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January 2011 Purdue Crop Cost & Return Guide

January 2011 Purdue Crop Cost & Return Guide . Craig Dobbins, Alan Miller, Bruce Erickson . Purdue University is an Equal Opportunity/Equal Access institution. Changes from Oct 2010. Corn price up $0.74/bu. Bean price up $1.52/bu. Wheat price up $1.21/bu.

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January 2011 Purdue Crop Cost & Return Guide

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  1. January 2011 Purdue Crop Cost & Return Guide Craig Dobbins, Alan Miller, Bruce Erickson Purdue University is an Equal Opportunity/Equal Access institution.

  2. Changes from Oct 2010 • Corn price up $0.74/bu. • Bean price up $1.52/bu. • Wheat price up $1.21/bu. • Costs up for fertilizer & diesel fuel • Costs down for pesticides & dryer fuel • Per acre costs higher • Contribution margins higher

  3. Diesel Fuel Prices Climbing Report on Feb. 4, 2011

  4. Fertilizer Prices report on Feb. 4, 2011

  5. Management Implications • Under current market prices • Where possible, wheat & double-crop beans are the best alternative • $600 per acre contribution margin • Corn – soybean & corn – soybean – wheat rotations have similar contribution margins on lower yield land • Rotation corn & soybeans favored over wheat on average & high yield land • Corn – soybean rotation better than continuous corn • Increased unit costs • Most producers will cover all costs

  6. Variable Costs (Average Cropland)

  7. Contribution Margins, 2010 – 2011 (Average Cropland)

  8. Contribution Margin by Rotation, 2011 – Jan.1 1Sum 2011 contribution margins for individual crops, then divide by years in rotation.

  9. Total Costs Per Bushel 2009 - 20111 1Overhead costs based on corn–bean rotation on 3000 acre farm.

  10. Returns Above Total Costs Per Acre, 2009 - 2011

  11. Changes from October 2010 • Corn, soybean, & wheat price up sharply from October 2010 • Diesel & fertilizer prices increasing • Propane & some herbicide prices decline • Per bushel costs increase • Contribution margins rocket upward

  12. Management Implications • Under current market prices • Wheat & double crop beans are the best alternative where possible • Rotation corn & soybeans or corn, soybeans, & wheat provide similar return on lower yield land • Rotation corn & soybeans favored on average & high quality land • Rotation corn & soybeans still better relative to continuous corn • Increased unit costs • Most producers will cover all costs

  13. Questions, Comments Purdue University is an Equal Opportunity/Equal Access institution.

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