Evaluation of Prevented Planting Program

Methodology and updating procedures for 

calculating preplanting percentages

Contract Number D13PD001146

A Report for

Acquisition Services Directorate

and

Risk Management Agency

Evaluation of Prevented Planting Program

Methodology and updating procedures for

calculating preplanting percentages

Contract Number D13PD001146

A report for

Acquisition Services Directorate and 

Risk Management Agency

TABLE OF CONTENTS

1. METHODOLOGY ...........................................................................1

1.1. Determining production costs .................................................. 1

1.2. Determining costs incurred prior to planting................................. 3

1.3. Determining pre-planting costs ................................................ 6

2. METHODOLOGY BY CROP................................................................7

2.1. ERS Survey data crops ........................................................... 7

2.1.1. The “Production costs” tab ........................................... 8

2.1.2. The “Preplant” tab....................................................11

2.1.3. Barley ...................................................................12

2.1.4. Corn .....................................................................13

2.1.5. Cotton...................................................................14

2.1.6. Cottonseed .............................................................15

2.1.7. Oats......................................................................16

2.1.8. Peanuts .................................................................17

2.1.9. Rice......................................................................18

2.1.10. Sorghum grain ........................................................19

2.1.11. Sorghum silage .......................................................20

2.1.12. Soybeans ..............................................................21

2.1.13. Wheat..................................................................22

2.2. Budget based crops .............................................................24

2.2.1. Buckwheat..............................................................24

2.2.2. Canola...................................................................25

2.2.3. Dry Beans ...............................................................26

2.2.4. Dry Peas.................................................................29

i
2.2.5. ELS Cotton..............................................................31

2.2.6. Flax ......................................................................36

2.2.7. Green Peas .............................................................38

2.2.8. Millet ....................................................................42

2.2.9. Mustard .................................................................43

2.2.10. Onions .................................................................45

2.2.11. Popcorn................................................................49

2.2.12. Northern Potatoes ...................................................51

2.2.13. Southern Potatoes ...................................................52

2.2.14. Processing Beans .....................................................54

2.2.15. Processing Sweet Corn ..............................................57

2.2.16. Rye .....................................................................59

2.2.17. Safflower..............................................................62

2.2.18. Sunflower Seeds ......................................................64

2.2.19. Tobacco ...............................................................66

2.3. Special cases .....................................................................69

2.3.1. Hybrid corn seed.......................................................69

2.3.2. Hybrid sorghum seed..................................................71

2.3.3. Sugar beets .............................................................74

3. UPDATING PREVENTED PLANTING COST ESTIMATES ............................. 79

3.1. Updating methodology..........................................................79

3.2. Updating procedures............................................................80

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Evaluation of Prevented Planting Program: Methodology and updating procedures

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1. METHODOLOGY

This document provides the methodology we used to calculate the preplanting percentages for each crop, as 

well as instructions on how to update the calculations for subsequent years.

Calculating preplanting percentages for each crop required a three-step process:

• Building a production cost budget for each crop (in this case, for the 2003-2012 period);

• Estimating the percentage of each expense category that should be considered a pre-planting 

cost; and

• Multiplying these two data sets to determine pre-planting costs and the overall share of costs 

that should be considered pre-planting.

For each crop the cost data for the 2003-2012 crops is assembled in an Excel file. The first sheet shows total 

production costs. The second sheet contains factors that represent the percentage of each cost line item 

that is estimated to be incurred in a prevented planting situation. The third sheet contains the product of 

the total costs in the first sheet and the percentage factors in the second sheet. It also calculates the 

percentage of total costs that is incurred in a PP situation, which can then be compared to the current RMA 

coverage levels for prevented planting.

In most cases, we have structured budgets in accordance with the Economic Research Service’s normal 

aggregated cost framework used in the agency’s ongoing work on commodity costs and returns. In some 

cases this required us to estimate overhead costs that were not explicitly identified in state extension service 

production cost budgets. We have also separately included part of the cost of crop insurance to the farmer 

under operating costs since this is not included in the ERS cost tables. We included that portion of the farmerpaid premium per acre from RMA’s Summary of Business data that one can attribute to prevented planting 

protection.

1.1. Determining production costs

For the nine crops covered by ARMS surveys, the production costs by farm resource region for the ten-year 

time period are available on the ERS website. Our only modification was to add part of the cost of crop 

insurance. For these crops, the regions for which there are production cost estimates are shown in Table 8. 

(For rice, ERS has California, Gulf Coast, Arkansas Non-Delta, and Mississippi River Delta, which more or less 

align with the regions shown in the table.) We also used farm resource regions for similar or related crops 

that have costs based on extension budgets, or in the case of cottonseed, costs based on joint production 

with a covered crop. Those crops are included at the bottom of Table 1.

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Table 1: Production cost budgets by farm resource region

Northern 

Great 

Plains

Heartland Northern 

Crescent

Eastern 

Uplands

Southern 

Seaboard

Mississippi 

Portal

Prairie 

Gateway

Fruitful 

Rim

Basin & 

Range

Barley

Corn

Cotton

ELS cotton

Grain sorghum

Oats

Peanuts

Rice

Soybeans

Wheat

Cottonseed

Hy. corn seed

Popcorn

Hy. Sorg. seed

Silage sorghum

For the other crops (including hybrid corn and sorghum seed, popcorn, and silage sorghum) we first researched 

where they are grown and then searched for budgets for those states covering the ten-year timeframe. A 

few state extension services regularly produce budgets for multiple crops each year that are archived online. 

More commonly only the current year is available or a budget is published every few years. And for some 

states and crops there are no budgets available. For years for which no budget was available, we used price 

indexes from USDA’s National Agricultural Statistics Service and other sources to derive the missing data from 

the years for which data was found.

The available budgets dictated the degree to which we could differentiate costs by region. Regions had to 

be defined in order to eventually compare the calculated PP costs to the indemnities paid for the 

Recommendations Report. Table 2 shows the states included in various regions for which we judged the 

available budgets to be representative. 

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Table 2: Region definitions on a state basis

Crop States in Region

Buckwheat MN, ND, SD

Canola ND

Dry beans ND, MN

Dry beans NE

Dry peas ID, MT, ND, WA

Flax ND

Green peas IA, IL, MN, WI

Hybrid sorghum seed TX

Millet CO, KS, ND, SD

Mustard ND, MT

Onions ID, OR, WA

Onions CA, GA, NM, NV, TX

Potatoes ID, OR, WA

Potatoes AL, AZ, FL, GA, TX

Processing beans DE, MD, NJ, NY, PA

Processing sweet corn WA, OR, ID

Rye ND, SD, MN

Rye KS, OK, TX

Rye WI, MI, IL

Safflower CA

Safflower MT, ND, SD

Sugar beets MI

Sugar beets CO, MN, ND, NE

Sugar beets ID, MT, OR, WY

Sunflower seed MN, ND, SD

Tobacco KY, TN

Tobacco NC, SC, VA

1.2. Determining costs incurred prior to planting

Our methodology for this step differed slightly for operating costs and overhead costs. For operating costs 

we either used the percentages that the ERS studies have developed as allocable to the pre-planting period, 

or we developed our own estimates based on extension service crop budgets and interviews with those who 

prepared them or with other experts. 

For several of the cost elements, the estimates were based on the percentage of field operations that occur 

prior to planting. Unfortunately there is no clear cut dividing line. When fields are too wet to plant, farmers 

may also have been unable to complete the seed bed preparation, weed control and/or fertilization 

operations they would normally undertake just prior to planting. The 1996 ERS study recognized this 

possibility and looked at three scenarios that differed in the degree of completion of these steps. In our 

analysis we have generally given producers the benefit of the doubt and assumed all steps are completed.

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For overhead costs we include 100% of all except labor. Farmers have to pay taxes, insurance, and general 

farm overhead costs even if they are unable to plant a particular crop. Land rent must also be paid, or funds 

tied up in owned land could have generated a return elsewhere. Similarly, machinery replacement costs are 

typically accrued each year for tax purposes via depreciation schedules and are not likely to be affected 

much by inability to plant a particular crop. Most farmers diversify their crop production and will still be

using equipment on the acreage that is unaffected.

In the case of labor, we concluded that farm operators and their hired labor typically have plenty of other 

ways to profitably use their time over the course of a season and we count only the labor input prior to 

planting. ERS includes hired labor under overhead costs, while many state extension budgets list it under 

variable operating costs. We treat it the same way in both cases. 

One cost that farmers can incur in a PP situation that may not be part of the normal cost structure is the cost 

of weed control on the unplanted land. There are three options – tillage, chemical control, or planting a 

cover crop. The typical cost per acre for tillage or chemical control is about $15. Planting a cover crop like 

annual ryegrass, radishes, or oats depends on the cost of the seed but costs were variously reported as 

between $20 and $35 per acre. However, a farmer may have weed control expenses or plant a cover crop 

after a spring-planted crop in any case. And cover crops add value in terms of soil fertility and structure. 

One recent study found that corn and soybean yields are 10% higher when following a cover crop.1 Since our 

decisions on treatment of overhead costs are overwhelmingly in favor of farmers, and since cover crops 

provide a benefit, we chose not to include cover crop costs in our calculation of costs farmers incur in a PP 

situation.

Below we provide additional comments on our treatment of each cost category.

Seed

If the crop was not planted, the seed was not used. In general we found that most farmers are able to either 

carry the seed over for a year or return it for credit or a refund. However, there are some crops, like potatoes 

or tobacco, where the seed is usually a total loss if not planted.

Fertilizer

Most fertilizer for the major field crops is applied prior to planting. There are reasonably good data from the 

ARMS surveys and extension budgets about timing of fertilizer application, and the latter provide the total 

costs per acre of the different types. Our simplifying assumption is that all nitrogen applied before planting 

is degraded and a sunk cost, while all phosphorous, potassium and other soil amendments remain in the soil 

and can be used by subsequent crops. 

Chemicals

Crop protection chemicals are mostly applied after planting, but soil fumigants and glyphosate “burndown” 

are the exceptions. We adopted whatever percentage factors for pre-planting expenses were available in 

the various source materials.

1 January 23, 2013 webinar on cover crops and crop insurance hosted by the National Center for Appropriate Technology 

and the National Sustainable Agriculture Coalition

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Custom operations

Custom operation is an aggregated category of expenses; it includes items such as soil tests and crop-specific 

operations such as aerial spraying. The farmer typically hires out these operations. Costs in this category 

that occur preplanting are generally not avoidable, e.g., soil tests are done before fertilizer applications and 

most likely before a foreseeable prevented planting situation.

The ERS studies cited earlier provide the factors for selected crops. Extension budgets varied in the degree 

to which they revealed timing of custom operations. In the absence of information, we used the percentage 

of all field operations occurring before planting.

Fuel, lube and electricity

For dryland production, the allocation to the pre-planting period was based on the percentage of field 

operations in that period. For irrigated production, energy inputs were allocated primarily to the postplanting period.

Repairs

The percentage of repairs that occur prior to planting is taken directly from the ERS data. In the cases where 

an extension budget was used, the percentage of repairs was judged to be equivalent to the percentage of 

preplant operations. 

Crop insurance

The ERS production costs do not include crop insurance because the revenue side of their cost and returns 

tables includes only market returns from the sale of the crop at average yields. State extension budgets 

sometimes do include the cost of crop insurance. We concluded that the appropriate method for this study 

was to include that portion of the average farmer-paid premium per acre from RMA’s Summary of Business 

data that one can attribute to prevented planting protection. For this purpose we used the ratio of prevented 

planting indemnities to total indemnities for the 1994-2013 period. That factor ranged from 1% for a few 

crops to more than 50% for canola, ELS cotton, burley tobacco, and rice. 

