An Acre of Corn: A Surprising Window Into Our Agricultural Lives

A friend passed along this link to the 2011 report on the estimated costs of crops production in Iowa. I was most intrigued by the break-even worksheet at the bottom of the page. Among other things, this resource describes all the anticipated costs associated with growing an acre of corn in Iowa in 2011. I put together a little chart to show the data on a break-even scenario.

Some of the categories on the chart are hard for a non-farmer like myself to understand. I couldn't find a line item for herbicides. I think that actually may be accounted for in the "Seed & Tech" line item, which I've simply listed as "Seed" in my chart. The total cash flow needed per acre to cover the above costs is listed as $593.62, minus the $25/acre subsidy from the USDA.

What jumps out to me is that when we eat foods supported by corn commodities, which includes beef, pork, chicken, sweetened soda, etc. - we are eating fossil fuels and financing.

I was also intrigued by this chart that shows historical costs per acre of corn (page 13). Here's a graph, based on that data, showing the comparative costs in 2003 and anticipated costs in 2011 for an acre of corn that follows an acre of corn from the previous growing season.

The increase in costs per acre are certainly a reflection of inflation, especially in the cost of land and machinery, but the seed and chemical costs are a huge outlier. The justification for the genetically modified seeds is that they increase yields, but they also increase costs. In 8 years innovation in seed technologies have led to an impressive 22% increase in yields but, during that time, costs for the seed/chemical technologies have risen a flabbergasting 134%. That's what happens when we have an agricultural system built on fossil-fuel based inputs and expensive genetically modified seed. It's hard to see how the current system is economically and environmentally sustainable.

Note: They are using different calculations for the break-even worksheet and the total costs.

Comments

[Karen]

Craig, with real estate costs dropping precipitously in much of the country, are those increases in land costs estimates or actual numbers? I'm curious because the seed/tech costs are a much higher percentage increase than land in any case, but I wonder if that difference might be even larger if property values continue to drop. Interesting.

[Keith]

Here is an interesting document put out by the university of Illinois:

http://fbfm.ace.uiuc.edu/pdf%20files/Advance%20Report/AdvanceReport2008.pdf .

Page 34 has a similar table of expense for corn another for soybeans. I wanted to make an intelligent comment but found the subject too complex. There are a lot of variables, crop type, quality of land etc...

One quote out of the introduction sticks out "Even with the record high yield, this
was the highest cost per bushel to grow corn
since 1988."

I take it that high yield doesn't imply efficiency.

[Keith]

I wish there was a way to edit/delete comments.

[craig]

Why would you delete?