2001 Economies of Scale Soybean Production Budget1									12
				500, 1000, and 2000 Acres
				40 Bushel per Acre Yield
				No-Tillage Practices
				Ohio State University Extension
	ITEM				EXPLANATION		PRICE PER		ACREAGE 2				YOUR
							UNIT						BUDGET
									500	1000	2000
RECEIPTS
	Soybeans						$5.40	/bu	$216	$216	$216
					Yield		40	bu/A
VARIABLE  COSTS 3
	Seed			80	lbs.	7%	price adjust		21	20	19
	Fertilizer 4										.
		P2O5(lbs)		30		10%	price adjust		8	7	6
		K2O(lbs)		75		10%	price adjust		11	10	9
		Lime(lbs)		750		10%	price adjust		6	6	5
	Chemicals 5					7%	price adjust		25	23	21
	Trucking - Fuel Only						0.03	/bu	1	1	1
	Fuel, Oil, Grease								3	3	3
	Repairs								13	12	10
	Miscellaneous 6								12	13	14
	Int. on Oper. Cap. 7				5	mo.	9.0%		4	4	3
	Hired Labor 8								0	0	0
TOTAL VARIABLE COSTS					-Per Acre				104	99	93
					-Per Bushel				2.60	2.47	2.31
FIXED COSTS
	Labor Charge 8			1.8	2.0	2.2	8.00	/hr	14	16	18
	Mach. and Equip. Charge 9								68	52	36
	Land Charge								70	70	70
	Management Charge10			4%	5%	6%	of gross revenue		9	11	13
TOTAL FIXED COSTS									161	149	137
TOTAL COSTS					-Per Acre				265	248	229
					-Per Bushel				6.63	6.19	5.73
RETURN ABOVE VARIABLE COSTS (ACRE)									112	117	123
RETURN ABOVE TOTAL COSTS (ACRE)									(49)	(32)	(13)
RETURN TO LABOR AND MANAGEMENT (ACRE)11									(26)	(5)	17
TOTAL RETURN TO LABOR AND MANAGEMENT FOR OPERATION 12									(13,016)	(4,914)	34,781
													13
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 soybeans 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 1000 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, soil test values of 20 ppm P/A and 125 ppm K/A.
5	Based on use of Roundup Ultra, Canopy, Select, & COC.
6	Includes supplies, utilities, soil tests, small tools, crop insurance, etc…
7	Interest on all variable costs, except trucking, for 5 months at 9% interest rate.
8	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.
9	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.
10	Management charges are greater for more acres due to the likelihood of having more fields/farms to manage and more transporting of equipment.
11	Estimated return that the operator will receive for supplying labor and management skills to the operation.
12	Total return that can be expected for the entire operation.  (Total Returns = return per acre x number of acres)
Machinery Inventory														14
500 Acres
Number in Inventory				Machine			Purchase Price ($)		Inventory Value      ($)		Fuel (gal/A)		Repair Costs ($)	# times used
		1		Fertilizer Spreader			9,400				0.13		0.26	1
		1		15 ft. No-Till Drill			28,000		28,000		0.35		2.2	1
		1		30 ft. Sprayer			4,500		4,500		0.20		0.28	2
		1		Small Combine w/ 15 ft.head			129,200		129,200		1.60		4.87	1
		1		185 bu. Gravity Wagons			2,500		2,500		0.60		0.84	1
		1		Small Tractor			23,200		23,200				1.94	1
		1		Medium Tractor			27,200		27,200				2.28	1
		0		Large Tractor			106,600		0				0
		1		Pickup Truck (1/2)			12,500		12,500		0.10		0.05
							TOTAL		227,100		2.98		12.72
		Fixed Cost Expense Rate =				15%				Diesel Price ($/gal) =				$1.00
		Total Annual Fixed Costs =				$34,065
		Fixed Costs per Acre =				$68
	1000 Acres
	Number in Inventory			Machine			Purchase Price ($)		Inventory Value         ($)		Fuel (gal/A)		Repair Costs ($)	# times used
		1		Fertilizer Spreader			9,400		9,400		0.13		0.26	1
		1		20 ft. No-Till Drill			40,800		40,800		0.35		2.4	1
		1		60 ft. Sprayer			6,000		6,000		0.20		0.22	2
		1		Medium Combine			136,100		136,100		1.60		3.86	1
		2		240 bu. Gravity Wagons			4,000		8,000		0.60		0.42	1
		0		Small Tractor			23,200		0				0	0
		1		Medium Tractor			27,200		27,200				1.14	1
		1		Large Tractor			106,600		106,600				3.84	1
		1		Pickup Truck (1/2)			12,500		12,500		0.10		0.05	1
							TOTAL		346,600		2.98		12.19
		Fixed Cost Expense Rate =				15%				Diesel Price ($/gal) =				$1.00
		Total Annual Fixed Costs =				$51,990
		Fixed Costs per Acre =				$52
	2000 Acres
	Number in Inventory			Machine			Purchase Price ($)		Inventory Value         ($)		Fuel (gal/A)		Repair Costs ($)	# times used
		1		Fertilizer Spreader			9,400		9,400		0.13		0.26	1
		1		30 ft. No-Till Drill			60,400		60,400		0.35		2.37	1
		1		60 ft. Sprayer			6,000		6,000		0.20		0.22	2
		1		Large Combine			169,700		169,700		1.60		3.21	1
		4		240 bu. Gravity Wagons			4,000		16,000		0.60		0.23	1
		2		Small Tractor			23,200		46,400				0.49	1
		2		Medium Tractor			27,200		54,400				1.2	1
		1		Large Tractor			106,600		106,600				2.24	1
		1		Pickup Truck (1/2)			12,500		12,500		0.10		0.05	1
							TOTAL		481,400		2.98		10.27
		Fixed Cost Expense Rate =				15%				Diesel Price ($/gal) =				$1.00
		Total Annual Fixed Costs =				$72,210
		Fixed Costs per Acre =				$36