Interest on operating costs

ERS included interest only on those costs incurred prior to planting. The simple average of the shares for the 

eight crops covered in the 2007 and 2013 ERS studies is 25% and we have used that percentage for all other 

crops.

Other variable costs

Depending on the crop, these may be separately identified as purchased irrigation water, ginning (for cotton), 

straw baling (oats), transload (potatoes), etc. Some extension budgets also just have a “miscellaneous” 

category. For the most part these are costs that come only after a crop is planted, so a zero factor is applied 

for calculating the PP portion.

Labor

As discussed above, whether for hired labor or the opportunity cost of unpaid operator labor, we only include 

the labor costs associated with activities prior to planting.

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Evaluation of Prevented Planting Program: Methodology and updating procedures

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Opportunity cost of land

Some farmers own all the land they farm, some own part and rent part, and some are just renters. The 2007 

Census of Agriculture reported that 20% of the harvested cropland was on farms that are fully owned, 12% 

was on farms that fully rented, and 68% was on a mix of owned and rented land. If one owns the land, there 

is no rental payment that has to be covered when a crop is not planted. And even rental contracts may have 

provisions that adjust the payment in a prevented planting situation. Nevertheless, if a farmer or landowner 

did not have money tied up in land, it could be earning something elsewhere, so we have followed the ERS 

model of using land rental rates as the opportunity cost of the land resource. We include 100% of that rental 

rate as a pre-planting cost.

Capital recovery of machinery and equipment

This is part of the ownership costs described in Section 2.1. In this case it is the annualized cost of maintaining 

the capital investment (depreciation and interest) in farm machinery, equipment, and facilities. Since it is 

a cost that does not actually have to be covered in any particular year, there is a stronger argument than for 

land costs for not including it at all as a pre-planting cost. However, we chose to include 100% as a preplanting cost because the guarantee in RMA insurance plans is generally based on some concept of full cost 

of production.

Taxes and insurance, and general farm overhead

These are all cash outlays that must be paid on a timely basis. In cost of production budgeting, these costs 

are allocated among the various farm enterprises on the basis of the contribution of each enterprise to net 

returns. We include 100% of these costs as pre-planting costs.

1.3. Determining pre-planting costs

Once a production budget is prepared, and pre-planting percentages determined by category, one simply 

need multiply these two items together to obtain pre-planting costs by category, and to calculate the overall 

percentage of costs that should be considered preplanting costs.

In the next section, we identify how budgets and pre-planting percentages were obtained for each crop under 

consideration.

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2. METHODOLOGY BY CROP

In the final report, crops are presented in three groupings:

- Those with ARMS cost data, with updated ERS cost timing estimates;

- Those with ARMS cost data, but lacking updated ERS cost timing estimates; and

- Other crops.

In this document, we have combined the first two groupings, since their budget data all follow the same 

budget format (i.e., from ARMS). 

Therefore, the methodologies presented here cover first the ERS ARMS data crops, then all other crops, each 

in alphabetical order.

In constructing the production cost budgets, we looked at the available budgets to determine the best overall 

method of allocating costs in a reasonable accounting method. The AAEA handbook assisted with this task. 

Ultimately, it was decided that the ERS production cost accounting format was the most logical, and 

fortunately, the most widely adopted in extension budgets. In the case of crops covered by the ERS ARMS 

data, we used the exact accounting categories and data without modification. We simply removed footnotes 

and minor punctuation to fit our table format, and added a line for crop insurance costs.

Many of the extension budgets were also based on a format very close, or even identical, to the ERS format. 

For example, North Dakota State University Extension budgets, which contributed to a large number of crop 

budgets, were very similar to the ERS Commodity Costs and Returns budgets. We simply adapted them to 

our table format.

In a few cases, the university extension budgets used a very different accounting methodology. Some of 

these budgets provided very detailed information and sometimes detailed specific operations by month. For 

example, California budgets detailed the number and type of plow operations by month, the amount of each 

fertilizer, brand of insecticide, brand of herbicide etc. For budgets like this, we aggregated operations to 

approximate the ERS accounting format. For example, all the herbicides were added together into an 

“Herbicide” category.

2.1. ERS Survey data crops

Here we provide corn as an example of how we treated the ERS crops. Other ERS survey-based crops follow 

a similar methodology.

Specific calculations relevant to estimating pre-planting percentages for each crop are treated under each 

individual crop heading.

For each of the following crops, data came from the ERS. Budgets from ERS are split into farm resource 

regions. These farm resource regions are detailed in the map below.

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2.1.1. The “Production costs” tab

The following table is a copy of the ERS data. We removed the data noted in red and removed the footnote 

numbering.

Corn production costs and returns per planted acre, excluding Government payments, Heartland, 

2010-2012 1/

Item 2010 2011 2012

 dollars per planted acre

Gross value of production

 Primary product: Corn grain 723.11 883.50 811.58

 Secondary product: Corn silage 0.24 0.42 0.33

 Total, gross value of production 723.35 883.92 811.91

 

Operating costs: 

 Seed 87.72 90.78 96.53

 Fertilizer 2/ 118.09 155.18 166.40

 Chemicals 26.95 26.95 28.26

 Custom operations 3/ 15.25 15.53 15.91

 Fuel, lube, and electricity 22.18 27.76 25.95

 Repairs 21.77 22.45 23.12

 Purchased irrigation water 0.00 0.00 0.00

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 Interest on operating capital 0.29 0.17 0.24

 Total, operating costs 292.25 338.82 356.41

 

Allocated overhead: 

 Hired labor 2.61 2.64 2.75

 Opportunity cost of unpaid labor 20.21 20.42 21.28

 Capital recovery of machinery and equipment 81.22 86.16 90.40

 Opportunity cost of land (rental rate) 150.49 162.26 167.21

 Taxes and insurance 7.77 8.18 8.54

 General farm overhead 17.37 17.91 18.45

 Total, allocated overhead 279.67 297.57 308.63

 

 Total, costs listed 571.92 636.39 665.04

 

Value of production less total costs listed 151.43 247.53 146.87

Value of production less operating costs 431.10 545.10 455.50

Supporting information:

 Yield (bushels per planted acre) 167 155 119

 Price (dollars per bushel at harvest) 4.33 5.70 6.82

 Enterprise size (planted acres) 1/ 313 313 313

Production practices: 1/

 Irrigated (percent) 5 5 5

 Dryland (percent) 95 95 95

1/ Developed from survey base year, 2010.

2/ Cost of commercial fertilizers, soil conditioners, and manure.

3/ Cost of custom operations, technical services, and commercial drying.

The next table is a copy of the table we used. Note that “Crop Insurance” is a cost not accounted for in 

the RMA data. We added crop insurance to the ERS budgets. Crop insurance was derived from the RMA 

Summary of Business data, and calculated as indicated in Section 1.2. It is shown in red. 

One can see that the data is almost a line-for-line match with the ERS data. 

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Corn production costs per planted acre: Heartland

I J K L M N O P Q R

 Item 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Cash expenses:

 Seed 34.89 37.05 41.23 43.83 49.40 61.29 80.61 87.72 90.78 98.83

 Fertilizer 51.43 56.01 72.67 82.79 96.13 146.62 137.89 118.09 155.18 165.91

 Chemicals 26.50 27.11 24.71 25.73 26.55 27.68 30.52 26.95 26.95 28.45

 Custom operations 10.09 10.53 8.99 9.40 9.80 9.80 10.47 15.25 15.53 15.82

 Fuel, lube, and electricity 18.81 25.41 20.32 22.48 25.00 32.73 22.13 22.18 27.76 26.10

 Repairs 12.63 13.82 12.23 12.67 13.11 13.46 13.72 21.77 22.45 23.12

 Purchased irrigation water 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

 Crop Insurance 8.17 9.95 8.43 10.03 17.28 23.21 17.54 14.05 23.15 20.11

 Interest on operating costs 0.79 1.26 3.07 4.66 4.85 2.16 0.43 0.29 0.17 0.24

 Total, operating costs 163.31 181.14 191.65 211.59 242.12 316.95 313.31 306.30 361.97 378.58

Allocated overhead:

 Hired Labor 2.30 2.30 1.41 1.46 1.51 1.56 1.59 2.61 2.64 2.75

 Opportunity cost of unpaid labor 23.79 24.28 19.8 20.52 21.24 21.96 22.44 20.21 20.42 21.28

 Capital recovery of machinery & equip. 53.06 58.11 60.45 63.59 66.73 73.02 77.56 81.22 86.16 90.75

 Opportunity cost of land (rental rate) 100.28 103.58 104.87 103.16 110.48 123.66 142.36 150.49 163.77 184.42

 Taxes and insurance 5.19 5.24 6.06 6.37 6.88 7.64 7.46 7.77 8.18 8.62

 General farm overhead 10.93 11.17 12.14 12.57 13.00 13.35 13.61 17.37 17.91 18.45

 Total, allocated overhead 195.55 204.68 204.73 207.67 219.84 241.19 265.02 279.67 299.08 326.27

 Total costs listed 358.86 385.82 396.38 419.26 461.96 558.14 578.33 585.97 661.05 704.85

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The above example applies to the following crops

• Barley

• Corn

• Cotton

• Cottonseed

• Oats

• Rice 

• Rye

• Sorghum grain

• Sugar beets (see note in Special cases)

• Soybeans

• Wheat

2.1.2. The “Preplant” tab

The data used to calculate the preplant percentages also came from ERS calculations, where available. The 

following table shows the preplant percentage estimates of Heartland corn (following the same budget 

format presented earlier). 

Corn - share of expenses incurred before planting: Heartland

 Item 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Cash expenses:

 Seed 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

 Fertilizer 31% 31% 31% 31% 31% 31% 31% 31% 31% 31%

 Chemicals 21% 21% 21% 21% 21% 21% 21% 21% 21% 21%

 Custom operations 28% 28% 28% 28% 28% 28% 28% 28% 28% 28%

 Fuel, lube, and electricity 22% 22% 22% 22% 22% 22% 22% 22% 22% 22%

 Repairs 19% 19% 19% 19% 19% 19% 19% 19% 19% 19%

 Purchased irrigation 

water

0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

 Crop Insurance 13% 13% 13% 13% 13% 13% 13% 13% 13% 13%

 Interest on operating 

costs

32% 32% 32% 32% 32% 32% 32% 32% 32% 32%

Allocated overhead:

 Hired Labor 34% 34% 34% 34% 34% 34% 34% 34% 34% 34%

 Opportunity cost of 

unpaid labor 31% 31% 31% 31% 31% 31% 31% 31% 31% 31%

 Capital recovery of 

machinery & equip. 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

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 Opportunity cost of land 

(rental rate) 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

 Taxes and insurance 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

 General farm overhead 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

The percentages for the crops for which there was ERS data generally came from the ERS data. However,

as noted earlier, not all categories were accounted as the ERS allocates them (we described our general 

methodology for determining preplanting percentages in section 1.2).

Crop specific details and exceptions are given in the pages that follow.

2.1.3. Barley

Agralytica used crop production cost data from ERS, based on ARMS surveys (2011, 2003). Budgets were 

constructed for five regions: Basin and Range, Fruitful Rim, Northern Great Plains, Heartland, and Northern 

Crescent. 

