2003 Economies of Scale Corn Production Budget 1 18
500, 1000, and 2000 Acres
130 Bushel/Acre Yield
No-Till Practices
  ITEM     EXPLANATION PRICE PER ACRES 2   YOUR
UNIT BUDGET
                  500 1000 2000    
RECEIPTS
Corn $2.40 /bu $312 $312 $312  
Yield 130 bu/A
VARIABLE  COSTS 3
Seed (kernels)    28,000 seed/acre 7% price adjust 33 31 29  
Fertilizer 4  
N (lbs.) 110 10% price adjust 29 26 24  
P2O5(lbs) 45 10% price adjust 12 11 10  
K2O(lbs) 50 10% price adjust 7 7 6  
Lime(ton) 0.5 10% price adjust 7 6 5  
Chemicals 5 7% price adjust 43 40 37  
Drying - Fuel & electric only 0.18 /bu 23 23 23  
Trucking - Fuel Only 0.03 /bu 4 4 4  
Fuel, Oil, Grease 6 4 4 4  
Repairs 7 10 13 13  
Miscellaneous 8 13 13 13  
Int. on Oper. Cap. 9 6 mo.  9.0% 7 7 6  
Hired Labor 10 0 0 0    
TOTAL VARIABLE COSTS -Per Acre 192 184 174  
-Per Bushel 1.48 1.41 1.34  
FIXED COSTS
Labor Charge (hrs.) 10 3.3 3.0 2.7 9.00 /hr 30 27 24  
Mach. And Equip. Charge 11 68 54 33  
Land Charge Rent 70 70 70  
Management Charge12 4% 5% 6% of gross revenue 12 16 19    
TOTAL FIXED COSTS 180 166 146  
TOTAL COSTS -Per Acre 372 350 320  
-Per Bushel 2.86 2.69 2.46  
RETURN ABOVE VARIABLE COSTS 120 128 138  
RETURN ABOVE TOTAL COSTS (60) (38) (8)  
RETURN TO LABOR AND MANAGEMENT13 (18) 4 36  
TOTAL RETURN TO LABOR AND MANAGEMENT FOR OPERATION 14 (8,987) 4,380 71,021  
                           
19
1. This budget is intended to provide an example of how size of operations can affect the costs and returns of a crop enterprise.  It is only one of many possible scenarios and is not intended to provide the user with specific revenues, costs, or returns.  
2. Acreage is total acres of corn produced.  Does not include acreage of other crops produced on the same farm.
3. A price adjustment is included for some variable costs.  This reflects the possible price difference of an input 
based on quantity purchased.  The 1000 acre column is the base price, the 500 acre column pays base 
price plus price adjustment, the 2000 acre column pays base price less price adjustment.  Some costs 
may not reflect adjustment due to rounding. 
4. Assumes only maintenance application of fertilizer needed, corn-soybean rotaion,  3.8 O.M., 20 CEC, 
and soil test values of 25 ppm P/A and 150 ppm K/A.
5. Based on use of Roundup Ultra, 2-4D, Basis Gold, Banvel, and COC
6 See specific calculations in Machinery Inventory. Lubrications costs are assumed to be 15% of fuel costs
7 See specific calculations in Machinery Inventory.
8 Includes supplies, utilities, soil tests, small tools, crop insurance, etc…
9 Interest on all variable costs, except drying and trucking, for 6 months at 10% interest rate.
10 Part or all of labor may be a variable cost if paid labor varies with acres farmed. It’s a fixed cost 
if labor costs do not change with acres farmed.  Labor required per acre is increased 10% for 500 acres 
and decreased 10% for 2000 acres.
11 Machinery charge includes depreciation, interest, insurance, and housing.  Machinery is assumed to be 100% owned and recently purchased.  Tractors and implements increase in size and number as acreage of operation increases.   All machinery is assumed to be used only on operator's farm, no custom work included.  The following page shows the machinery inventory for each size operation.
12 Management charges are greater for more acres due to the likelihood of having more fields/farms to manage and more transporting of equipment.
13 Return to labor and management is the revenue less total expenses except operator labor and management charge.  It is a measure of the returns to the operator's labor and management.
14 Total return that can be expected for the entire operation.  (Total Returns = return per acre x number of acres)
Machinery Inventory 20
500 Acres  
Number in Inventory Machine Purchase Price          ($) Inventory Value       ($) Fuel (gal/A) Repairs ($) # of times used
1 Fertilizer Spreader 10,400 9,400 0.11 0.1 1
1 6 Row Planter 17,600 17,600 0.53 0.94 1
1 30 ft. Sprayer 5,000 5,000 0.11 0.15 2
1 Small Combine w/ Head 144,900 144,900 1.93 5.90 1
2 185 bu. Gravity Wagons 3,500 7,000 0.60 0.84 1
0 Small Tractor 24,300 0 0.00 0 0
1 Medium Tractor 30,300 30,300 0.00 2.28 1
0 Large Tractor 112,600 0 0.00 0 0
1 Pickup Truck (1/2) 12,500 12,500 0.10   0.05 1
TOTAL 226,700 3.38 10.26
Fixed Cost Expense Rate =  15%
Total Annual Fixed Costs =  $34,005 Diesel Price ($/gal) = $1.00
Fixed Costs per Acre =  $68
1000 Acres  
Number in Inventory Machine Purchase Price               ($) Inventory Value              ($) Fuel (gal/A) Repairs ($) # of times used
1 Fertilizer Spreader 10,400 10,400 0.11 0.10 1
1 8 Row Planter 24,400 24,400 0.53 0.84 1
1 50 ft. Sprayer 5,500 5,500 0.11 0.1 2
1 Medium Combine w\ Head 162,400 162,400 1.60 5.00 1
2 240 bu. Gravity Wagons 3,500 7,000 0.60 0.84 1
1 Small Tractor 24,300 24,300 0.00 1.94 1
0 Medium Tractor 30,300 0 0.00 0 0
1 Large Tractor 112,600 112,600 0.00 3.84 1
1 Pickup Truck (1/2) 12,500 12,500 0.10   0.05 1
TOTAL 359,100 3.05 12.71
Fixed Cost Expense Rate =  15%
Total Annual Fixed Costs =  $53,865 Diesel Price ($/gal) = $1.00
Fixed Costs per Acre =  $54
2000 Acres  
Number in Inventory Machine Purchase Price             ($) Inventory Value                  ($) Fuel (gal/A) Repairs ($) # of times used
1 Fertilizer Spreader 10,400 10,400 0.11 0.10 1
1 12 Row Planter 47,300 47,300 0.53 1.61 1
1 50 ft. Sprayer 5,500 5,500 0.11 0.1 2
1 Large Combine w\ Head 204,100 204,100 1.93 4.15 1
4 240 bu. Gravity Wagons 3,500 14,000 0.60 1.68 1
0 Small Tractor 24,300 0 0.00 0 0
1 Medium Tractor 30,300 30,300 0.00 1.14 1
1 Large Tractor 112,600 112,600 0.00 3.84 1
1 Pickup Truck (1/2) 12,500 12,500 0.10   0.05 1
TOTAL 436,700 3.38 12.67
Fixed Cost Expense Rate =  15%
Total Annual Fixed Costs =  $65,505 Diesel Price ($/gal) = $1.00
Fixed Costs per Acre =  $33