farmdoc: Management: Return Costs

.	Year
	2002	2003	2004	2005	2006	2007	2008
Yield per acre	153	159	166	147	172	189	191
Price per bu	$2.39	$2.41	$2.19	$2.10	$3.02	$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	$366	$383	$364	$309	$519	$756	$774
LDP revenue³	$0	$2	$45	$60	$0	$0	$0
DP and CC payments⁴	44	44	44	44	44	24	24
Crop insurance proceeds	6	1	5	14	2	0	22
Gross revenue	$416	$430	$458	$427	$565	$780	$820

Costs	-------------------------------------- $ per acre -----------------------------------
Fertilizer	56	59	66	78	79	92	127
Pesticides	33	39	38	41	37	38	47
Seed	34	36	38	43	47	54	64
Drying	8	8	8	7	10	8	20
Storage	5	4	5	8	6	6	9
Crop insurance	5	7	8	6	11	20	29

Total direct costs	$141	$153	$163	$183	$190	$218	$296

Machine hire/lease	$6	$6	$7	$6	$6	$9	$12
Utilities	4	4	4	4	4	5	5
Machine repair	13	13	14	15	15	18	20
Fuel and oil	7	8	9	13	15	19	22
Light vehicle	1	1	2	1	1	2	2
Mach. depreciation	29	19	19	20	21	22	27

Total power costs	$60	$51	$55	$59	$62	$75	$88

Hired labor	7	8	9	10	9	10	11
Building repair and rent	5	4	4	5	4	4	7
Building depreciation	7	4	4	4	4	5	5
Insurance	7	6	7	10	9	9	10
Misc	5	5	6	5	5	5	6
Interest (non-land)	12	12	11	13	18	20	19

Total overhead costs	$43	$39	$41	$47	$49	$53	$58
Total non-land costs	$244	$243	$259	$289	$301	$346	$442

Operator and land return⁵	$172	$187	$199	$138	$264	$434	$378
Land costs⁶	122	123	131	131	135	150	177
Operator return⁷	38	35	39	40	45	48	64
Net return⁸	$12	$29	$29	$-33	$84	$236	$137

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.