Production costs (Tab 1)

1. Begin with ERS production cost data for 2003-2012.

Pre-planting percentage costs by expense category (Tab 2)

2. For the budget, we used the following pre-planting cost percentages, most drawn from ERS 

analysis of cost data:

Cash expenses:

- 30% for fertilizer

- 17% for chemicals

- 29% for custom operations

- 23% for fuel, lube, and electricity

- 20% for repairs

- 31% for crop insurance (reflective of the PP share of indemnities, 1994-2013)

- 29% for hired labor

- 25% for interest on operating costs

Overhead expenses:

- 25% of operator labor

- 100% of capital recovery of machinery & equipment

- 100% of taxes and insurance

- 100% of land charge

- 100% of general farm overhead

Pre-planting cost estimates (Tab 3)

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3. Multiply appropriate cells on Tabs 1 and 2.

4. Copy values from “Total cost” line on Tab 1 to Tab 3.

5. Calculate pre-planting costs as a percentage of total costs.

Barley - References

Crop budgets available from:

http://www.ers.usda.gov/data-products/commodity-costs-and-returns.aspx

Other sources of information:

Agricultural Marketing Resource Center – Barley profile

http://www.agmrc.org/commodities__products/grains__oilseeds/barley-profile/

Idaho Spring Barley Production Guide

http://www.cals.uidaho.edu/edcomm/pdf/BUL/BUL0742.pdf

Irrigated Malt Barley Production (North Dakota)

http://www.ag.ndsu.edu/ibms/producers/documents/IrrigatedMaltBarleyProduction_001.pdf

Montana Barley Production Guide

http://msuextension.org/publications/AgandNaturalResources/EB0186.pdf

2.1.4. Corn

On its website, ERS provides annual estimates of corn production costs for six farm resource regions. These 

are based on the periodic ARMS surveys. We use these costs as our starting point. For most cost elements 

we use the preplanting percentages developed by ERS in their 2013 study.

In the case of fertilizer, ERS estimated that 63% of costs are incurred prior to planting. However, any 

phosphorus or potassium that has been applied remains in the soil and is available for a subsequent crop. 

Nitrogen is more degradable. ARMS data for 2010 reveals that 91% of the potassium and 77% of the 

phosphorus are applied in the fall or spring prior to planting. For nitrogen, 18% is applied in the fall and 

50% in the spring prior to planting. However, in a PP situation, some of that spring fertilization may not 

occur due to wet conditions and anticipation of not planting.

State crop budgets indicate that nitrogen accounts for 55% of fertilizer costs. Multiplying that share of 

value times the share of pounds applied in a prevented planting situation indicates that 37% of the fertilizer 

dollars are expended on an input that degrades so that it is unavailable to a subsequent crop (see table 

below). This is just under half of the total expended. Thus we can estimate that 31% of fertilizer costs are 

incurred in a PP situation (37/75*63).

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Corn fertilizer assessment

Input

Share of 

group

Applied 

preplanting$ Share 

Expended

Nitrogen 55 68 37

Phosphorous 23 77 18

Potassium/other 22 91 20

 Total 100 - 75

References:

“Corn Production Handbook” – Kansas State University

http://www.ksre.ksu.edu/mil/Resources/Crop%20Production%20Handbooks/Corn.pdf

“The North Carolina Corn Production Guide” - NC State University

http://www.ces.ncsu.edu/plymouth/cropsci/cornguide/

2.1.5. Cotton

Cotton lint and cotton seed are joint products. When cotton is ginned, the process separates the lint from 

the cottonseed, which then goes on to be crushed, yielding cottonseed oil and cottonseed meal. The grower 

gets payments from the ginner for both the lint and the seed.

The ERS cost and return estimates for cotton include returns per acre for both lint and seed. For the years 

under study, there are two distinct periods for the relationship between lint and seed returns. During 2003-

2007, the returns from lint averaged 85% of total returns. During 2008-2012, the average fell to 81% due to 

higher US and world market prices for protein meal and vegetable oil relative to cotton fiber.

Since lint and seed are joint products, and the seed yield guarantee is linked to the lint yield guarantee, 

one can simply make a pro rata attribution of the appropriate portion of production costs. In attributing 

cotton production costs to the preplanting period, we include only 85% of those costs for 2003-2007 and 

81% for 2008-2012. That is all that the prevented planting indemnity for cotton should cover. The 

remainder would be covered by the cottonseed prevented planting indemnity if the farmer buys that 

coverage.

We have relied primarily on the ERS analysis for most of the pre-planting cost factors. We include only a 

very small factor for crop insurance due to the low incidence of prevented planting. The one other 

adjustment we make to the ERS factors is for fertilizer, based on an assessment of how much of what is 

applied before planting is lost and how much remains in the soil for future use. Our simplifying assumption 

is that all nitrogen is lost and all phosphorous, potassium and other soil amendments remain.

The more recent ARMS surveys collect information on timing of fertilizer application. This data is accessible 

via the ARMS app at http://www.ers.usda.gov/data-products/arms-farm-financial-and-cropproduction-practices/tailored-reports.aspx. Under “Crop Production Practices” one selects the 

“Nutrient Use by Application Timing” report. In general, the data are valid only at the national level. In 

the case of cotton, the shares reportedly applied before planting in 2007 are shown in the table below. 

The next step is to calculate the share of costs incurred that is lost. A review of cotton budgets for Texas, 

Arkansas, Alabama, Georgia, North Carolina and South Carolina suggests that nitrogen fertilizers account 

for about half of total fertilizer costs. The middle column shows the ARMS survey estimates of the 

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percentage of pounds applied prior to planting. The last column is the product of the first two. In this case 

34% (20 divided by 58) of the pre-planting expenditure is on nitrogen and is a non-recoverable cost. Applying 

this to the ERS factor of 43% yields a fertilizer cost factor of 15%.

Cotton fertilizer assessment

Input

Share of 

group

Applied 

preplanting$ Share 

Expended

Nitrogen 50 39 20

Phosphorus 20 77 15

Potassium/other 30 78 23

 Total 100 - 58

References:

“2013 Cotton Guide” - NC State Cooperative Extension

http://www.cotton.ncsu.edu/guide/Cotton2013_guide.pdf

“Cotton Production in West Central Texas” – Texas A&M Agrilife Extension

http://sanangelo.tamu.edu/extension/agronomy/agronomy-publications/cotton-production-inwest-central-texas/

2014 Georgia Cotton Production Guide – University of Georgia Cooperative Extension

http://www.ugacotton.com/production-guide/

2.1.6. Cottonseed

The cottonseed endorsement establishes a grower’s guarantee using an established price for cottonseed 

and a yield that is calculated in relation to lint yield using a conversion factor determined by RMA. Both of 

these are shown in the actuarial documents, on the price and rates pages.

Since lint and seed are joint products, and the seed yield guarantee is linked to the lint yield guarantee, 

one can simply make a pro rata attribution of the appropriate portion of production costs, in the same 

fashion as for upland and ELS cotton. As part of the attribution of costs for cottonseed to the preplanting 

period, we include only 15% of those costs for 2003-2007 and 19% for 2008-2012. These factors are applied 

in the PP cost worksheets.

References:

“Cottonseed And Its Products” – National Cottonseed Products Association

http://www.cottonseed.com/publications/cottonseedanditsproducts.asp

MRC Seeds

http://www.mrcseeds.com/cotton-seeds/

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2.1.7. Oats

On its website, ERS provides annual estimates of oat production costs. These are based on the periodic 

ARMS surveys. We use these costs as our starting point. In the case of oats, no estimates of actual preplanting percentages are calculated so we used spring wheat factors used as a starting point. 

Production costs (Tab 1)

1. Begin with ERS production costs for oats (four regions): http://www.ers.usda.gov/dataproducts/commodity-costs-and-returns.aspx.

2. Production costs for 2003 and 2004 were filled using the formula that draws data from price indexes 

(Col A) and calculates values for that year based on the accompanying “Cost Index” data file.

Pre-planting percentage costs by expense category (Tab 2)

3. For the budgets, we used the following pre-planting cost percentages; most are the measured 

spring wheat factors, which can serve as a proxy for oats.

Cash expenses:

- 24% of fertilizer,

- 18% of chemicals,

- 15% of custom operations,

- 21% of fuel & lubrication,

- 18% of repairs,

- 11% of crop insurance (the percentage of farmer premium attributable to PP indemnities),

- and 25% of interest on operating costs.

And most overhead:

- 28% of hired labor

- 22% of operator labor,

- 100% of machinery capital recovery costs, 

- 100% of land charge,

- 100% of taxes and insurance,

- and 100% of general farm overhead.

Pre-planting cost estimates (Tab 3)

4. Multiply appropriate cells on Tabs 1 and 2.

5. Calculate pre-planting costs as a percentage of total costs.

References:

Farm management practices were obtained from the following sources:

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“Oat production no. 0.119” Colorado State University Extension

http://extension.oregonstate.edu/gilliam/sites/default/files/Oat_production.pdf

“Planting and Management Practices for Wheat and Oats” LSU Agricultural Center

http://www.lsuagcenter.com/MCMS/RelatedFiles/%7B0217A37E-DDD5-410C-ACCB9240D96B1EDF%7D/PlantingManagementPractices.pdf

“Oat Production in South Dakota” South Dakota State University Cooperative Extension Service

https://www.sdstate.edu/sdces/resources/crops/weeds/upload/48-FS384-Oat-Production-inSD-1981.pdf

“Oat Production in North Dakota” North Dakota State University Cooperative Extension Service

http://www.hort.purdue.edu/newcrop/crops/oats.html

2.1.8. Peanuts

The production costs are published annually by the Economic Research Service and rely on one of the older 

ARMS surveys, covering the 2004 crop. A survey covering the 2013 peanut crop is currently underway.

The ERS data for Fruitful Rim does not include 2003. We used price indexes to estimate costs for that year.

The factors for allocating the different costs were chosen based on evaluating crop budgets from Georgia, 

South Carolina, North Carolina and Virginia, and on discussions with peanut experts. All of these budgets 

broke out key costs by field operation, so we were able to allocate chemical, fuel, labor, and machinery 

repair costs to reflect those breakdowns.

For these budgets, we used the following pre-planting cost percentages:

• Seed: 0% because prevented planting is a rare event for peanuts and dealers allow seed

returns.

• Fertilizer: 0% because any fertilizer, lime or gypsum applied remain available for another crop

• Chemicals: 30%

• Fuel, lubrication, and repairs: 33%

• Repairs: 25%

• Operator and hired labor: 28%

• Crop insurance: 1%, the PP share of total liabilities

• Interest on operating capital: 25%

And all overhead except labor is included at 100%.

