Estimated Costs of CropProduction in Iowa - 2018Ag Decision MakerFileA1-20FM 1712RevisedJanuary 2018The estimated costs of corn, corn silage,soybeans, alfalfa, and pasture maintenancein this report are based on data from severalsources. They include the annual Iowa FarmBusiness Association record summaries, productionand costs data from the Departments of Economics,Agricultural and Biosystems Engineering, andAgronomy at Iowa State University, and a survey ofselected agricultural cooperatives and other inputsuppliers around the state.These cost estimates are representative of averagecosts for farms in Iowa. Very large or small farmsmay have lower or higher fixed costs per acre.Due to differences in soil potentials, quantity ofinputs used, and other factors, production costswill vary from farm to farm. Price shifts for inputscan change production costs in both the shortand long run. The data reflect average cost ofpurchased inputs and a return to land and laborresources, but do not provide a margin for profit ora return to management. They reflect productioncosts only, and do not include costs of storage.Labor has been treated as a fixed cost because mostlabor on Iowa farms is supplied by the operator,family, or permanent hired labor. However, whendeciding among alternative crops, labor should beconsidered a variable cost. The wage rate used hereis $14.00 per hour. The hours assumed per cropare presented in the budgets. The hours per cropacre include not only the field work but also timefor maintenance, travel, and other activities relatedto crop production. The land charge is based onrent equivalent. Owned land may require a greateror lesser cash outlay.In the short run, cash income must be sufficientto pay cash costs, including seed, fertilizer,chemicals, insurance, cash rent, and hired labor,as well as machinery fuel and repairs, and intereston operating capital. In the long run, incomeshould be sufficient to pay all costs of productionfor resources to be used in their most profitablealternative.Corn yields reflect rotation effects. Fertilizerrates have been adjusted to reflect current dataon removal and application rates. Crop insurancecosts reflect revenue crop protection at 80 percentcoverage for a typical farm in Central IowaMachinery costs reflect both new and usedequipment. The machine operations assumedare based on the 2000 Crop Production PracticesSurvey conducted by the Iowa AgriculturalStatistics Service and Iowa State UniversityExtension and Outreach publication PM 696,Estimating the Field Capacity of Farm Machines,.The Estimated Machinery Costs table can be usedto budget other tillage and harvesting systems.
