farmdoc: Management: Return Costs

.	Year
	2002	2003	2004	2005	2006	2007	2008
Yield per acre	154	174	185	145	183	196	200
Price per bu	$2.35	$2.45	$2.18	$2.11	$3.01	$3.95	$4.00
LDP per bu¹	$0.00	$0.01	$0.27	$0.41	$0.00	$0.00	$0.00

Revenue	-------------------------------------- $ per acre -----------------------------------
Crop revenue²	$362	$426	$403	$306	$551	$774	$800
LDP revenue³	$0	$2	$50	$59	$0	$0	$0
DP and CC payments⁴	22	22	41	49	29	24	24
Crop insurance proceeds	5	1	8	29	0	0	22
Gross revenue	$389	$451	$502	$443	$580	$798	$846

Costs	-------------------------------------- $ per acre -----------------------------------
Fertilizer	51	53	64	74	77	84	119
Pesticides	34	40	40	43	37	38	44
Seed	35	37	39	43	47	54	62
Drying	10	11	16	11	15	12	33
Storage	4	3	4	5	4	6	7
Crop insurance	7	6	8	7	12	20	30

Total direct costs	$141	$150	$171	$183	$192	$214	$295

Machine hire/lease	$9	$9	$10	$9	$11	$15	$15
Utilities	4	4	4	4	4	5	5
Machine repair	13	13	15	15	17	20	22
Fuel and oil	7	8	10	13	16	20	23
Light vehicle	2	2	2	2	2	2	2
Mach. depreciation	29	18	19	19	21	23	28

Total power costs	$64	$54	$60	$62	$71	$85	$95

Hired labor	8	7	8	8	9	10	11
Building repair and rent	4	4	5	5	5	6	8
Building depreciation	8	5	5	5	6	7	8
Insurance	4	6	6	8	8	8	10
Misc	5	5	6	5	5	5	6
Interest (non-land)	13	13	12	15	21	22	21

Total overhead costs	$42	$40	$42	$46	$54	$58	$64
Total non-land costs	$247	$244	$273	$291	$317	$357	$454

Operator and land return⁵	$142	$207	$229	$152	$263	$441	$392
Land costs⁶	130	135	137	139	149	149	170
Operator return⁷	39	37	40	39	45	48	63
Net return⁸	$-27	$35	$52	$-26	$69	$244	$159

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.