farmdoc: Management: Return Costs

.	Year
	2002	2003	2004	2005	2006	2007	2008
Yield per acre	97	134	170	138	144	145	138
Price per bu	$2.41	$2.54	$2.21	$2.17	$3.12	$4.05	$4.00
LDP per bu¹	$0.00	$0.01	$0.27	$0.41	$0.00	$0.00	$0.00

Revenue	-------------------------------------- $ per acre -----------------------------------
Crop revenue²	$234	$340	$376	$299	$449	$587	$552
LDP revenue³	$0	$1	$46	$57	$0	$0	$0
DP and CC payments⁴	16	16	26	30	31	21	21
Crop insurance proceeds	6	13	5	8	6	6	44
Gross revenue	$256	$370	$453	$394	$486	$614	$617

Costs	-------------------------------------- $ per acre -----------------------------------
Fertilizer	54	58	66	77	81	92	126
Pesticides	31	31	31	41	41	39	55
Seed	35	37	41	44	47	52	58
Drying	3	5	4	4	6	4	10
Storage	3	2	2	3	3	2	3
Crop insurance	25	7	8	7	9	20	21

Total direct costs	$151	$140	$152	$176	$187	$209	$273

Machine hire/lease	$6	$6	$6	$6	$6	$7	$7
Utilities	4	4	4	3	4	4	4
Machine repair	15	14	16	16	16	20	21
Fuel and oil	9	8	10	15	15	19	23
Light vehicle	1	1	1	1	1	1	1
Mach. depreciation	29	18	20	23	25	25	30

Total power costs	$64	$51	$57	$64	$67	$76	$86

Hired labor	11	12	11	11	11	12	15
Building repair and rent	5	3	5	5	4	5	6
Building depreciation	7	4	4	5	6	6	6
Insurance	6	4	5	5	6	6	7
Misc	4	4	5	5	6	6	7
Interest (non-land)	11	11	11	13	18	19	17

Total overhead costs	$44	$38	$41	$44	$51	$54	$58
Total non-land costs	$259	$229	$250	$284	$305	$339	$417

Operator and land return⁵	$-3	$141	$203	$110	$181	$275	$200
Land costs⁶	89	82	95	98	98	101	107
Operator return⁷	36	34	37	39	46	48	58
Net return⁸	$-128	$25	$71	$-27	$37	$126	$35

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.