farmdoc: Management: Return Costs

.	Year
	2002	2003	2004	2005	2006	2007	2008
Yield per acre	34	39	50	49	48	37	48
Price per bu	$5.69	$7.39	$5.96	$5.87	$6.90	$10.50	$10.20
LDP per bu¹	$0.01	$0.00	$0.11	$0.00	$0.00	$0.00	$0.00

Revenue	-------------------------------------- $ per acre -----------------------------------
Crop revenue²	$193	$288	$298	$288	$331	$388	$490
LDP revenue³	$0	$0	$6	$0	$0	$0	$0
DP and CC payments⁴	16	16	26	30	19	21	21
Crop insurance proceeds	9	6	3	1	3	3	14
Gross revenue	$218	$310	$333	$319	$353	$412	$525

Costs	-------------------------------------- $ per acre -----------------------------------
Fertilizer	20	22	19	23	25	29	39
Pesticides	27	26	27	29	30	28	40
Seed	23	24	27	28	31	34	38
Drying	1	2	2	2	3	1	1
Storage	1	1	1	1	1	1	1
Crop insurance	3	3	6	6	8	8	14

Total direct costs	$75	$78	$82	$89	$98	$101	$133

Machine hire/lease	$6	$5	$6	$6	$6	$7	$7
Utilities	4	4	3	3	3	4	4
Machine repair	13	13	15	15	15	18	20
Fuel and oil	7	9	10	14	15	19	18
Light vehicle	1	1	1	1	1	1	1
Mach. depreciation	24	16	17	19	21	21	27

Total power costs	$55	$48	$52	$58	$61	$70	$77

Hired labor	11	12	11	11	11	12	14
Building repair and rent	2	1	2	2	2	3	3
Building depreciation	4	2	2	3	3	3	3
Insurance	6	4	5	5	6	6	7
Misc	4	4	5	5	6	6	7
Interest (non-land)	9	9	10	11	15	16	15

Total overhead costs	$36	$32	$35	$37	$43	$46	$49
Total non-land costs	$166	$158	$169	$184	$202	$217	$259

Operator and land return⁵	$52	$152	$164	$135	$151	$195	$266
Land costs⁶	89	82	95	98	98	101	115
Operator return⁷	36	36	34	37	39	48	58
Net return⁸	$-73	$34	$35	$0	$14	$46	$93

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.