References:

Texas Peanut Production Guide

http://publications.tamu.edu/PEANUTS/PUB_peanuts_Texas%20Peanut%20Production%20Guide

.pdf

Georgia 2012 Peanut Production Update

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http://www.caes.uga.edu/commodities/fieldcrops/peanuts/documents/2012PeanutProduction

UpdateGuide.pdf

2.1.9. Rice

Production costs (Tab 1)

1. Begin with ERS production costs estimates for rice

Pre-planting percentage costs by expense category (Tab 2)

2. For these budgets, we used the following pre-planting cost percentages, mostly based on the 2007 

ERS study results:

• Fertilizer: 27%

• Chemicals: 8%

• Custom operations: 13% for 2003-2005, 25% thereafter due splitting out commercial drying 

into a separate category

• Fuel, lubrication, and electricity: 10%

• Repairs: 23%

• Hired labor: 46%

• Crop insurance: 56%, the share that PP indemnities are of total indemnities

• Interest on operating capital: 16%

And most overhead

• Hired labor: Operator labor: 49%

• Capital machinery costs: 100%

• Land: 100%

• Taxes and insurance: 100%

• General farm overhead: 100%

Pre-planting cost estimates (Tab 3)

3. Multiply appropriate cells on Tabs 1 and 2.

4. Copy values for “Total cost” from Tab 1 to Tab 3

5. Calculate pre-planting costs as a percentage of total costs

References:

Budgets:

University of California Davis

http://coststudies.ucdavis.edu/files/2012/RiceSV2012.pdf

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University of Arkansas – Research & Extension (2013)

http://www.uaex.edu/depts/ag_economics/default.htm (main page)

http://www.uaex.edu/depts/ag_economics/budgets/2014/Budgets2014.pdf (enterprise budgets)

Other:

Rice Production in Louisiana

http://www.lsuagcenter.com/NR/rdonlyres/76225F15-7765-4AA0-8BB8-

8CC77067B665/90660/2013RiceBudgets.pdf

Rice Production Best Management Practices

http://www.agmrc.org/media/cms/2805rice_412982BFD8BCD.pdf

Agricultural Marketing Resource Center - Rice

http://www.agmrc.org/commodities__products/grains__oilseeds/rice/

2.1.10. Sorghum grain

Production costs (Tab 1)

1. Used ERS data for the four major growing regions. Heaviest production of sorghum is in the Prairie 

Gateway resource region.

2. Crop insurance costs were added from RMA data

Pre-planting percentage costs by expense category (Tab 2)

3. For the budget, we used the following pre-planting cost percentages, which were provided 

primarily from the ERS survey data:

Cash expenses:

- 0% for seed,

- 31% of fertilizer (50% of fertilizer was nitrogen, and 61% of nitrogen was estimated to be 

applied pre-planting)

- 40% of chemicals

- 17% of custom operations

- 16% of fuel, lube, and electricity

- 24% of repairs

- 4% of crop insurance, and 

- 27% of interest on operating costs 

Overhead:

- 36% of hired labor,

- 27% of the opportunity cost of unpaid labor,

- 100% of the capital recovery of machinery & equipment,

- 100% of the opportunity cost of land,

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- 100% of taxes and insurance, and 

- 100% of general farm overhead

Pre-planting cost estimates (Tab 3)

4. Multiply appropriate cells on Tabs 1 and 2.

5. Link “Total cost” values from Tab 1 on Tab 3. 

6. Calculate pre-planting costs as a percentage of total costs.

References:

“Nutrient Management Suggestions for Grain Sorghum” (University of Nebraska-Lincoln)

http://www.ianrpubs.unl.edu/pages/publicationD.jsp?publicationId=671

“Sorghum Fertility Management,” Bill McClure, Pioneer

https://www.pioneer.com/home/site/ca/template.CONTENT/products/sorghum/productionmanual/guid.AE3799A5-A380-492A-B5DF-1D49E8B1735B

“Grain Sorghum,” University of Arizona

http://cals.arizona.edu/crops/soils/aznsorghum.pdf

Grain Sorghum Production Calendar

http://pods.dasnr.okstate.edu/docushare/dsweb/Get/Document-2620/PSS-2113web.pdf

Others

http://sorghumcheckoff.com/for-farmer/production-tools/

http://sorghumcheckoff.com/wp-content/uploads/2012/06/WhatisSorghum.pdf

2.1.11. Sorghum silage

Production costs (Tab 1)

1. Used ERS data for the four major growing regions. Heaviest production of sorghum is in the Prairie 

Gateway.

2. Crop insurance costs were added from RMA data

Pre-planting percentage costs by expense category (Tab 2)

3. For the budget, we used the following pre-planting cost percentages, which were provided 

primarily from the ERS survey data:

Cash expenses:

- 0% for seed,

- 35% of fertilizer (50% of fertilizer was nitrogen, and 70% of nitrogen was estimated to be 

applied pre-planting)

- 40% of chemicals

- 17% of custom operations

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Evaluation of Prevented Planting Program: Methodology and updating procedures

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- 16% of fuel, lube, and electricity

- 24% of repairs

- 2% of crop insurance, and 

- 27% of interest on operating costs 

Overhead:

- 36% of hired labor,

- 27% of the opportunity cost of unpaid labor,

- 100% of the capital recovery of machinery & equipment,

- 100% of the opportunity cost of land,

- 100% of taxes and insurance, and 

- 100% of general farm overhead

Pre-planting cost estimates (Tab 3)

4. Multiply appropriate cells on Tabs 1 and 2.

5. Link “Total cost” values from Tab 1 on Tab 3. 

6. Calculate pre-planting costs as a percentage of total costs.

References:

ERS ARMS survey: 

Estimation of the Preplanting and Planting Costs by Crop, Staff Analysis #13-468 (Internal use), Dec 2013

Texas A&M:

http://agecoext.tamu.edu/resources/crop-livestock-budgets/budgets-by-commodity/sorghum/

http://agecoext.tamu.edu/files/2013/10/sorgsilpifob.pdf (pivot irrigated grain sorghum silage)

http://agecoext.tamu.edu/files/2013/10/sorgpi.pdf (pivot irrigated grain sorghum)

“The Economic Benefits of Forage Sorghum Silage as an Alternative Crop” (Texas A&M)

http://publications.tamu.edu/FORAGE/PUB_forage_Economic%20Benefits%20of%20Forage.pdf

“Sorghum – Forage” (Univ. of Wisconsin-Extension)

http://www.hort.purdue.edu/newcrop/afcm/forage.html

“Forage Sorghum Silage Cost-Return Budget in South Central Kansas”

http://www.ksre.ksu.edu/bookstore/pubs/mf648.pdf

2.1.12. Soybeans

We have relied primarily on the ERS analysis for most of the pre-planting cost factors. We include the 13% 

of the farmer paid crop insurance premium attributable to PP indemnities. The one other adjustment we 

make to the ERS factors is for fertilizer, based on an assessment of how much of what is applied before 

planting is lost and how much remains in the soil for future use. Our simplifying assumption is that all 

nitrogen is lost and all phosphorous, potassium and other soil amendments remain.

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The more recent ARMS surveys collect information on timing of fertilizer application. This data is accessible 

via the ARMS app at http://www.ers.usda.gov/data-products/arms-farm-financial-and-cropproduction-practices/tailored-reports.aspx. Under “Crop Production Practices” one selects the 

“Nutrient Use by Application Timing” report. In general, the data are valid only at the national level. The 

other information one needs is the relative value of the nitrogen used versus the value of the other 

fertilizers. One has to obtain this from state extension budgets that provide more detail.

In the case of soybeans, hardly any budgets show any application of nitrogen, since soybeans are a nitrogen 

fixing crop. The one exception we found was a Nebraska budget that included application of a small amount 

of liquid ammonium thiosulfate which is 12% nitrogen and 26% sulfur. However, ARMS survey data report 

that nitrogen accounted for about 10% of the total pounds of fertilizer applied for soybeans in 2006. The 

shares reportedly applied before planting are shown in the table below. However, one should keep in mind 

that the wet conditions that typically prevent planting would also prevent much of the spring application 

of fertilizer prior to planting, so these are likely to result in over-estimates of fertilizer costs in a PP 

situation.

The next step is to calculate the share of costs incurred that is lost. An average of budgets from nine states 

showed phosphorous accounting for 43% of fertilizer costs, and potassium and other soil amendments like 

lime accounting for 57%. Our subjective estimate of cost shares, reflecting the different data sources and 

the fact that phosphorous is more expensive, is shown in the first column of the following table. The middle 

column shows the ARMS survey estimates of the percentage of pounds applied prior to planting. The last 

column is the product of the first two. In this case 4.4% (4 divided by 90) of the pre-planting expenditure 

is on nitrogen and is a non-recoverable cost. Applying this to the ERS factor of 80% yields a fertilizer cost 

factor of 4%.

Soybean fertilizer assessment

Input

Share of 

group

Applied 

preplanting$ Share 

Expended

Nitrogen 5 82 4

Phosphorous 41 84 34

Potassium/other 54 96 52

 Total 100 - 90

2.1.13. Wheat

We have relied primarily on the ERS analysis for most of the pre-planting cost factors.

We add crop insurance costs, i.e. the share for the farmer paid premium attributable to PP indemnities. 

The one other adjustment we make to the ERS factors is for fertilizer, based on an assessment of how much 

of what is applied before planting is lost and how much remains in the soil for future use. Our simplifying 

assumption is that all nitrogen is lost and all phosphorous, potassium and other soil amendments remain.

The more recent ARMS surveys collect information on timing of fertilizer application. This data is accessible 

via the ARMS app at http://www.ers.usda.gov/data-products/arms-farm-financial-and-cropproduction-practices/tailored-reports.aspx. Under “Crop Production Practices” one selects the 

“Nutrient Use by Application Timing” report. In general, the data are valid only at the national level. The 

other information one needs is the relative value of the nitrogen used versus the value of the other 

fertilizers. One has to obtain this from state extension budgets that provide more detail.

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In the case of wheat, timing estimates are available for both winter and spring wheat in 2009. The shares 

reportedly applied before planting are shown in the tables below. However, one should keep in mind that 

the wet conditions that typically prevent planting would also prevent much of the spring application of 

fertilizer prior to planting, so these are likely to result in over-estimates of fertilizer costs in a PP situation.

The next step is to calculate the share of costs incurred that is lost. A review of winter wheat budgets for 

Kansas, Nebraska, Idaho and Wisconsin suggests that nitrogen fertilizers account for about two thirds of 

total fertilizer costs. However, none of these include potassium, and yet the ARMS data show that potassium 

accounts for about 30% of the pounds applied to winter wheat. Our subjective estimate of cost shares, 

reflecting the different data sources and the fact that phosphorous is more expensive, is shown in the first 

column of the table below. The middle column shows the ARMS survey estimates of the percentage of 

pounds applied prior to planting. The last column is the product of the first two. In this case 30% (16 

divided by 54) of the pre-planting expenditure is on nitrogen and is a non-recoverable cost. Applying this 

to the ERS factor of 38% yields a fertilizer cost factor of 11%.

Winter wheat fertilizer assessment

Input

Share of 

group

Applied 

preplanting

$ Share 

Expended

(percent)

Nitrogen 40 41 16

Phosphorous 30 46 14

Potassium/other 30 78 23

 Total 100 - 54

The next table shows the calculation for spring wheat. There are few spring wheat budgets that break 

down fertilizer costs by type. Budgets for Idaho and Washington show use of nitrogen, phosphorous and 

sulfur. But again, ARMS data show significant use of potassium for winter wheat – 19% of total pounds - so 

we have made our own estimate of shares. For spring wheat, 62% (33/53) of the pre-planting expenditure 

is on nitrogen. Applying this to the ERS factor of 38% yields a fertilizer cost factor of 24% for spring wheat.

Spring wheat fertilizer assessment

Input

Share of 

group

Applied 

preplanting$ Share 

Expended

Nitrogen 50 65 33

Phosphorous 34 32 11

Potassium/other 16 60 10

 Total 100 - 53

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Most of the ERS resource regions are winter wheat areas and we have used the winter wheat factors for 

them. For two regions we use a weighted average of the winter and spring wheat factors. For Fruitful Rim 

the weights are 25% spring and 75% winter. For Northern Great Plains the weights are 75% spring and 25% 

winter.

