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Serving: United States

VARIABLE CROP COSTS JUMP

Higher energy prices hit growers in the variable cost line on their financial statements. Variable costs are expected to be 33% higher in 2006 than 2002, according to a study by Gary Schnitkey and Dale Lattz, University of Illinois economists. The variable costs of corn production are projected to be $55/acre higher next year than in 2002. About half of the increase is due to fertilizer costs, projected to be $28 higher next year than in 2002. Pesticides and seeds are $17 higher and machinery-related items like fuel are $7/acre higher. Variable costs for soybean production are projected to be up $20/acre in 2006 compared to 2002.

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