Farm Progress

Costs are up for fertilizer, fuel and soybean seed, and down for corn seed.

Tyler Harris, Editor

November 27, 2018

2 Min Read
HIGHER FERTILIZER COSTS: While nitrogen and phosphorus prices increased for 2019, corn budgets reflected no general change in seed costs.

University of Nebraska-Lincoln experts recently released 78 budgets on 15 crops, including price expectations and input costs for 2019.

In addition to estimating a total cost of production per acre and per bushel cost, including opportunity cost for land use, each budget shows the cash costs of production but does not estimate returns.

These budgets use input supplier information for material and service costs, which were researched by a team led by Robert Klein, Nebraska Extension cropping systems specialist. Glennis McClure, Extension agricultural economist, and Roger Wilson, retired Extension farm management analyst, worked together to format and publish the budgets.

After comparing corn and wheat budgets from 2018 to 2019, it should come as no surprise that materials and services costs have increased. For example, with dryland, no-till, continuous corn with a 125-bushel yield, experts estimate materials and services will be $6.89-per-acre higher in 2019. Pivot-irrigated corn with a 245-bushel yield would see an anticipated $30.45-per-acre increase in materials and services.

One of the biggest takeaways from the 2019 budgets is the increase in fertilizer costs.

“We found that nitrogen fertilizer costs increased about 20% and phosphorus increased about 11%,” McClure says. “Fuel costs were adjusted higher than what was used in the 2018 budgets. But as we know, fuel costs continue to fluctuate, and as they do that can affect crop input costs.”

Land costs were adjusted slightly lower, based on the 2018 Nebraska Farm Real Estate Report. Not surprisingly, real estate taxes continue to climb, and that figure was adjusted in the 2019 budgets.

However, it's tough to make general statements about all costs across all crops — and not all costs increased.

“In one dryland soybean budget, No. 55, using conventional tillage, where yield goals were kept similar to last year at 40-bushel yield, there was an uptick in materials and services, and an overall increase in cost of production from $7.93 to $8.39 per bushel,” McClure says. “It's a factor of all of the inputs that go into that particular crop and the yield.”

That doesn't mean all soybean production budgets saw an increase in costs. Certain practices, including tillage and irrigation, can make a difference.

“One of the soybean comparisons for soybean budget No. 60 — no-till, narrow row, irrigated soybeans — saw an $8.63 decrease in materials and services compared to 2018,” McClure says.

These budgets reflect the low one-third in cost per unit of production. For most producers, this is a good target to use for comparison and to identify where they may be able to lower costs.

“Some numbers are based on assumptions, but research went into the materials and services costs included in the budgets,” McClure says. “That said, each individual producer should look at their own cost comparisons to make any decisions using these budgets.”

To view the 2019 crop budgets, visit agecon.unl.edu/budgets.

 

About the Author(s)

Tyler Harris

Editor, Wallaces Farmer

Tyler Harris is the editor for Wallaces Farmer. He started at Farm Progress as a field editor, covering Missouri, Kansas and Iowa. Before joining Farm Progress, Tyler got his feet wet covering agriculture and rural issues while attending the University of Iowa, taking any chance he could to get outside the city limits and get on to the farm. This included working for Kalona News, south of Iowa City in the town of Kalona, followed by an internship at Wallaces Farmer in Des Moines after graduation.

Coming from a farm family in southwest Iowa, Tyler is largely interested in how issues impact people at the producer level. True to the reason he started reporting, he loves getting out of town and meeting with producers on the farm, which also gives him a firsthand look at how agriculture and urban interact.

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