2.2. Budget based crops

2.2.1. Buckwheat

Buckwheat budgets for the years 2004-2012 came from North Dakota State University Extension Service. 

Budgets are separated into one of nine regions in the state. Each budget follows the ERS format very closely 

so no changes were made to the format. Budgets from the buckwheat growing regions were simply averaged 

together to get a state average by year. This average was used as the values for the cost of production. 

The production costs for 2003 were imputed using the price index.

Preplant percentages were obtained using production and timing information provided by Andrew Swenson, 

Extension Farm and Farm Resource Management Specialist at the North Dakota State University Extension 

office.

Agralytica used North Dakota University Extension budgets to estimate prevented planting costs. North 

Dakota is one of the larger buckwheat producers, and budgets were unavailable for Washington and New 

York. Also, North Dakota accounts for all of the prevented planting claims. 

Budgets were available for seven regions within the state, and were averaged over all regions for each year.

Production costs (Tab 1)

1. Begin with NDSU crop budgets for buckwheat (2004-2012), averaging figures for the state’s 7 

buckwheat producing regions for each year.

2. Production costs for 2003 were filled using the formula that draws data from price indexes 

(Col A) and calculates values for that year based on the accompanying “Cost Index” data file.

3. Returns to labor & management were averaged for all years (2003-2012), the resulting average 

applied as the 2008 value, then values for preceding and subsequent years were calculated 

using the price indexes.

Pre-planting percentage costs by expense category (Tab 2)

4. For the budget, we used the following pre-planting cost percentages:

Cash expenses:

20% of herbicides, 

13% of crop insurance,

20% of fuel & lubrication and repairs

10% of miscellaneous costs

25% of operating interest 

And almost all overhead:

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20% of labor and management,

- 100% misc. overhead, 

100% of machinery depreciation, 

100% of machinery investment, and

100% of land charge

Pre-planting cost estimates (Tab 3)

5. Multiply appropriate cells on Tabs 1 and 2.

6. Copy and paste values from “Total cost” line on Tab 1 to Tab 3.

7. Calculate pre-planting costs as a percentage of total costs.

References:

North Dakota crop budgets available at:

http://www.ag.ndsu.edu/farmmanagement/crop-budget-archive

Other sources of information:

http://www.agmrc.org/commodities__products/specialty_crops/buckwheat-profile/

http://www.hort.purdue.edu/newcrop/afcm/buckwheat.html

2.2.2. Canola

Canola budgets for the years 2004-2012 came from North Dakota State University Extension Service. Budgets 

are separated into one of nine regions in the state. Each budget follows the ERS format very closely so no 

changes were made to the format. Budgets from the Canola growing regions were simply averaged together 

to get a state average by year. This average was used as the values for the cost of production. The 

production costs for 2003 were imputed using the price index.

Preplant percentages were obtained using production and timing information provided by Andrew Swenson, 

Extension Farm and Farm Resource Management Specialist at the North Dakota State University Extension 

office.

Agralytica used North Dakota State University Extension budgets to estimate prevented planting costs. 

North Dakota is the primary canola producer in the US. Budgets were available for eight regions within the 

state, and were averaged across all regions for each year.

Production costs (Tab 1)

1. Begin with NDSU crop budgets for buckwheat (2004-2012), averaging figures for the state’s 7 

buckwheat producing regions for each year.

2. Production costs for 2003 were filled using the formula that draws data from price indexes 

(Col A) and calculates values for that year based on the accompanying “Cost Index” data file.

Pre-planting percentage costs by expense category (Tab 2)

3. For the budget, we used the following pre-planting cost percentages:

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Evaluation of Prevented Planting Program: Methodology and updating procedures

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Cash expenses:

25% of fertilizer;

25% of fuel & lubrication and repairs,

56% of crop insurance, and

25% of operating interest 

And almost all overhead:

25% of labor and management,

- 100% misc. overhead, 

100% of machinery depreciation, 

100% of machinery investment, and

100% of land charge

Pre-planting cost estimates (Tab 3)

4. Multiply appropriate cells on Tabs 1 and 2.

5. Copy and paste values from “Total cost” line on Tab 1 to Tab 3.

6. Calculate pre-planting costs as a percentage of total costs.

References:

North Dakota crop budgets available at:

http://www.ag.ndsu.edu/farmmanagement/crop-budget-archive

Great Plains Canola Production Handbook June 2012

http://www.hort.purdue.edu/newcrop/afcm/canola.html

2.2.3. Dry Beans

Two sources of dry bean budgets were found. North Dakota State University Extension Service published 

dry bean budgets for the years 2004-2012. Nebraska University Extension Office published budgets for dry 

beans in 2004, 2006, 2009, and 2012.

North Dakota budgets are separated into one of nine regions in the state. Each budget follows the ERS 

format very closely so no changes were made to the format. Budgets from the Dry beans growing regions 

were simply averaged together to get a state average by year. This average was used as the values for the 

cost of production. The production costs for 2003 were imputed using the price index.

Preplant percentages were obtained using production and timing information provided by Andrew Swenson, 

Extension Farm and Farm Resource Management Specialist at the North Dakota State University Extension 

office.

Nebraska dry bean budgets were only published for four years, 2004, 2006, 2009, and 2012. There were 

numerous issues with these budgets but nothing serious enough to discount their inclusion. In each of the 

budgets there are detailed line items of particular products used Such as Basagran, AsanaXL04, and Warrior 

T06. These were simply added together under the appropriate category such as Insecticide. 

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Also, in the 2004 and 2006 budgets, fixed costs, such as crop insurance, taxes, depreciation, and land are 

included, However in 2009 and 2012 these categories were not updated. These production costs were 

estimated for 2009 and 2012 using the index.

In addition, in 2012, the Extension office published three dry bean budgets. The 2004, 2006, and 2009 

budgets were based on conventional till, center pivot irrigated at 800 GPM at 35 PSI for 8 acre-inches 

production costs. The 2012 budget was broken into three different production types;

• Conventional till, gravity irrigated canal water at 12 acre-inches

• Conventional till, pivot irrigated pumped water at 12 acre-inches

• Conventional till, center pivot irrigated at 800 GPM at 35 PSI for 8 acre-inches

We averaged these three budgets together to construct an average of the different production types into 

one 2012 budget.

We combined this with the budgets from the other years and imputed missing values using the index.

Nebraska production budget mapping

Dry Beans Pivot 800 GPM 35PSI Conventional 2009

Field operations

Field cultivation $3.93

Disc $7.51

Spray(attached) $0.62

Plant $9.19

Hoe $2.99

Row Crop Cultivation $7.35

Ridge Cultivation $8.92

Weed

PivotE125'Lift $36.91

Spray

Pickett Windrower 11.7

Combine $24.50 Items 2009

Truck Field operations 123.50

Plant Wheat cover crop 9.88 Materials and services:

Total For field operations $123.50 Fertilizer 64.71

 Herbicide 22.12

Materials & Services Seed 31.00

10-34-0-1z Fertilizer 64.71 Other 39.25

Eptam 7E 04, Dual II Magnum 06, Herbicide $22.12 Insecticide 3.24

Sonalan Herbicide Custom 8.20

Edible Beans Seed $25.00 Scouting drybeans 11.08 Imputed

Weeding Other $36.00 Drybean premium 19.64 Imputed

Elec Connect fees Other $3.25 Crop Insurance 18.74 Imputed

Aerial Spray Custom $4.20 Interest 6.26 Imputed

Asana XL 04, Warrior T 06, 09 Insecticide $3.24 Total 347.75

Haul Grain cwt Custom $4.00 Allocated overhead

Wheat Seed $6.00 Farm overhead 8.98 Imputed

Total Materials & Services Management incl scouting 35.84 Imputed

 Machinery taxes, housing, ins & int 24.46 Imputed

Total Irrigation system taxes, ins & int 15.36 Imputed

Interest Land incl interest and depreciation 143.55 Imputed

Total Total, allocated overhead 228.18

Overheads including acctg, liab ins, vehicle, office exp ?

Management including scouting and crop insurance ? Total costs listed 575.93

Machinery taxes, housing, insurance & interest ?

Irrigation system taxes, insurance & interest ?

Land incl interest and depreciation ?

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Nebraska

Production costs (Tab 1)

1. Begin with published Nebraska crop budgets for dry beans (2004, 2006, 2009, and 2012), averaging 

figures for 2012 for the three dry bean production methods.

2. Where production costs were missing, they were imputed using the NASS Farm Price index. The 

price index and cost data were used together to establish base prices from the years we had data. 

The formula draws data from price indexes (Col A) and calculates values for that year based on 

the accompanying “Cost Index” data file.

3. We added in a separate line for Crop insurance, subtracting this amount from the original budget’s 

line item called “Management, including scouting & crop insurance” so as to avoid double counting.

4. The 2012 Nebraska budget was not quite comparable to the 2004, 2006, and 2009 budgets. 

Overhead costs were missing for 2012. These were imputed using the NASS Farm Price index.

Pre-planting percentage costs by expense category (Tab 2)

5. For the budget, we used the following pre-planting cost percentages:

Cash expenses:

20% of field operations,

20% of herbicides, 

20% of other costs,

31% of crop insurance,

25% of operating interest, 

And most overhead:

100% of farm overhead, 

20% of management including scouting 

100% of machinery taxes, housing, insurance & interest

100% of irrigation systems, 

and 100% of land charge.

Pre-planting cost estimates (Tab 3)

6. Multiply appropriate cells on Tabs 1 and 2.

7. Copy and paste values from “Total cost” line on Tab 1 to Tab 

8. Calculate pre-planting costs as a percentage of total costs.

North Dakota

Production costs (Tab 1)

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1. Begin with the crop budgets for dry beans (2004-2012), averaging figures for the state’s dry bean 

producing regions.

2. Where production costs were missing (2003), they were imputed using the NASS Farm Price index. 

The price index and cost data were used together to establish base prices from the years we had 

data. The formula draws data from price indexes (Col A) and calculates values for that year based 

on the accompanying “Cost Index” data file.

Pre-planting percentage costs by expense category (Tab 2)

3. For the budget, we used the following pre-planting cost percentages:

Cash expenses:

20% of chemicals, 

31% of crop insurance,

20% of fuel & lubrication and repairs,

20% of miscellaneous expenses,

25% of operating interest 

And almost all overhead:

100% misc. overhead, 

100% of machinery depreciation, 

100% of machinery investment, 

and 100% of land charge

Pre-planting cost estimates (Tab 3)

4. Multiply appropriate cells on Tabs 1 and 2.

5. Copy and paste values from “Total cost” line on Tab 1 to Tab 

6. Calculate pre-planting costs as a percentage of total costs.

References:

North Dakota archived budgets

http://www.ag.ndsu.edu/farmmanagement/crop-budget-archive

Nebraska archived budgets

http://www.ianrpubs.unl.edu/pages/publicationD.jsp?publicationId=597

Michigan archived budgets

http://www.agecon.purdue.edu/extension/pubs/

2.2.4. Dry Peas

Dry pea budgets for the years 2004-2012 came from North Dakota State University Extension Service. 

Budgets are separated into one of nine regions in the state. Each budget follows the ERS format very closely 

so no changes were made to the format. Budgets from the dry pea growing regions were simply averaged 

together to get a state average by year. This average was used as the values for the cost of production. 

The production costs for 2003 were imputed using the price index.

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Preplant percentages were obtained using production and timing information provided by Andrew Swenson, 

Extension Farm and Farm Resource Management Specialist at the North Dakota State University Extension 

office.

