2014 Crop Budgets Reflect Changes in Input, Land, Machinery Prices

2014 Crop Budgets Reflect Changes in Input, Land, Machinery Prices

The 2014 Nebraska Crop Budgets have been expanded from previous editions and are now available in both a printer-friendly PDF format and customizable Excel spreadsheets. See the Economics section of CropWatch or EC872 on the Extension Publications website.

This year's package includes 66 budgets, up from 53 in 2013. The additional budgets are for Roundup Ready® alfalfa, additional corn systems, field peas, and no-till millet.

Prices of inputs were generally higher in this year's budgets with some notable exceptions including for nitrogen and glyphosate herbicides. Production costs for crops that use a lot of nitrogen and/or Roundup Ready® technologies were moderated by these price reductions.

At the same time, increased land prices put upward pressure on production costs for all crops.

Real estate costs are calculated by multiplying the price of land as determined by the annual Nebraska Farm Real Estate Market Developments survey times four percent. Another one percent is added for real estate taxes.

Relative price changes among the different forms of nitrogen resulted in major changes in the budgets for pivot-irrigated corn. The application of anhydrous ammonia in the spring was replaced with urea ammonium nitrate applied through the pivot system, saving the cost for applying anhydrous.

Another change reducing corn production costs was how seed was priced. In past years these budgets have used the listed price for corn seed even though most producers were getting discounts. The 2014 budgets use lower seed prices reflecting these discounts.

Increased machinery prices were another input contributing to increased production costs.
Finally, the 2014 budgets estimate the cost for removing 2 points of moisture rather than 4 points.

Even with all the savings in the corn budgets noted here, the estimated cost for producing a bushel of corn only declined from $4.04 per bushel for pivot-irrigated no-till corn in 2013 to $3.98 in 2014.

Since nitrogen is generally not applied to soybeans, the cost savings from lower nitrogen prices had no effect. Even though some prices used for soybean inputs such as glyphosate were lower, higher land and machinery prices increased production costs for no-till soybeans grown in rotation with corn from $9.32 per bushel to $10.07 per bushel.

Decreased prices for herbicides and nitrogen drove down production costs for no-till wheat. The increase in real estate prices for dryland in western Nebraska were generally more modest than farm land price increases in the east so the effect of higher land prices was not as pronounced for the wheat budgets. The result is a decrease in the estimated production cost for no-till wheat in a fallow system from $5.86 per bushel to $5.25 per bushel.

Roger Wilson
UNL Extension Farm Management / Enterprise Budget Analyst
Robert Klein
UNL Extensin Western Nebraska Crop Specialist

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