Corn, soybean production costs holding steady
Iowa State University (ISU) ag economists don’t expect production costs for corn and soybeans to change much for 2011. Although they won’t release their final assessment of production costs until December, they were sharing some preliminary estimates with landowners and farm operators at a series of land leasing meetings being held in August.
Steve Johnson, a farm and ag business management field specialist with ISU Extension, says, “August is the prime time to negotiate cash rental rates for 2011, so we are releasing these preliminary cost of production estimates. Farmers are making decisions right now.” In Iowa, rental agreements have to be broken by September 1 or they remain in effect for the next crop year.
The ISU economists expect the cost of producing a bushel of soybeans to be down about 2 cents from last year. They think corn production costs will be about 4 cents per bushel higher.
Seed costs are expected to be down a little while rent and fertilizer costs are expected to be flat. However, nitrogen prices have increased some over the past few days.
The economists estimate the cost of producing 165 bushels of corn on medium quality land will be $3.94 per bushel ($650 per acre) where corn follows corn. They peg the cost of producing 145 bushels of corn following corn on lower quality land at $4.08 per bushel ($591 per acre). Their estimate for producing 185 bushels of corn following corn on higher quality land is $3.83 per bushel ($708 per acre).
Where corn follows soybeans, they estimate the cost of producing 180 bushels of corn on medium quality land will be $3.40 per bushel ($619 per acre). They estimate it will cost $3.50 per bushel ($560 per acre) to produce 160 bushels of corn following soybeans on lower quality land. Finally, they predict it will cost $3.39 per bushel ($677 per acre) to produce 200 bushels of corn following soybeans on higher quality land.
The ISU economists estimate it will cost $8.65 per bushel ($432 per acre) to raise 50 bushels of soybeans following corn on medium quality land. On lower quality land, they predict it will cost $8.87 per bushel ($339 per acre) to raise 45 bushels of soybeans following corn. The economists expect it to cost $8.47 per bushel ($466 per acre) to raise 55 bushels of soybeans following corn on high yielding land.
The 2011 estimates are not available online. However, the similar figures for 2010 are available at the ISU Ag Decision Maker site: www.extension.iastate.edu/agdm. Do a search for estimated costs of production. Input costs are broken out by various categories–land, crop inputs, machinery and labor.
By Rich Fee, Crops and Soils Editor, Successful Farming Magazine