January 2011 Purdue Crop Cost & Return Guide Craig Dobbins, Alan Miller, Bruce Erickson Purdue University is an Equal Opportunity/Equal Access institution.
Dec 19, 2015
January 2011 Purdue Crop Cost & Return Guide
Craig Dobbins, Alan Miller, Bruce Erickson
Purdue University is an Equal Opportunity/Equal Access institution.
Changes from Oct 2010• Corn price up $0.74/bu.
• Bean price up $1.52/bu.
• Wheat price up $1.21/bu.
• Costs up for fertilizer & diesel fuel
• Costs down for pesticides & dryer fuel
• Per acre costs higher
• Contribution margins higher
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Diesel Fuel Prices Climbing
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Report on Feb. 4, 2011
Fertilizer Prices
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report on Feb. 4, 2011
Management Implications• Under current market prices
– Where possible, wheat & double-crop beans are the best alternative
• $600 per acre contribution margin
– Corn – soybean & corn – soybean – wheat rotations have similar contribution margins on lower yield land
– Rotation corn & soybeans favored over wheat on average & high yield land
– Corn – soybean rotation better than continuous corn– Increased unit costs– Most producers will cover all costs
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Variable Costs (Average Cropland)
Crops 2010
$/acre
2011
$/acre
Oct.
2011
$/acre
Jan.
% ∆
10 to 11
% ∆
Oct. to Jan.
Continuous Corn 355 387 415 17% 7%
Rotation Corn 342 361 397 16% 10%
Rotation Soybeans 183 187 200 9% 7%
Wheat 149 163 181 21% 11%
Double Crop Soybeans
156 165 174 12% 5%
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Contribution Margins, 2010 – 2011 (Average Cropland)
Crops
2010
$/acre
2011
$/acre
Oct.
2011
$/acre
Jan
% ∆
10 to 11
Continuous Corn 271 321 422 55.7%
Rotation Corn 326 386 495 51.8%
Rotation Soybeans 287 374 443 54.4%
Wheat 194 321 394 203.1%
Double-Crop Soybeans 122 167 206 68.9%
Contribution Margin by Rotation, 2011 – Jan.1
Crops in Rotation
Low
Yield($/acre)
Average
Yield($/acre)
High
Yield($/acre)
Corn – Wheat/DC Beans 417 547 708
Corn – Soybeans 341 469 609
Corn – Soybean – Wheat 341 444 567
Soybean – Corn – Corn 325 453 596
Corn – Corn 293 422 5721Sum 2011 contribution margins for individual crops, then divide by years in rotation.
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Total Costs Per Bushel 2009 - 20111
Rotation
Low Yield Average Yield High Yield
$/Bushel $/Bushel $/Bushel
09 10 11 09 10 11 09 10 11
Rotation Corn
4.87 4.30 4.67 4.37 3.89 4.19 3.90 3.54 3.80
Rotation Beans
11.13 10.56 11.05 9.96 9.40 9.73 9.17 8.75 9.0312 1Overhead costs based on corn–bean rotation on 3000 acre farm.
Returns Above Total Costs Per Acre, 2009 - 2011
Acres & Rotation
Low Yield Average Yield High Yield
$/Acre $/Acre $/Acre09 10 11 08 09 11 08 09 11
1000-acrecorn-bean
-122 -43 81 162 19 182 258 77 279
3000-acre corn-bean
-85 -8 115 196 50 212 297 114 31510
Changes from October 2010
• Corn, soybean, & wheat price up sharply from October 2010
• Diesel & fertilizer prices increasing
• Propane & some herbicide prices decline
• Per bushel costs increase
• Contribution margins rocket upward11
Management Implications• Under current market prices
– Wheat & double crop beans are the best alternative where possible
– Rotation corn & soybeans or corn, soybeans, & wheat provide similar return on lower yield land
– Rotation corn & soybeans favored on average & high quality land
– Rotation corn & soybeans still better relative to continuous corn– Increased unit costs– Most producers will cover all costs
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Questions, Comments
Purdue University is an Equal Opportunity/Equal Access institution.