Production costs (Tab 1)

1. Begin with NDSU crop budgets for field peas, lentils, and chickpeas (2004-2012), averaging figures 

for the state’s production regions for each crop.

2. Production costs for 2003 were filled using the formula that draws data from price indexes (Col A) 

and calculates values for that year based on the accompanying “Cost Index” data file.

3. Returns to labor & management were averaged for all years (2003-2012), the resulting average 

applied as the 2008 value, then values for preceding and subsequent years were calculated using 

the price indexes.

Pre-planting percentage costs by expense category (Tab 2)

4. For each crop budget, we used the following pre-planting cost percentages:

Cash expenses: 

- 15% of herbicides, 

- 20% of fertilizer

- 24% of crop insurance, reflecting PP indemnities from 1994-2013

- 15% of fuel & lubrication

- 15% of repairs

- 15% of miscellaneous expenses

- 25% of operating interest 

And almost all overhead:

- 25% of returns to labor and management,

- 100% of misc. overhead,

- 100% of machinery depreciation, 

- 100% of machinery investment, 

- and 100% of land charge

Pre-planting cost estimates (Tab 3)

5. Multiply appropriate cells on Tabs 1 and 2 for each crop.

6. Copy and paste values from “Total cost” line on Tab 1 to Tab 3.

7. Calculate pre-planting costs as a percentage of total costs for each crop.

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References:

New and archived North Dakota crop budgets available at:

http://www.ag.ndsu.edu/farmmanagement/crop-budget-archive

2.2.5. ELS Cotton

Budgets for ELS cotton came from the University of California Extension Service. The extension published 

budgets in 2003 and 2012 for the San Joaquin Valley where ELS cotton is primarily grown. These budgets 

are every detailed and include timing as well as each operation. From this type of budget, both the 

production costs and the preplant factors can easily be obtained. Each budget needed to be converted to 

our standardized format as best as possible. In the following graphics, we illustrate the details of how we 

did this.

The large table is the actual budget as obtained from the Extension. The cells in the “Total”, “Preplant 

($)”, and “Preplant(%)” columns have been color coded to understand which of the budget lines were 

summed to get to our standard format. The cells Nov-Mar in blue with purple text are preplant cells. The 

cells in green are the costs that occur at the time of planting. These are excluded from the preplanting 

costs.

The graphic that follows the large table follows the format that we used for the CAR and shows which of 

the lines in the budget were summed into each CAR category. It also details how the preplant percentages 

were calculated for each category.

Production costs (Tab 1)

1. Begin with California budgets for San Joaquin Valley Pima cotton for 2003 and 2012.

2. Production costs for missing years were filled using the formula that draws data from price indexes 

(Col A) and calculates values for that year based on the accompanying “Cost Index” file.

Pre-planting percentage costs by expense category (Tab 2)

3. California published the Pima budgets with breakdowns showing costs at each stage of production. 

Preplanting costs were simply summed and the percentage of total costs calculated.

The California budgets contained very detailed costs. Line items for things such as individual fertilizers, 

herbicides, insecticides, individual machines and field passes were listed. These were aggregated into 

reasonable categories similar to ERS categories as well as possible. For this budget, costs for each operation 

include labor costs as well as the cost of fuel, equipment, chemicals or other operations. Each of these 

costs was further broken down by month of operation. This allows us to accurately identify the exact cost 

of production before planting, planting costs, cost of growing, harvest costs, etc.

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2003 detail

Beginning NOV 02 NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV TOTAL

Ending NOV 03 02 02 03 03 03 03 03 03 03 03 03 03 03 Preplant ($) Preplant (%)

Cultural:

Rip Fields 1X/3 Yrs 11 0 0 0 0 0 0 0 0 0 0 0 0 11.00 11 100%

Primary Discing 2X 11 0 0 0 0 0 0 0 0 0 0 0 0 11.00 11 100%

Weed Control - Apply Herbicide 12 0 0 0 0 0 0 0 0 0 0 0 0 12.00 12 100%

Weed Control - Incorporate Herbicide 5 0 0 0 0 0 0 0 0 0 0 0 0 5.00 5 100%

List Beds 2 0 0 0 0 0 0 0 0 0 0 0 0 2.00 2 100%

Make Ditch 0 0 0 1 0 0 1 0 1 0 0 0 0 2.00 1 33%

Irrigate (Labor includes water run UN32) 0 0 0 51 0 0 0 38 77 39 0 0 0 205.00 51 25%

Fertilizer - Water Run UN32 0 0 0 0 0 0 0 8 0 0 0 0 0 8.00 0 0%

Close Ditch 0 0 0 1 0 0 0 1 0 0 1 0 0 2.00 1 33%

Cultivate - Preplant 0 0 0 0 3 0 0 0 0 0 0 0 0 3.00 3 100%

Plant 0 0 0 0 0 26 0 0 0 0 0 0 0 26.00 0 0%

Uncap Beds 0 0 0 0 0 2 0 0 0 0 0 0 0 2.00 0 0%

Cultivate - 3X 0 0 0 0 0 3 3 3 0 0 0 0 0 9.00 0 0%

Fertilizer - Sidedress UN32 0 0 0 0 0 0 45 0 0 0 0 0 0 45.00 0 0%

Weed Control - Over-The-Top Spray 0 0 0 0 0 0 23 0 0 0 0 0 0 23.00 0 0%

Insect Control - Mites 0 0 0 0 0 0 44 0 0 0 0 0 0 44.00 0 0%

Weed Control - Hand Hoe 0 0 0 0 0 0 0 55 0 0 0 0 0 55.00 0 0%

Weed Control - Post Directed/Layby Spray 0 0 0 0 0 0 0 21 0 0 0 0 0 21.00 0 0%

Insect Control - Lygus 0 0 0 0 0 0 0 17 0 0 0 0 0 17.00 0 0%

Insect Control - Aphids 0 0 0 0 0 0 0 0 24 0 0 0 0 24.00 0 0%

Growth Regulator 0 0 0 0 0 0 0 0 25 13 0 0 0 38.00 0 0%

Defoliate Cotton 2X 0 0 0 0 0 0 0 0 0 0 0 69 0 69.00 0 0%

PCA 1 1 1 1 1 1 1 1 1 1 1 1 1 11.08 5 42%

Pickup Use 1 1 1 1 1 1 1 1 1 1 1 1 0 14.00 6 42%

TOTAL CULTURAL COSTS 43 2 2 54 5 33 118 145 129 54 3 71 1 659.08 107 16%

Harvest:

Harvest 2X 0 0 0 0 0 0 0 0 0 0 0 0 40 40.00 0 0%

Build Module and Haul 2X 0 0 0 0 0 0 0 0 0 0 0 0 20 20.00 0 0%

TOTAL HARVEST COSTS 0 0 0 0 0 0 0 0 0 0 0 0 60 60.00 0 0%

Gin:

Gin (paid by seed credit) 0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 0 0%

Gin Compression Charge 0 0 0 0 0 0 0 0 0 0 0 0 16 16.00 0 0%

TOTAL GIN COSTS 0 0 0 0 0 0 0 0 0 0 0 0 16 16.00 0 0%

Assessment:

Assessments 0 0 0 0 0 0 0 0 0 0 0 0 23 23.00 0 0%

TOTAL ASSESSMENT COSTS 0 0 0 0 0 0 0 0 0 0 0 0 23 23.00 0 0%

Postharvest:

Chop Stalks 0 0 0 0 0 0 0 0 0 0 0 0 4 4.00 0 0%

Disc Residue - 2X 0 0 0 0 0 0 0 0 0 0 0 0 11 11.00 0 0%

TOTAL POSTHARVEST COSTS 0 0 0 0 0 0 0 0 0 0 0 0 15 15.00 0 0%

Interest on operating capital 0 0 0 1 1 1 2 2 3 3 3 4 5 25.48 2 8%

TOTAL OPERATING COSTS/ACRE 43 2 2 55 6 34 119 147 132 57 6 75 120 798.55 109 14%

Cash Overhead:

Land Rent Cotton 0 0 0 0 0 0 0 0 0 0 0 0 150 150.00 0 0%

Office Expense 2 2 2 2 2 2 2 2 2 2 2 2 2 30.00 12 38%

Liability Insurance 0 0 1 0 0 0 0 0 0 0 0 0 0 1.00 1 100%

Property Taxes 0 0 3 0 0 0 0 0 3 0 0 0 0 5.00 3 50%

Property Insurance 0 0 0 0 0 4 0 0 0 0 0 0 0 4.00 0 0%

Investment Repairs 0 0 0 0 0 0 0 0 0 0 0 0 0 3.00 1 42%

TOTAL CASH OVERHEAD COSTS 3 3 6 3 3 7 3 3 5 3 3 3 152 193.00 16 8%

TOTAL CASH COSTS/ACRE 46 5 8 58 8 40 122 150 137 60 9 78 272 991.55 125 13%

SAN JOAQUIN VALLEY - 03

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 Item 2003

Cash expenses:

 Cultivation 70.08

 Planting 26

 Irrigation 205

 Fertilizer 53

 Chemicals 291

 Pickup Truck 14

 Harvest costs 60.00

 Ginning 16.00

 Assessments 23.00

 Postharvest operations 15.00

 Crop Insurance 8.13

 Interest on operating capital 25.48

 Total, operating costs 806.68

Allocated overhead:

 Land rent 150.00

 Office expenses 30.00

 Liability Insurance 1.00

 Property Taxes 5.00

 Property Insurance 4.00

 Investment Repairs 3.00

 Total, allocated overhead 193.00

 Total costs listed 999.68

SJV 03 12 PP Cost PP%

Cultivation 70.08 49.95 71%

Planting 26 0 0%

Irrigation 205 51 25%

Fertilizer 53 0 0%

Chemicals 291 0 0%

Pickup Truck 14 6 42%

Harvest costs 60.00 0.00 0%

Ginning 16.00 0.00 0%

Assessments 23.00 0.00 0%

Postharvest operations 15.00 0.00 0%

Crop Insurance** 100%

Interest on operating ca 25.48 2.05 8%

Total cultural costs 798.55 108.83 14%

Cash overhead

Land rent 150.00 0.00 100

Office expenses 30.00 11.54 38%

Liability Insurance 1.00 1.00 100%

Property Taxes 5.00 2.50 50%

Property Insurance 4.00 0.00 0%

Investment Repairs 3.00 1.25 42%

Total Other costs 193.00 16.29 8%

Total costs 991.55 125.12 13%

** Agralytica calculated

Preplanting costs

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2012 detail

Beginning 11-11 NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV TOTAL

Ending 11-12 11 11 12 12 12 12 12 12 12 12 12 12 12 Preplant ($) Preplant (%)

Cultural:

