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09
Nov
2012
Profitability Outlook
Author: Chuck Danehower, Extension Area Specialist - Farm Management Comments Off

This table should be used as a guide as yields, prices, and expenses will vary among producers and locations. This table is a look at the start of the 2013 planning process as wheat has been planted. Yields are average yields for Tennessee with prices adjusted for the 2013 production year. Expenses will vary among producers and production systems. One of the expense items that have to be watched is fertilizer. For reference, in variable expenses below, fertilizer expense per acre is estimated as follows: cotton – $ 147, Soybeans – $53, Corn – $167 (includes 150 units of N), Milo – $133, and wheat/soybeans – $129. Weed control costs with resistant weeds have also been difficult to estimate. These costs will vary greatly among producers and individual fields.  Production costs will be updated as we go through the year and budgets are developed for 2013. Please visit with your farm supplier on estimated cost in your area. Producers with owned land and or cash rent can use Returns Over Variable as a guide in decision making. Producers with share rent ground should use Returns Over Variable and Land Costs as a guide with their appropriate share rent calculated. A land cost of 25% of revenue is used in the table as a guide or method of comparison and should not be construed as the appropriate rent for a particular area. Producers who are not making major equipment changes can use UT budgets and this table as a guide in developing their own cropping decision budgets. If equipment changes are being made, then a whole farm financial plan would be better suited as a decision aid. Please contact your local County Extension office or Area Specialist – Farm Management for assistance in developing your own budget or farm financial plan.

 

 

2013 Estimated Returns

 

Cotton

Soybeans

Corn

Milo

Wheat/Soybeans

Yield

860 lbs.

37 bu.

121bu.

80 bu.

60 bu./27 bu.

Price (as of 11/09/12 for 2013)

$0.75 lb.

$13.03 bu.

$6.30 bu.

$5.62 bu.

$8.72 bu./$13.03 bu.

Revenue

$645

$482

$762

$450

 

$875

Variable Expenses

$509

$241

$353

$245

$479

Returns Over Variable

$136

$241

$409

$204

$396

Land Costs (25% of Revenue)

$158

$119

$189

$112

$217

Returns Over Variable and Land Costs

($22)

$121

$219

$93

$180

Fixed Costs
Depreciation & interest on machinery

$76

$41

$39

$34

$83

Returns Over Specified Costs

($99)

$81

$180

$59

$97

 

Some differences have occurred due to rounding.

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