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Machinery economics

FEFO Archive: Farm profitability benchmarks

Per Acre Non-land Costs of Grain Farms of Different Sizes
Gary Schnitkey
FEFO 12-24, 12/18/2012
 

Abstract

Costs across different size grain farms are examined. Non-land costs do not vary across farms of different size. Land costs tend to increase with farm size.
 
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Per Acre Machinery Costs And Values On Illinois Farms, 2003
Gary Schnitkey
FEFO 04-11, 07/28/2004
 

Abstract

Summaries of Illinois Farm Business Farm Management (FBFM) records indicate that power costs on Illinois grain farms average $59.39 per tillable acre in 2003. Power costs are composed of utilities ($4.85), repairs ($15.73), machine hire and leases ($8.53), fuel and oil ($9.65), light vehicle ($2.19) and depreciation ($18.44).
 
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Size Economies on Grain Farms
Gary Schnitkey, Dale Lattz
FEFO 03-10, 05/30/2003
 

Abstract

An often-asked question is whether larger grain farms have lower per acre costs than smaller grain farms. In this paper, data from the Illinois Farm Business Farm Management (FBFM) Association are used to address this question. We find that per acre costs for farm sizes in size categories less than 800 to 1,200 acres are higher than for larger farm size categories. Total costs are relatively constant across categories for categories above 1,200 acres.
 
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Analyzing the Profitability of Your Farm Business
Dale Lattz
FEFO 03-03, 02/17/2003
 

Abstract

Now is a good time for farm operators to take a good look at the financial performance of their farm business for 2002. Most farm operators use a calendar year (January 1 - December 31) as their business year for income tax purposes and also to prepare financial statements about their operation. Even if a business is on a different fiscal year for tax reporting purposes, they may still want to prepare financial statements based on a calendar year.
 
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Analyzing Your Farm Business
Dale Lattz
FEFO 02-02, 01/31/2002
 

Abstract

This time of year farm operators spend time in their office completing paperwork for income taxes, preparing information for their lenders and hopefully spending some time analyzing the performance of their business during the past year. Most farm operators use a calendar year (January 1 - December 31) as their business year for income tax purposes and also to prepare financial statements about their operation. Even if a business is on a different fiscal year for tax reporting purposes, they may still want to prepare financial statements based on a calendar year.
 
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Benchmark Machinery Values on Grain Farms
Gary Schnitkey
FEFO 01-22, 11/12/2001
 

Abstract

Machinery costs represent a significant proportion of total costs on grain farms. Machinery depreciation, machinery repairs, fuel, machinery hire and leasing, utilities, and light vehicle expense account for an average of 16 percent of the total economic costs on grain farms enrolled in the Illinois Farm Business Farm Management (FBFM) Association. There also is considerable variability in machinery costs across farms, with more profitable farms tending to have lower per acre machinery costs (see Illinois Farm Economics: Facts and Opinions. "Do Some Farms Consistently Have Higher Profits than Other Farms?" FEFO 01-15, July 20, 2001).
 
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Do Some Farms Consistently Have High Profits?
Gary Schnitkey
FEFO 01-15, 07/21/2001
 

Abstract

Each year profits vary tremendously across grain farms. In 2000, for example, per acre management returns for Illinois grain farms having high-quality farmland averaged $7 per acre. One-third of the farms had returns below -$10 per acre while one-third of the farms had returns above $38 per acre.
 
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High/Low One-Third Grain Farm Comparison
Dale Lattz
FEFO 01-14, 07/08/2001
 

Abstract

As previous studies have shown, differences in efficiencies and profitability exist across farm operators. The degree of some of these differences is illustrated by examining 2000 data from the Illinois Farm Business Farm Management (FBFM) Association. Data for pure grain farms (no livestock) with over 260 tillable acres were sorted into 4 groups: northern Illinois, central Illinois with high productive soils, central Illinois with lower productive soils and southern Illinois. Data for each group was then ranked based on dollars of production per $1 of non-feed costs. Averages were then calculated for the high and low one-third group of farms.
 
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Costs and Grain Farm Size
Gary Schnitkey
FEFO 01-13, 06/21/2001
 

Abstract

A commonly held notion is that per acre costs decrease as number of acres farmed increase. There is little empirical support for this contention.
 
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Per Acre Machinery Costs on Illinois Grain Farms
Gary Schnitkey
FEFO 01-09, 04/17/2001
 

Abstract

Summaries of Illinois Farm Business Farm Management (FBFM) records indicate that machinery costs on central Illinois grain farms having high-productivity farmland averaged $58.41 per acre in 2001. These costs are composed of machinery repairs ($13.97 per acre), machine hire and leasing ($7.25), fuel and oil ($8.95), light vehicle ($1.57), and machinery depreciation ($26.67). Machinery costs in northern Illinois are higher, averaging $71 per acre. Machinery costs in southern Illinois average $62 per acre, slightly higher than costs in central Illinois.
 
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