farmdoc: Management: Return Costs

.	Year
	2002	2003	2004	2005	2006	2007	2008
Yield per acre	47	48	45	50	52	52	50
Price per bu	$5.68	$7.29	$5.87	$5.82	$6.82	$10.40	$10.15
LDP per bu¹	$0.01	$0.00	$0.11	$0.01	$0.01	$0.00	$20.00

Revenue	-------------------------------------- $ per acre -----------------------------------
Crop revenue²	$267	$350	$264	$291	$355	$541	$508
LDP revenue³	$0	$0	$5	$0	$1	$0	$1000
DP and CC payments⁴	44	44	44	44	44	24	24
Crop insurance proceeds	1	1	1	1	1	2	28
Gross revenue	$312	$395	$314	$336	$401	$567	$1560

Costs	-------------------------------------- $ per acre -----------------------------------
Fertilizer	19	20	22	25	25	28	41
Pesticides	30	30	28	31	24	24	33
Seed	24	25	27	30	33	36	43
Drying	2	2	2	2	3	1	1
Storage	2	2	2	3	3	2	4
Crop insurance	3	3	6	6	8	8	19

Total direct costs	$80	$82	$87	$97	$96	$99	$141

Machine hire/lease	$5	$5	$6	$5	$5	$8	$10
Utilities	3	3	3	3	3	3	4
Machine repair	11	11	12	12	13	16	17
Fuel and oil	6	7	8	11	13	17	18
Light vehicle	1	1	1	1	1	1	2
Mach. depreciation	25	16	17	17	18	19	24

Total power costs	$51	$43	$47	$49	$53	$64	$75

Hired labor	7	8	9	10	9	10	10
Building repair and rent	3	3	3	3	2	3	4
Building depreciation	4	2	2	2	3	3	4
Insurance	7	6	7	10	9	9	10
Misc	5	5	6	5	5	5	6
Interest (non-land)	10	10	10	12	16	17	16

Total overhead costs	$36	$34	$37	$42	$44	$47	$50
Total non-land costs	$167	$159	$171	$188	$193	$210	$266

Operator and land return⁵	$145	$236	$143	$148	$208	$357	$1294
Land costs⁶	122	123	131	131	135	150	177
Operator return⁷	38	35	39	40	45	48	64
Net return⁸	$-15	$78	$-27	$-23	$28	$159	$1053

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.