Estimated Costs of Crop Production in Iowa - 2018.pdf -...

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Estimated Costs of Crop Production in Iowa - 2018Ag Decision MakerFile A1-20FM 1712 Revised January 2018The estimated costs of corn, corn silage, soybeans, alfalfa, and pasture maintenance in this report are based on data from several sources. They include the annual Iowa Farm Business Association record summaries, production and costs data from the Departments of Economics, Agricultural and Biosystems Engineering, and Agronomy at Iowa State University, and a survey of selected agricultural cooperatives and other input suppliers around the state.These cost estimates are representative of average costs for farms in Iowa. Very large or small farms may have lower or higher fixed costs per acre.Due to differences in soil potentials, quantity of inputs used, and other factors, production costs will vary from farm to farm. Price shifts for inputs can change production costs in both the short and long run. The data reflect average cost of purchased inputs and a return to land and labor resources, but do not provide a margin for profit or a return to management. They reflect production costs only, and do not include costs of storage.Labor has been treated as a fixed cost because most labor on Iowa farms is supplied by the operator, family, or permanent hired labor. However, when deciding among alternative crops, labor should be considered a variable cost. The wage rate used here is $14.00 per hour. The hours assumed per crop are presented in the budgets. The hours per crop acre include not only the field work but also time for maintenance, travel, and other activities related to crop production. The land charge is based on rent equivalent. Owned land may require a greater or lesser cash outlay.In the short run, cash income must be sufficient to pay cash costs, including seed, fertilizer, chemicals, insurance, cash rent, and hired labor, as well as machinery fuel and repairs, and interest on operating capital. In the long run, income should be sufficient to pay all costs of production for resources to be used in their most profitable alternative.Corn yields reflect rotation effects. Fertilizer rates have been adjusted to reflect current data on removal and application rates. Crop insurance costs reflect revenue crop protection at 80 percent coverage for a typical farm in Central IowaMachinery costs reflect both new and used equipment. The machine operations assumed are based on the 2000 Crop Production Practices Survey conducted by the Iowa Agricultural Statistics Service and Iowa State University Extension and Outreach publication PM 696, Estimating the Field Capacity of Farm Machines, . The Estimated Machinery Costs table can be used to budget other tillage and harvesting systems.

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