Economic Information Bulletin No. (EIB-7) 51 pp

February 2006

Characteristics and Production Costs of U.S. Corn Farms, 2001

Corn production costs per bushel vary considerably among U.S. producers, depending on yields, farm location, tillage practices, irrigation, previous field usage, enterprise size, and weather. In 2001, the operating and ownership costs per bushel for corn ranged from an average of $1.08 for the 25 percent of U.S. producers with the lowest costs to an average of $2.98 for the 25 percent with the highest costs. Heartland corn producers had the lowest costs per bushel on average. Corn producers with small corn enterprises had the highest costs per bushel due to their lower-than-average corn yields. Operators of part-time and low-sales corn farms had higher production costs per bushel than operators of farms with higher sales. In 2001, 59 percent of corn producers earned a positive net return per bushel after covering their operating and ownership costs from the market value of corn. When loan deficiency payments (LDPs) on corn were added to the value of corn production, 64 percent of producers covered their corn operating and ownership costs. When income consisted of the value of production, LDPs, production flexibility contract, market loss, and disaster assistance payments, 73 percent of producers earned a positive return per bushel after accounting for their operating and ownership costs.

Keywords: corn, costs of production, operator characteristics, production practices, cost variation, Agricultural Resource Management Survey (ARMS)

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