As we start 2014, budgets and projections particularly at average yields look to be closer or tighter than 2013. Lower commodity prices in 2014 could squeeze profit margins and in some instances create negative margins. Producers should develop their own financial plans to gauge the effects of lower prices on their operation. Please contact your local County Extension office or Area Specialist – Farm Management for assistance in developing your own budget or farm financial plan.

This table below should be used as a guide as yields, prices, and expenses will vary among producers and locations. Expenses will vary among producers and production systems. For reference, in variable expenses below, fertilizer expense per acre is estimated as follows: Cotton – $ 112, Soybeans – $46, Corn – $148 (includes 170 units of N), Milo – $94, and Wheat/Soybeans – $110. As we start to look at 2014 cropping decisions, cost of production will be adjusted as information becomes available. Projected yields used in these estimates are based on 5 year average Tennessee yields.  Weed control costs with resistant weeds have also been difficult to estimate. These costs will vary greatly among producers and individual fields.  Production costs are estimates based on the 2014 University of Tennessee Crop Budgets with adjustments made where needed. 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.