Rip fields 1X/3 yrs 12 12.00 12 100%

Disc 2X 19 19.00 19 100%

Apply herbicide (Roundup) 13 13.00 13 100%

Spray Triflurex 19 19.00 19 100%

Incorporate Triflurex 9 9.00 9 100%

List beds 4 4.00 4 100%

Make ditch 1 1 1 4.00 1 25%

Pre-irrigate 95 78 62 62 297.00 95 32%

Close ditch 1 1 1 4.00 1 25%

Cultivate -Preplant 5 5.00 5 100%

Plant & Orthene treatment 64 64.00 0 0%

Uncap beds 4 4.00 0 0%

Cultivate 5 5 5 15.00 0 0%

Fertilize -Sidedress (UN32) 136 136.00 0 0%

Weed Control -Over -the-top (Staple) 38 38.00 0 0%

Weed control -Direct/layby (Shark) 19 19.00 0 0%

Insect control -Lygus (Carbine & Zephyr) 87 87.00 0 0%

Insect control -Lygus (Leverage) 29 29.00 0 0%

Apply growth regulator & KNO3 11 11.00 0 0%

Fertilize -Water run (UN32) 25 25.00 0 0%

Insect Control -Aphid whitefly (Assail) 29 29.00 0 0%

Defoliate cotton -2X 95 95.00 0 0%

PCA 1 1 1 1 1 1 1 1 1 1 1 1 1 12.00 5 42%

Chop stalks (Post-harvest) 6 6.00 0 0%

Disc residue -2X (post-harvest) 22 22.00 0 0%

Pickup truck use 1 1 1 1 1 1 1 1 1 1 1 1 1 13.00 5 38%

TOTAL CULTURAL COSTS 32 2 2 20 131 75 182 192 130 92 3 97 30 989.000 187 19%

Harvest:

Harvest -2X 84 84 0 0%

Boll buggy -2X 6 6 0 0%

Build module (tractor #1) -2X 10 10 0 0%

Build module (machines #1 (2X) and #2) 16 16 0 0%

Build module (tractor #2) 7 7 0 0%

TOTAL HARVEST COSTS 122 122 0 0%

Assessment:

Assessments 24 24 0 0%

TOTAL ASSESSMENT COSTS 0 0 0 0 0 0 0 0 0 0 0 0 24 24 0 0%

Interest on operating capital at 5.75% 0 0 0 0 1 1 2 3 4 4 4 5 5 30 1 3%

TOTAL OPERATING COSTS/ACRE 32 2 2 20 131 77 184 195 134 96 7 101 182 1,165 187 16%

CASH OVERHEAD

Liability insurance 1 1 0 0%

Office expense 4 4 4 4 4 4 4 4 4 4 4 4 4 50 20 40%

Property taxes 44 44 89 44 49%

Property insurance 3 3 3 100%

Investment repairs 0 0 0 0 0 0 0 0 0 0 0 0 0 3 0 0%

TOTAL CASH OVERHEAD COSTS 4 48 7 4 4 48 5 4 4 4 4 4 4 145 67 46%

TOTAL CASH COSTS/ACRE 36 50 9 24 135 125 189 200 138 100 11 106 186 1,310 254 19%

SAN JOAQUIN VALLEY - 12

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For extra long staple cotton, the costs that we allocate 100% to pre-planting include: land rent, office 

expenses, liability insurance, taxes, property insurance, and investment repairs. (We included $80 of the 

UCCE property taxes as part of the land rental rate.) For crop insurance, we allocated 82%, reflecting the 

longer term share of total indemnities that prevented planting claims represent. We consider these costs 

to be unavoidable (fixed), regardless of where they appear on a budget.

Farmers also incur other pre-planting costs during production: land prep, including preparing beds, preplanting fertilizer, and often, other expenses such as pre-planting herbicides and/or the use of a cover 

crop. Preplanting costs for these categories were summed for each month before planting and a percentage 

was calculated from the total category cost.

Finally, cotton production yields two co-products: cottonseed and the lint or cotton fibers. Lint accounts 

for about 81-85% of the returns while the seed account for the remaining 15-19%. Costs of production were 

allocated to each co-product, so 85% of the preplanting costs were allocated to the lint for 2003-2007 and 

81% for 2008-2012. 

SJV 2012 2012 PP Cost PP%

Cultivation 108.00 83.00 77%

Planting 64 0 0%

Irrigation 297 95 32%

Fertilizer 161 0 0%

Chemicals 320 5 2%

Pickup Truck 13 5 38%

Harvest costs 122.00 0.00 0%

Ginning 0%

Assessments 24.00 0.00 0%

Postharvest operations 28.00 0.00 0%

Crop Insurance** 100%

Interest on operating capital 30.00 1.00 3%

Total cultural costs 1167.00 189.00 16%

Cash overhead

Land rent*

Office expenses 50.00 20.00 40%

Liability Insurance 1.00 0.00 0%

Property Taxes 89.00 44.00 49%

Property Insurance 3.00 3.00 100%

Investment Repairs 3.00 0.00 0%

Total Other costs 146.00 67.00 46%

Total costs 1313.00 256.00 19%

* Land rent for 2012 calculated using the price index

** Agralytica calculated

Preplanting costs

 Item 2012

Cash expenses:

 Cultivation 108.00

 Planting 64.00

 Irrigation 297.00

 Fertilizer 161.00

 Chemicals 320.00

 Pickup Truck 13.00

 Harvest costs 122.00

 Ginning 27.23

 Assessments 24.00

 Postharvest operations 28.00

 Crop Insurance 23.23

 Interest on operating capital 30.00

 Total, operating costs 1217.46

Allocated overhead:

 Land rent 275.51

 Office expenses 50.00

 Liability Insurance 1.00

 Taxes 8.90

 Property Insurance 3.00

 Investment Repairs 3.00

 Total, allocated overhead 341.41

 Total costs listed 1558.87

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Pre-planting cost estimates (Tab 3)

4. Multiply appropriate cells on Tabs 1 and 2.

5. Copy and paste values from “Total cost” line on Tab 1 to Tab 3.

6. Calculate pre-planting costs as a percentage of total costs.

7. Calculate lint production costs as a percent (85%) of total preplanting costs.

References:

http://coststudies.ucdavis.edu/

http://www.supima.com/whats-supima/history/

http://www.calcot.com/ourcotton.asp?post=pima&

http://www.agmrc.org/commodities__products/fiber/cotton-profile/

http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1047

2.2.6. Flax

The primary source of production cost information comes from the North Dakota State University Extension, 

which publishes budgets annually for flaxseed and other crops, for a number of regions within the state. 

(http://www.ag.ndsu.edu/farmmanagement/crop-budget-archive). Other states do not publish flax crop 

budgets. 

Production costs (Tab 1)

1. Begin with NDSU crop budgets for flaxseed (2004-2012), averaging figures for the state’s NW, NC, 

and SW regions. Flax production is concentrated in North Dakota’s Northwest (NW), North-central 

(NC), and Southwest (SW) regions. We used actual crop budget data for 2004-2012, and used price 

indices to come up with budget figures for 2003.

2.

3. Production costs for 2003 were filled using the formula that draws data from price indexes (Col A) 

and calculates values for that year based on the accompanying “Cost Index” data file.

4. The only item missing from the North Dakota budget is the “Returns to labor & management” 

component. To calculate this figure we took the figures for all 10 years (2003-2012), averaged 

them, and applied the resulting figure to 2008. We then used the NASS “LABOR, WAGE RATES –

INDEX FOR PRICE PAID” index to calculate a figure for missing years. 

The reason for this procedure is to be able to include in the budget a “typical” return to 

management labor, rather than the relatively random result that may obtain in any given year (in 

this case, $57.42). The inflation adjusted actual figure for 2012 turned out to be $12.18. 

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5. Production costs for 2003 were filled using the formula that draws data from price indexes (Col A) 

and calculates values for that year based on the accompanying “Cost Index” data file.

6. The only item missing from the North Dakota budget is the “Returns to labor & management” 

component. To calculate this figure we took the figures for all 10 years (2003-2012), averaged 

them, and applied the resulting figure to 2008. We then used the NASS “LABOR, WAGE RATES –

INDEX FOR PRICE PAID” index to calculate a figure for missing years. 

The reason for this procedure is to be able to include in the budget a “typical” return to 

management labor, rather than the relatively random result that may obtain in any given year (in

this case, $57.42). The inflation adjusted actual figure for 2012 turned out to be $12.18. 

Pre-planting percentage costs by expense category (Tab 2)

1. For the budget, we used the following pre-planting cost percentages:

Cash expenses:

25% of herbicides, 

39% of crop insurance, reflecting PP % of indemnities for 1994-2013

10% of fuel & lubrication and repairs

25% of operating interest 

FLAX (North Dakota, 2012) SW NC NW AVERAGE Item 2012

 Market Yield Cash expenses:

 Market Price Seed 11.40

Market Revenue Herbicides 24.50

 Fertilizer 29.70

DIRECT COSTS Crop Insurance 10.00

 -Seed 10.80 12.60 10.80 11.40 Fuel & Lubrication 14.33

 -Herbicides 22.50 25.50 25.50 24.50 Repairs 14.73

 -Fungicides 0.00 0.00 0.00 0.00 Miscellaneous 1.50

 -Insecticides 0.00 0.00 0.00 0.00 Operating Interest 2.44

 -Fertilizer 24.02 34.74 30.35 29.70 Total, operating costs 108.60

 -Crop Insurance 9.90 10.50 9.60 10.00

 -Fuel & Lubrication 14.49 15.47 13.03 14.33 Allocated overhead:

 -Repairs 14.81 15.31 14.07 14.73 Returns to labor & management 12.18

 -Drying 0.00 0.00 0.00 0.00 Misc. Overhead 6.10

 -Miscellaneous 1.50 1.50 1.50 1.50 Machinery Depreciation 16.48

 -Operating Interest 2.25 2.66 2.41 2.44 Machinery Investment 9.74

SUM OF LISTED DIRECT COSTS Land Charge 38.17

 Total, allocated overhead 82.67

INDIRECT (FIXED) COSTS

 -Misc. Overhead 6.20 6.21 5.88 6.10 Total costs listed 191.27

 -Machinery Depreciation 17.05 16.80 15.59 16.48

 -Machinery Investment 10.15 10.04 9.04 9.74

 -Land Charge 34.70 46.20 33.60 38.17

SUM OF LISTED INDIRECT COSTS

SUM OF ALL LISTED COSTS

RETURN TO LABOR & MGMT 46.17 73.37 52.73 57.42

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And almost all overhead:

20% of operator labor

100% misc. overhead, 

100% of machinery depreciation, 

100% of machinery investment, 

and 100% of land charge

Pre-planting cost estimates (Tab 3)

1. Multiply appropriate cells on Tabs 1 and 2.

2. Copy and paste values from “Total cost” line on Tab 1 to Tab 3.

3. Calculate pre-planting costs as a percentage of total costs.

References:

NDSU crop budgets (2004-2013) 

http://www.ag.ndsu.edu/farmmanagement/crop-budget-archive

2.2.7. Green Peas

Green pea budgets came from several sources. Some of the cost of production data came from North Dakota 

State University Extensions and some came from the FINBIN database from the University of Minnesota.

NDSU budgets for the years 2004-2012 came from North Dakota State University Extension Service. Budgets 

are separated into one of nine regions in the state. Each budget follows the ERS format very closely so no 

changes were made to the format. Budgets from the dry pea growing regions were simply averaged together 

to get a state average by year. This average was used as the values for the cost of production. The 

production costs for 2003 were imputed using the price index.

FINBIN budget data

1. The FINBIN data covered all years from 2003 -2012. It is a composite of 50-100 farms reporting 

costs per year. We took the composite data from Minnesota and Wisconsin as a basis for average 

production costs in the region. The FINBIN data is in a similar format to the standard ERS format 

we adopted, as such we used it as it was presented Click “Crop”

2. Select “Peas” from the dropdown box

3. Click on the text in blue and select Minnesota and Wisconsin

4. Click on the year and select the appropriate years

5. Click on “Crop Tenure Type:” and select Cash Rent

6. Click Here to Generate Report

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Preplant percentages were obtained using production and timing information provided by Andrew Swenson, 

Extension Farm and Farm Resource Management Specialist at the North Dakota State University Extension 

office.

