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Report: Illinois corn and soybean costs are rising
By TIM ALEXANDER
Illinois Correspondent

URBANA, Ill. — A recent study released by the University of Illinois (UOI) Extension confirmed that producing corn and soybeans in Illinois cost more in 2005 than in 2004, and the president of the Illinois Corn Growers Assoc. (ICGA) said production costs are apparently still on the rise.

The study revealed that higher prices for fertilizer, seeds, pesticides and fuel were the primary causes for the increase in production costs for corn and soybean producers.

The study also proved that interest and land costs increased in 2005.

“Total costs to produce corn for all combined areas of the state were $458 per acre in 2005, an 8 percent increase over the year before,” said Dale Lattz, a UOI Extension farm financial management specialist, and compiler of the study.

“Total cost per acre to produce soybeans increased, from $333 per acre in 2004 to $351 per acre in 2005.”

Data from the Illinois Farm Business Management Assoc., which included input from about 6,000 farmers, was used to determine acreage costs for the study. Each farm in the study had more than 500 acres of productive, nearly level soils.

“Costs were lower in southern Illinois primarily because of lower land costs,” though all areas of the state saw an increase in corn and soybean production costs,” Lattz determined.

“Costs per bushel were 81 cents higher in northern Illinois, 78 cents higher in central Illinois with the lower rated soils, 67 cents higher in central Illinois with higher rated soils, and 82 cents higher in southern Illinois. Production costs per bushel of soybeans also increased significantly in all areas of the state compared to 2004. And like corn, total costs per acre increased in all geographic sections of the state.”

John Kuhfuss, ICGA president and a farmer from Mackinaw, Ill., said production costs for his farm have continued to rise during 2006, largely due to the high price of anhydrous. “I’m a full-time farmer, so I am affected every day by these factors. It is my experience that production costs are continuing to rise each year,” Kuhfuss said. “In 2002 I spent about $26 per acre for anhydrous, and by 2005 it was up to $47 per acre.”

Kuhfuss said he booked his anhydrous purchases for 2006 ahead of the season and therefore has a set price rate for the year, “otherwise costs would have been up by about $10 an acre again this year.”

Kuhfuss said he expects production costs, on the whole, to continue to rise.

“I don’t expect them to drop. I don’t know what forces are out there in 2006 that would provide a reason for production costs to drop,” he said.

Lattz agreed, saying that he had hoped fuel prices might at least decrease sometime during 2006.

“Obviously, that’s not happening,” Lattz said.

The UOI Extension report Cost to Produce Corn and Soybeans in Illinois - 2005 can be accessed at www.farmdoc.uiuc.edu/manage/newsletters/fefo 06_09.html

7/13/2006