Page 42-Corn Talk, Lancaster Farming, Saturday, February 13,1993
Jayson K. Harper
Assistant Professor
Agricultural Economics
Penn State
Gregory W. Roth
Assistant Professor
Agronomy
Penn State
Crop enterprise budgets are
an important farm management
tool. Budgets summarize the
cost of production and the
returns from a given crop enter
prise. Budgets can be deve
loped as 1) projections prior to
planting and 2) after harvest to
check the economic perfor
mance of the crop enterprise. In
this way, budgets can be used to
1) estimate cash flow, 2) pro
vide a basis for credit, 3) assist
in farm planning, and 4) deve
lop least cost feed rations. They
can also be used to help indicate
possible areas of inefficiency
on your operation. The infor
mation contained in these sum
maries along with farm specific
data can be used to help deve
lop com cost of production pro
jections for the 1993 growing
season. Budgets for other crops
on your farm can be developed
in a similar manner. Land
changes have not been reported
in any of the budget summaries.
Because land charges (princi
pal and interest payments, tax
es, rent) are so variable and
location specific, the bottom
line has been reported in these
summaries as “Returns to Land
and Management”. When pre
paring your own budgets, land
charges should be included so
that all relevant costs are con
sidered when gauging the per
formance of the crop enterprise.
The agricultural value of the
land should be used rather than
the market value. Market value
includes the “development” or
“speculative” value of the land,
which the com enterprise
should not be expected to
cover.
Table 1 contains statewide
budget summaries for corn
grain and silage. Averages,
standard deviations, and ranges
are given for each budget item.
The standard deviation and
range give us an idea of the var
iability of the budget data. The
standard deviation can be used
to construct confidence inter
vals for the average values. We
would expect about 68% of all
farmers to fall within ±1 stan
dard deviation of the average,
95% to fall within ±2 standard
deviations, and 99.7% to fall
within ±3 standard deviations.
For instance, using the returns
to land and management from
Table 1, we would expect 68%
of the grain farmers to fall
between $57.64 and $265.04
per acre. The range gives the
lowest and highest values
reported for each budget item.
The results indicate grain far
mers spent $31.34 more on
average to grow the crop and
silage farmers have slightly
more money tied up in machin
ery. The high returns from sil
age arc somewhat misleading,
in that only limited opportuni
ties for selling silage may exist
1992 Corn
and transportation costs asso
ciated with the sale of silage
have not been included.
Table 2 contains regional
budget summaries for corn
grain. The state was broken
down into four regions com
prised of counties with roughly
similar production characteris
tics. The four regions, 1) South
east, 2) Central Valley, 3)
Northeast, Northern Tier and,
Central Mountains, and 4)
West, are shown in Figure 1.
The results indicate that in
1992, Southeast farmers pro
duced com for the lowest cost
per bushel on average, due to
their having the highest average
yield and lowest cost of produc
tion of the four regions.
Table 3 contains budget
summaries for corn grain by
tillage practice. The three til-
Tabic 1. Grain and Silage Budget Summaries, Five Acre Corn Club, 1992 Crop Year
Grain Prediction Budget Senary (54 mordi)
Standard
PevUUne
Itctipt
Yield (bu.)
Price (SAu.)
Deficiency Payment
ttvwNrCotfr
Seed
Femliur
PiepUni
Sutler
SxMmi
Lane
Herbicide
[(•ecocide
Machinery Opcrab*|
Cram Drying
Cudom Hue
Pud Labor
MiaecUmoeua
IntercM on Operating Capua!
Fu*4Co*t
Machinery Ownmkip
$3170
Breakeven Price ($/bu)
Breakeven Yield (buJA)
Nete. Land Chatgn have not ban included in the calculations for Breakeven Pries or Breakeven Yield
n/a. not applicable
T«bk 2. 6nlo Budget Summirlu, by Production Region, Five Acre Corn Club, 1992 Crop Year
Saulbenat
(M recordc)
Standard
Deviation
feetipii
Yield (bu.)
Price (SAu)
Deficiency Payment
VsnMeComi
SMd
FcmJucr
Preplan!
Starter
Sidcdicu
Lime
Ketbicide
Intact icidc
Machinery Operating
Giaia Drying
CuatonHm
Rani Labor
MtawUaMoua
Intaraai on Operating Capital
Fut4Coot
MachMty Ownanhip
53213
■leakeven Price (5A4 )
Bretkrvtn Yield i
Note- Land Chaigct have not bean included fat the cakulabeM for Breakeven Price or Breakeven Yield.
Tabic 3. Grain Budget Summaries, by Tillage Practice, Five Acre Corn Club, 1992 Crop Year
Conventional Tillage
(29 records)
Averai
tec tips.
150.1
$126
$0.09
Yield (bu.)
Price (S/bu.)
Deficiency Payment
Ultras
Variable Costs:
Seed
Fertilizer
Preplant
Starter
Sidedress
Lime
523.6 S
Herbicide
Inaccticide
Machinery Operating
Grain Drying
Cualom Hire
Paid Labor
Miscellaneous
Interest on Operating Captial
Fund Costs:
Machinery Ownership
$3971
$O3
Breakeven price (SAm.)
Breakeven Yield (btiVA)
Note Land Charges have ml been included m Ibe calculations for Breakeven Price or Breakeven Yield.
Club Budget Summary
lage practices represented in
the budgets are conventional
tillage, minimum tillage, and
no-till. In 1992, no-till farmers
reported the highest yields, fol
lowed by minimum tillage. Tot
al variable costs were highest
for minimum tillage, followed
by no-till. As expected, herbi
cide costs are higher and
machinery operating expenses
lower under no-till. Farmers
using minimum tillage reported
higher cost for crop drying,
while no-till farmers had the
highest custom hire charges.
