreciation	4	2	2	3	2	3	3
Insurance	7	6	6	9	9	9	10
Misc	5	6	6	6	6	6	7
Interest (non-land)	12	13	11	11	15	17	13

Total overhead costs	$38	$37	$36	$40	$42	$45	$46
Total non-land costs	$169	$159	$163	$168	$173	$208	$253

Operator and land return⁵	$152	$175	$219	$201	$232	$389	$305
Land costs⁶	137	140	143	147	150	166	197
Operator return⁷	37	36	39	44	49	48	74
Net return⁸	$-22	$-1	$37	$10	$33	$175	$34

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.