The university of Illinois has a spread sheet I use for planning the next years budget. Farmers run a business that costs to produce a crop can change daily as do the prices we may receive when crops are sold. As a result the numbers entered are not final until the inputs are bought or the crops are sold. This is just one of my planning budgets. This fall I received inquiries on how much we were making on our crops. No two farmers will have the exact costs, yields, or sale prices. I also use a correction factor of $35 plus to the bean profit and a $35 minus to the corn after bean profit to credit the nitrogen carryover to the bean crop that produced that nitrogen. Below is an example:
| . | ||||||
| Corn after beans | Corn after corn | Soybeans | Wheat | |||
| Yield per acre | ||||||
| Price per bu | ||||||
| LDP per bu1 | ||||||
| Revenue | -------------------------------------- $ per acre ----------------------------------- | |||||
| Crop revenue2 | $955 | $898 | $715 | $495 | ||
| LDP revenue3 | $0 | $0 | $0 | $0 | ||
| DP and CC payments4 | ||||||
| Crop insurance proceeds | ||||||
| Gross revenue | $978 | $921 | $738 | $518 | ||
| Costs | -------------------------------------- $ per acre ----------------------------------- | |||||
| Fertilizer | ||||||
| Pesticides | ||||||
| Seed | ||||||
| Drying | ||||||
| Storage | ||||||
| Crop insurance | ||||||
| Total direct costs | $464 | $499 | $184 | $149 | ||
| Machine hire/lease | ||||||
| Utilities | ||||||
| Machine repair | ||||||
| Fuel and oil | ||||||
| Light vehicle | ||||||
| Mach. depreciation | ||||||
| Total power costs | $89 | $89 | $74 | $60 | ||
| Hired labor | ||||||
| Building repair and rent | ||||||
| Building depreciation | ||||||
| Insurance | ||||||
| Misc | ||||||
| Interest | ||||||
| Total overhead | $57 | $57 | $43 | $32 | ||
| Total non-land costs | $610 | $645 | $301 | $241 | ||
| Operator and land return5 | $368 | $276 | $437 | $277 | ||
| Land cost6 | ||||||
| Operator return7 | ||||||
| Net return8 | $19 | $-73 | $88 | $-72 | ||
The web site is found at: http://www.farmdoc.illinois.edu/manage/crop_budgets_v2.asp?Region=Northern_Illinois
The first step is complete with the initial budget. The next steps are to refine expected yields and grain prices as the year progresses and take opportunities to purchase inputs at a lower price than projected.
I hope this gives the urban readers the insight to some of the planning and risk management that farmers deal with on a daily basis.
Serving Together, Dean Lundeen
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