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.
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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. |
