farmdoc: Management: Return Costs

.	Year
	2002	2003	2004	2005	2006	2007	2008
Yield per acre	47	35	52	49	53	54	50
Price per bu	$5.65	$7.49	$5.84	$5.75	$6.85	$10.30	$10.10
LDP per bu¹	$0.01	$0.00	$0.11	$0.01	$0.00	$0.00	$0.00

Revenue	-------------------------------------- $ per acre -----------------------------------
Crop revenue²	$266	$262	$304	$282	$363	$556	$505
LDP revenue³	$0	$0	$6	$0	$0	$0	$0
DP and CC payments⁴	22	22	41	49	29	24	24
Crop insurance proceeds	4	22	11	4	1	0	35
Gross revenue	$292	$306	$362	$335	$393	$580	$564

Costs	-------------------------------------- $ per acre -----------------------------------
Fertilizer	18	19	20	23	23	26	36
Pesticides	30	29	29	31	23	24	27
Seed	24	26	28	29	35	40	46
Drying	3	3	5	3	4	3	3
Storage	2	2	3	3	3	3	4
Crop insurance	3	3	6	6	8	8	24

Total direct costs	$80	$82	$91	$95	$96	$104	$140

Machine hire/lease	$8	$8	$8	$8	$9	$12	$13
Utilities	3	3	3	3	3	4	5
Machine repair	11	11	13	13	14	17	19
Fuel and oil	7	7	9	12	15	19	20
Light vehicle	1	1	2	1	1	2	2
Mach. depreciation	25	15	16	16	18	20	22

Total power costs	$55	$45	$51	$53	$60	$74	$81

Hired labor	8	7	8	8	9	10	10
Building repair and rent	3	2	3	3	3	4	5
Building depreciation	5	3	3	3	3	4	4
Insurance	4	6	6	8	8	8	10
Misc	5	5	6	5	5	5	6
Interest (non-land)	11	11	11	13	19	20	18

Total overhead costs	$36	$34	$37	$40	$47	$51	$53
Total non-land costs	$171	$161	$179	$188	$203	$229	$274

Operator and land return⁵	$121	$145	$183	$147	$190	$351	$290
Land costs⁶	129	130	135	137	139	149	170
Operator return⁷	39	37	40	39	45	48	63
Net return⁸	$-47	$-22	$8	$-29	$6	$154	$57

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.