2003 Economies of Scale Soybean Production Budget1 9
500, 1000, and 2000 Acres
40 Bushel per Acre Yield
Conservation Tillage Practices
  ITEM     EXPLANATION PRICE PER ACRES 2   YOUR
UNIT BUDGET
                  500 1000 2000    
RECEIPTS
Soybeans $5.15 /bu $206 $206 $206  
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(ton) 0.5 10% price adjust 7 6 5  
Chemicals 5 7% price adjust 28 26 24  
Trucking - Fuel Only 0.03 /bu 1 1 1  
Fuel, Oil, Grease 5 5 5  
Repairs 14 15 17  
Miscellaneous 6 12 13 14  
Int. on Oper. Cap. 7 5 mo. 9.0% 4 4 4  
Hired Labor 8 0 0 0  
         
TOTAL VARIABLE COSTS -Per Acre 111 107 105  
-Per Bushel 2.77 2.66 2.62  
FIXED COSTS
Labor charge  (hrs.) 8 2.9 2.6 2.3 9.00 /hr 26 23 21  
Mach. and Equip. Charge 9 79 62 40  
Land Charge 70 70 70  
Management Charge 10 4% 5% 6% of gross revenue 8 10 12  
         
TOTAL FIXED COSTS 183 165 143  
TOTAL COSTS -Per Acre 294 272 248  
-Per Bushel 7.36 6.80 6.20  
RETURN ABOVE VARIABLE COSTS (ACRE) 95 99 101  
RETURN ABOVE TOTAL COSTS (ACRE) (88) (66) (42)  
RETURN TO LABOR AND MANAGEMENT (ACRE)11 (54) (32) (8)  
TOTAL RETURN TO LABOR AND MANAGEMENT FOR OPERATION 12 (27,200) (32,356) (16,854)  
       
10
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 Canopy, Fusion, 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 11
500 Acres  
Number in Inventory Machine Purchase Price ($) Inventory Value       ($) Fuel (gal/A)   Repair Costs ($) # times used
1 Fertilizer Spreader 10,400 10,400 0.11 0.23 1
1 15 ft. Chisel plow 7,800 7,800 0.60 0.28 1
1 18 ft. Cultivator 11,000 11,000 0.32 0.29 1
1 25 ft. drill 26,100 26,100 0.49 0.84 1
1 30 ft. Sprayer 5,000 5,000 0.11 0.15 2
1 Small Combine w/ 15 ft.head 146,400 146,400 2.02 5.26 1
1 240 bu. Gravity Wagons 3,500 3,500 0.60 0.42 1
1 Small Tractor 24,300 24,300 1.94 1
1 Medium Tractor 30,300 30,300 1.14 1
0 Large Tractor 112,600 0 3.84
1 Pickup Truck (1/2) 12,500 12,500 0.10   0.05 1
TOTAL 264,800 4.25 14.44
Fixed Cost Expense Rate =  15% Diesel Price ($/gal) = $1.00
Total Annual Fixed Costs =  $39,720
Fixed Costs per Acre =  $79
1000 Acres
  Number in Inventory Machine Purchase Price ($) Inventory Value      ($) Fuel (gal/A)   Repair Costs ($) # times used
1 Fertilizer Spreader 10,400 10,400 0.11 0.23 1
1 23 ft. Chisel Plow 17,100 17,100 0.60 0.4 1
1 28 ft. Cultivator 19,400 19,400 0.32 0.33 1
1 30 ft. Drill 34,600 34,600 0.49 0.92 1
1 50 ft. Sprayer 5,500 5,500 0.11 0.1 2
1 Medium Combine 172,900 172,900 2.02 5.24 1
2 240 bu. Gravity Wagons 3,500 7,000 0.60 0.42 1
0 Small Tractor 24,300 0 1.94 0
1 Medium Tractor 30,300 30,300 1.14 1
1 Large Tractor 112,600 112,600 3.84 1
1 Pickup Truck (1/2) 12,500 12,500 0.10   0.05 1
TOTAL 411,900 4.35 14.61
Fixed Cost Expense Rate =  15% Diesel Price ($/gal) = $1.00
Total Annual Fixed Costs =  $61,785
Fixed Costs per Acre =  $62
2000 Acres
  Number in Inventory Machine Purchase Price ($) Inventory Value      ($) Fuel (gal/A)   Repair Costs ($) # times used
1 Fertilizer Spreader 10,400 10,400 0.11 0.23 1
1 37 ft.Chisel Plow 24,600 24,600 0.60 0.36 1
1 47 ft. Cultivator 33,500 33,500 0.32 0.34 1
1 35 ft Drill 39,700 39,700 0.49 0.91 1
1 50 ft. Sprayer 5,500 5,500 0.11 0.1 2
1 Large Combine 175,900 175,900 2.02 3.81 1
4 240 bu. Gravity Wagons 3,500 14,000 0.60 1.68 1
2 Small Tractor 24,300 48,600 3.88 1
2 Medium Tractor 30,300 60,600 2.28 1
1 Large Tractor 112,600 112,600 3.84 1
1 Pickup Truck (1/2) 12,500 12,500 0.10   0.05 1
TOTAL 527,500 4.35 17.48
Fixed Cost Expense Rate =  15% Diesel Price ($/gal) = $1.00
Total Annual Fixed Costs =  $79,125
Fixed Costs per Acre =  $40