Machinery ownership costs
were almost twice as high on
average for conventional and
minimum tillage as no-till. The
difference in total cost, along
with the higher yield, made no
li 11 the most profitable on aver
age in 1992.
Sh|t mdHcltoi BuritM S«MV7 (11 rmrti)
Range
Low
23.3
$21.09
$22,94
MO DO
ISJI
SIS 13
5122
it o»
him
13J2
$27.34
512941
549D2
Nwlhaast, Narthara Tkr,
aad Cnlral Mauatalas
(tl morns)
Central Vaßey
(Id record*)
SliaSird
Pavlatloa
543 10
SIM
Minimum Tillage
(19 records)
Slaadard
Deviation
Slaadard
Pevlatloß
Averai
77 JO
$022
$O.ll
164.1
$2.29
$O.Ol
36.6
$O2l
$0.21
s32s
$22.94
$O9
$1903
$40.10
$14.92
$039
$1.46
$1.07
Standard
Deviation
lUaga
Iw I HI
324
$40.00
190
$3OOO
nft
$13.44
$33.79
*977
S7J2
sun
J4J9
$13,0
U 2)
SI37S
son
saoo
saoo
sioo
saoo
saoo
St 15
$2440
S2IXO
S3OXO
SIIXO
549J9
SI4XO
$32.19
SIOJI
$1039
$13.03
SIJO
$32.40
S3OXO
S44XO
$441
$2441
$102X4
I Weal
1(14 racordi)
SliidiN
Ddvkltoß
Slaadard
Pavlalloa
523J7
S2OJ3
517.53
54323
No-TIU
(6 records)
Standard
Deviation
Averai
213
$0.17
SOM
1736
$124
$O.OO
515.91
$27.79
$2009
$1233
$1.16
$023
Table 4. Grata Budget Summaries, by Yield Level, Five Acre Corn Club, 1992 Crop Year
Top 25%
(14 record*)
Standard
Devhti—
ftCtifil
Yield (ku.)
fnu <S/bu.)
Deficiency Payment
Vmit^UCHU
Saad
Fertilizer
Pieplant
Suiur
SidaJreu
Lune
Hufeodt
laaaetieida
Machinery Operating
Oiatn Drying
CuitomHua
Paid Labor
MimDanaoua
Inlereti m Operating Capnil
12410
FUtdCoMt
Machinery Ownenhip
534.20
■teak even Pne* (S/Vj )
Breakeven Yield i
Note* Land Chti|ei have nal been included in the calculation* for Breakeven Price or Breakeven Yield.
Table 4 contains budget
summaries for corn grain by
yield level. Com cost of pro
duction is broken down by four
yield levels representing the top
25% of yields in 1991, the high
middle 25%, the low middle
25%, and the bottom 25%. Tot
al variable costs did not vary
between yield levels as much in
1992 as they did in 1991.
Machinery ownership costs
were highest for the lowest
yielding group and very similar
for the other yield groups. As in
1991, the highest yielding
group had the highest returns to
land and management and the
lowest breakeven price.
Table 5 contains budget
summaries for corn grain by
soil productivity group. Soils
in Pennsylvania can be classi
fied into five soil productivity
groups. Group I soils are char
acterized as being well-drained
and have a depth of greater than
40 inches. Group II soils can
Ttbk S. Grail Budget Summarka, by Soil Productivity Group, five Aero Corn Chib, 1»92 Crop Ym
Group 1
(23 records)
Averai
Receipts
Yield (bu.)
Price (S/bu.)
Deficiency Payment
Grom Relume
S4Q4 49
Variable Costs:
Seed
Fertilizer
Preplan!
Starter
Sidedreaa
Lime
Herbicide
Insecticide
Machinery Opcretini
Grain Drying
Custom Hire
Paid Labor
Miscellaneous
Interest on Operating Capdal
$24.77
Total Variable Coal
\lTslt
Fixed Corns:
Machinery Ownership
Breakeven Price (S/bn.)
Breakeven Yield
Note: Land Charges have not been included in the calculations for Breakeven Pnca or Breakeven Yield.
Igurc 1. Pennsylvanie Five Acre Corn Club Budget Regions
H%hMMdlt3s%
(Idrnearda)
Standard
Devlaitan
SUjOO
$1023
$3394
either be moderately well
drained soils with a soil depth
of greater than 40 inches or
well-drained soils with a soil
depth of between 20 and 40
inches. Group 111 soils can be
either moderately well-drained
soils with a soil depth of 20 to
40 inches or well-drained soils
with a soil depth of less than 20
inches. No budgets for Group
IV or V soils were requested for
1992. Farmers producing com
on Group I soils had the highest
yields on average in 1992 at
171.4 bu./A. Farmers growing
com on Group II soils reported
the lowest average yield and a
higher cost of production than
farmers on Group I soils. The
difference in returns to land and
management between Group I
and II soils was about $32 in
1992. The differences for
Group 111 soils when compared
to Groups I and II soils are very
evident: total costs are higher
and returns to land and manage
ment are substantially lower.
Group n
(7 records)
Standard
Deviation
Averai
171.4
$127
$OO6
243
5022
$O3l
141.7
sl2t
sa26
$9341
$31330
$167
$2339
>171.62
SI6J3
$43.97
SL4S
UmmiS*
(14 new*)
(Urtaerdt)
SUW>r4
DwUll—
Standard
Pa via tlan
$2341
Group 111
(llrocorde)
Standard
Deviation
Standard
Deviation
Averai
263
$Ol4
$033
1314
$132
$0.04
32.9
$036
$0.14
$10332
$33633
$7236
$9.06
$2331
1119.46
$14.17
$17.74
$43.94
SOJt
$O5l