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June 21, 2011
In 2010, the total of all economic costs per acre for growing corn in Illinois averaged $739 in the northern section, $717 in the central section for farmland with “high” soil ratings, $687 in the central section for farmland with “low” soil ratings, and $635 in the southern section. Soybean costs per acre were $524, $539, $493 and $467, respectively (see Table 1). Costs were lower in southern Illinois primarily because of lower land costs. The total of all economic costs per bushel in the different sections of the state ranged from $4.25 to $4.38 for corn and from $8.98 to $9.53 for soybeans. Variations in this cost were related to weather, yields, and land quality.
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These figures were obtained from farm business records kept by farmers enrolled in the Illinois Farm Business Farm Management Association. The samples included only farms which had no livestock and had more than 500 acres of productive and nearly level soils in each area of the state. Farms located in the 22 counties north and northwest of the Illinois River are included in the sample for northern Illinois. Farms from 36 counties below a line from about Mattoon to Alton are in the sample for southern Illinois. The remaining 44 counties make up the sample for central Illinois. The sample farms averaged 1,267 tillable acres in northern Illinois, 1,244 acres in the central section with high soil ratings, 1,342 acres in the central section with lower soil ratings, and 1,518 acres in southern Illinois.
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Cost of Production for Corn Compared to 2009
Costs per bushel of corn in 2010 as compared to 2009 were higher for all geographic areas of the state except for the northern region. Costs per bushel were higher due to lower yields. Costs per bushel were 6 cents lower in northern Illinois, 18 cents higher in central Illinois with the higher rated soils, 36 cents higher in central Illinois with the lower rated soils and 27 cents higher in southern Illinois.
The average corn yield in 2010 was 4 bushels per acre lower than 2009 in northern Illinois, 24 to 30 bushels lower in central Illinois and 15 bushel per acre lower in southern Illinois. The 2010 average corn yield in the different geographical locations ranged from 8 to 24 bushels per acre lower than the four-year average from 2007 to 2010.
Costs per acre were lower in all the different geographic regions in Illinois compared to 2009. Across the state total costs per acre to produce corn decreased 3 to 9 percent. A number of costs decreased, including fertilizer, pesticides and drying.
Cost of Production for Soybeans Compared to 2009
Production costs per bushel of soybeans in 2010 decreased in all areas of the state as compared to 2009. Costs per bushel decreased mainly due to higher yields and lower fertility costs. Soybean yields were higher in every region when compared to the year before. Soybean yields ranged from 2 to 7 bushels per acre higher in 2010 as compared to 2009. Decreases in costs per bushel ranged from 58 cents in central Illinois with the lower rated soils to $1.46 in northern Illinois.
Total costs per acre decreased in all geographic regions of the state except southern Illinois when compared to 2009. While costs increased $2 per acre in southern Illinois, cost decreased $6 per acre in northern Illinois, $7 per acre in central Illinois with the higher rated soils and $12 per acre in central Illinois with the lower rated soils. Average soybean yields in the different areas ranged from 2 to 4 bushels per acre higher than the four-year average from 2007 to 2010.
Total costs to produce corn for all combined areas of the state were $704 per acre. This figure decreased 7 percent compared to the year before. Variable costs decreased $64 per acre, or 16 percent, other nonland costs increased $7 per acre and land costs increased $4 per acre. In 2010, cash costs accounted for 48 percent of the total cost of production for corn, other nonland costs were 27 percent, and land costs were 25 percent. The average corn yield for all combined areas of the state was 164 bushels per acre resulting in a total cost of production of $4.29 per bushel. The average corn yield was the lowest in the last five years. The highest corn yield on record was 194 bushels per acre in 2008. Total costs per acre were the second highest on record and total costs per bushel were the highest since 2001.
Total cost per acre to produce soybeans decreased, from $522 per acre in 2009 to $515 per acre in 2010. Generally speaking, the same expenses that decreased for corn also decreased for soybeans. Variable costs accounted for 33 percent of the total cost of production for soybeans, other nonland costs 33 percent and land costs 34 percent. The average soybean yield for all combined areas of the state was 56 bushels per acre resulting in a total cost of production of $9.21 per bushel. The average soybean yield was the highest on record. The cost per bushel to raise soybeans the last five years averaged $8.79 per bushel.
The author would like to acknowledge that data used in this study comes from the local Farm Business Farm Management (FBFM) Associations across the State of Illinois. Without their cooperation, information as comprehensive and accurate as this would not be available for educational purposes. FBFM, which consists of 5,500 plus farmers and 60 professional field staff, is a not-for-profit organization available to all farm operators in Illinois. FBFM field staff provide on-farm counsel with computerized recordkeeping, farm financial management, business entity planning and income tax management. For more information, please contact the State FBFM Office located at the University of Illinois Department of Agricultural and Consumer Economics at 217-333-5511 or visit the FBFM website at www.fbfm.org.
A more complete discussion of how some of the costs are calculated can be found under Illinois Farm Management Handbook in the management section of farmdoc.
Issued by: Bradley L. Zwilling, Department of Agricultural and Consumer Economics, University of Illinois