How Do Your Corn Cost-Of-Production Estimates Compare?

January 18, 2018 09:07 AM
 
How Do Your Corn Cost-Of-Production Estimates Compare?

If you're putting a pencil to your corn cost of production for 2018, consider the blog that Joe Lauer, University of Wisconsin agronomist, released this morning (see corn agronomy).

Lauer reports that the "cost of production in 2018 is predicted to be $645 per acre. The breakeven price for corn at a yield level of 200 bu/A is $3.23 per bushel, at 180 bu/A is $3.58 per bushel, and at 160 bu/A is $4.03. Today, December corn on the CBOT closed at $3.85 per bushel making the 2018 growing season a challenging one economically."

Lauer references the annual Agricultural Resource Management Survey (ARMS) to develop his snapshot on expected costs of production. The estimates exclude costs for marketing and storage. ARMS collection begins in the fall and then is completed the following spring; the 2017 survey is still underway.

Lauer notes that the "cost of corn production in 2016 was $665 per acre in the Heartland region and $587 per acre in the Northern Crescent (Figure 2)."

To complete the ARMS survey, the USDA divides the country into nine farm resource regions. These regions may or may not "fit" your expectations for your specific area, and are interesting to review simply on their own. Lauer notes that Wisconsin belongs to the Northern Crescent region, while the Heartland region is dominated by the "I" states. To fully understand the costs of production figure Lauer provides, you'll want to review the regions, per USDA. See map here.

 

 

 

Figure 1. USDA-ERS Cost of Production Estimates for Corn in the Northern Crescent and Heartland regions of the U.S. Derived from http://www.ers.usda.gov/data-products/commodity-costs-and-returns.aspx#historic1

 

 

 

 

Figure 2. Cost of production and profit estimates for the Northern Crescent and Heartland regions of the U.S.
Derived from http://www.ers.usda.gov/data-products/commodity-costs-and-returns.aspx#historic1

 


 

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Comments

 
Spell Check

Dave
Walton, IN
1/19/2018 07:58 AM
 

  This article is so far from reality. These figures are so bogus. Come on AgWeb do your homework. There is no way costs are that low. You’ve had some really bad articles lately, but this one is the worst. Do you not understand landlords read this stuff and when we go to them with more realistic numbers they think we are not being honest.

 
 
flying farmer
nebraska city, NE
1/25/2018 10:43 AM
 

  Pfft, my cost are less than 1/2 that per bushel, but I am only raising 145 bushel corn so I guess instead of being able to brag about my yields, well, I just quietly deposit a profit in the bank. Sorry, but if your spending that much to achieve high yields, you deserve to go broke for being an idiot. People thinking they can "yield" there way out of an economic mess created by overproduction deserve all the bankruptcy they get.

 
 

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