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FINBIN data

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Direct Expenses 

Seed 0.09 - - - - 0 - - - 8.99

Fertilizer 15.1 15.11 14.98 15.87 14.32 26.72 40.85 26.17 32.22 39.82

Crop chemicals 13.1 14.91 14.92 12.6 15.3 15.86 17.5 17.76 18.01 18.57

Crop insurance 5.34 5.94 4.42 5.26 5.31 6.69 5.49 4.92 6.99 9.59

Fuel & oil 5.42 6.66 7.81 8.49 9.89 13.54 8.68 12.29 13.78 15.46

Repairs 10.51 10.53 11.1 10.08 13.86 15.02 20.94 17.32 18.85 21.44

Custom hire 1.85 1.99 1.96 1.65 3.36 4.99 4.01 5.47 5.14 7.9

Hired labor 0.02 0.07 - - 0.44 2.98 2.65 3.23 1.75 1.35

Land rent 110.63 107.61 113.28 120.5 128.62 151.02 178.76 172.35 195.26 213.57

Machinery leases 0.46 0.23 0.04 0.33 0.3 0.06 0.39 1.54 0.61 1.76

Utilities 0.02 - 0.04 - 0.03 0.49 0.93 0.55 0.65 0.25

Marketing 1.08 0.34 0.08 0.32 0.06 0.28 0.47 0.37 0.06 1.84

Operating interest 3.27 3.21 3.12 4.58 4.08 4.42 4.79 4.58 2.61 4.62

Miscellaneous 0.51 0.39 0.78 1.05 1.38 1.95 1.05 4.72 1.23 2.69

Total direct expenses per acre 140.4 126.48 138.71 136.47 151.92 188.03 249.71 203.26 215.66 274.1

Return over direct exp per acre 201.2 168.12 132.08 144.19 272.02 455.17 361.73 238.91 277.73 280.31

Overhead Expenses 

Custom hire 0.64 0.92 0.68 0.72 0.7 0.28 - 0.24 - 0.31

Hired labor 3.95 3.63 3.64 3.47 4.62 4.48 14.47 5.29 6.5 6.19

Machinery leases 1.29 3.26 1.55 1.17 1.35 0.48 0.92 0.65 0.5 1.37

Building leases - - 0.07 0.12 0.26 0.46 0.7 0.3 0.98 0.86

RE & pers. property taxes 2.75 4.49 4.01 5.7 6.02 6.74 4.47 9.14 9.82 7.96

Farm insurance 2.64 3.67 2.61 2.67 2.32 2.77 3.7 2.78 3.35 4.44

Utilities 1.74 1.48 1.62 1.49 1.47 1.71 1.82 2.15 2.12 2.15

Dues & professional fees 0.61 0.51 1.13 1.05 0.74 0.97 1.46 1.24 1.44 1.25

Interest 11.95 14.8 13.15 15.22 18.54 15.9 11.4 19.53 17.57 16.62

Mach & bldg depreciation 11.29 10.51 10.93 10.45 12.39 14.72 16.99 17.73 16.72 22.9

Miscellaneous 2.7 1.9 2.05 1.75 3.15 3.05 6.44 4.14 4.59 4.29

Total overhead expenses per acre 39.57 45.18 41.45 43.81 51.55 51.57 62.37 63.2 63.57 68.34

Total dir & ovhd expenses per acre 179.97 171.66 180.16 180.28 203.47 239.6 312.07 266.47 279.23 342.44

Net return per acre 161.64 122.94 90.63 100.38 220.47 403.6 299.36 175.71 214.15 211.98

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Agralytica budget

Production costs (Tab 1)

1. Begin with FINBIN processing pea budget (2003-2012) and NDSU field pea crop budgets (2004-2012); 

for NDSU we averaged production costs across the seven state regions for which there were 

budgets.

Pre-planting percentage costs by expense category (Tab 2)

2. For these budget, we used the following pre-planting cost percentages:

Direct/cash expenses:

- 0% for seed and marketing

- 25% for herbicides, fertilizer, and other chemicals

- 2% for crop insurance

- 25% for fuel & lubrication

- 25 % for repairs

- 25% for custom operations

- 25% for miscellaneous operating expenses

- 25% for operating interest

Item

Direct Expenses 

 Seed

 Fertilizer

 Crop chemicals

 Crop insurance

 Fuel & oil

 Repairs

 Custom hire

 Hired labor

 Land rent

 Machinery leases

 Utilities

 Marketing

 Operating interest

 Miscellaneous

Total direct expenses

Overhead Expenses 

 Custom hire

 Hired labor

 Machinery leases

 Building leases

 RE & pers. property taxes

 Farm insurance

 Utilities

 Dues & professional fees

 Interest

 Mach & bldg depreciation

 Miscellaneous

Total overhead expenses

Total expenses

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And all overhead:

- 100% of misc. overhead, 

- 100% of machinery depreciation, 

- 100% of machinery investment, 

- and 100% of land charge

Pre-planting cost estimates (Tab 3)

3. Multiply appropriate cells on Tabs 1 and 2.

4. Copy and values from “Total cost” line on Tab 1 to Tab 3.

5. Calculate pre-planting costs as a percentage of total costs.

Pre-planting costs were determined through research, extension agronomist interviews, and a review of 

actual pre-planting percentages for major crops.

References:

FINBIN budget

http://www.finbin.umn.edu/CropEnterpriseAnalysis/Default.aspx?new=1

North Dakota State University Extension budget

http://www.ag.ndsu.edu/farmmanagement/crop-budget-archive

“Pea Production in the High Plains”, South Dakota University Extension, University of Wyoming, University 

of Nebraska-Lincoln Extension

http://ianrpubs.unl.edu/live/ec187/build/ec187.pdf

2.2.8. Millet

Millet production cost data came from the University of Colorado. The millet budgets from Colorado fit the 

ERS format exactly. Data was available for 2010 – 2012. Previous years were estimated using the price 

index.

The percentage of each cost that occurred prior to planting was estimated from an interview with Jessica 

Johnson, an Extension Economics Specialist with the University of Nebraska-Lincoln Extension.

Production costs (Tab 1)

1. Begin with CSU budgets

2. Production costs for missing years filled using the formula that draws data from price indexes (Col 

A) and calculates values for that year based on the accompanying “Cost Index” file.

Pre-planting percentage costs by expense category (Tab 2)

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3. For these budgets, we used the following pre-planting cost percentages:

- Seed: 0%

- Herbicide: 33%

- Custom operations: 25%

- Crop insurance: 5%

- Fuel: 25%

- Repairs and maintenance: 10%

- Labor: 25%

- Interest on operating capital: 25%

- Machinery: 100%

- Land: 100%

- Real estate taxes: 100%

- Farm overhead: 100%

Pre-planting cost estimates (Tab 3)

4. Multiply appropriate cells on Tabs 1 and 2.

5. Copy values for “Total cost” from Tab 1 to Tab 3

6. Calculate pre-planting costs as a percentage of total costs

References:

Colorado State University Extension

http://www.coopext.colostate.edu/ABM/cropbudgets.htm

University of Nebraska-Lincoln Extension

http://www.ianrpubs.unl.edu/pages/publicationD.jsp?publicationId=597

2.2.9. Mustard

Mustard budgets for the years 2004-2012 came from North Dakota State University Extension Service. 

Budgets are separated into one of nine regions in the state. Each budget follows the ERS format very closely 

so no changes were made to the format. Budgets from the mustard growing regions were simply averaged 

together to get a state average by year. This average was used as the values for the cost of production. 

The production costs for 2003 were imputed using the price index.

Preplant percentages were obtained using production and timing information provided by Andrew Swenson, 

Extension Farm and Farm Resource Management Specialist at the North Dakota State University Extension 

office.

Production costs (Tab 1)

1. North Dakota represents a substantial share of national production and is geographically proximate 

to other key producing areas.

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2. We began with NDSU crop budgets for mustard (2004-2012), averaging figures for all 7 regions with 

available budgets.

3. Production costs for 2003 were filled using the formula that draws data from price indexes (Col A) 

and calculates values for that year based on the accompanying “Cost Index” data file.

Pre-planting percentage costs by expense category (Tab 2)

4. For the budget, we used the following pre-planting cost percentages:

Cash expenses:

- 10% restocking fees for unused seed, 

- 30% of herbicides and fertilizer, 

- 11% of crop insurance,

- 20% (1/5) of fuel & lubrication, repairs, and miscellaneous costs

- 50% of operating interest 

And almost all overhead:

- 20% of labor & management

- 100% misc. overhead, 

- 100% of machinery investment and depreciation,

- and 100% of land charge

Pre-planting cost estimates (Tab 3)

For each crop type:

5. Multiply appropriate cells on Tabs 1 and 2.

6. Copy and paste values from “Total cost” line on Tab 1 to Tab 3.

7. Calculate pre-planting costs as a percentage of total costs.

References:

NDSU crop budgets (2004-2013) 

http://www.ag.ndsu.edu/farmmanagement/crop-budget-archive

“Alternate Field Crops Manual: Mustard”, University of Wisconsin Cooperative Extension

http://www.hort.purdue.edu/newcrop/afcm/mustard.html

“Mustard Production in Montana”, Montana State University Extension

http://ipm.montana.edu/MPIN/Cropfiles/Mustard.html

“Yellow Mustard Production Tips”, Mountain States Oilseeds

http://msoilseeds.com/mustardProduction.html

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“Mustard Greens and Condiment Mustard” Oregon State University

http://nwrec.hort.oregonstate.edu/mustard.html

2.2.10. Onions

Onion crop budget availability varies by state, but apart from Texas, which produces annual onion budgets, 

no other large producing states publish annual onion crop budgets. Episodic budgets are available from New 

Mexico (2011), Idaho/Oregon (2011), Colorado (2008, 2010), Georgia (2001, 2008), Nevada (2008), and 

Washington (2004). California has multiple onion budgets, but for different varieties in different years.

Production costs (Tab 1)

1. Begin with Texas A&M budgets for fresh market onions and University of Idaho budgets for storage 

onions.

Mapping the production budget: Fresh market onions (“Southern onions”)

We built the fresh market onion budget (“Southern onions”) based on Texas A&M’s annual hybrid yellow 

onion budget (available at http://agecoext.tamu.edu/resources/crop-livestock-budgets/bycommodity/fruits-and-vegetables/archives.html). Mapping the budget to the CAR was as shown in the 

following graphic.

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The only item missing from the Texas budget is crop insurance. We were given the figure $450 for 2012 by 

the crop extension specialist there. We then used NASS’s AG Services Price Index to work backward and

calculate the inflation adjusted figure for 2004, which (coincidentally) turned out to be $350.

Mapping the production budget: Storage onions (“Northern onions”)

We built the storage onion budget (“Northern onions”) based on the University of Idaho’s 2011 Cost and 

Returns Estimate for Southwestern Idaho and Eastern Oregon: Treasure Valley. It is available at: 

http://web.cals.uidaho.edu/idahoagbiz/files/2012/11/EBB2On11.pdf.

Mapping the budget to the CAR was as shown in the following graphic.

 Item 2004

Cash expenses:

 Fertilizer 152.16

 Fungicide 133.93

 Herbicides 40.48

 Insecticide/miticide 33.94

 Irrigation 45.44

 Seed/plants 150.00

 Custom harvest 1825.00

 Other labor 67.61

 Fuel 12.12

 Repair & maintenance 15.09

 Crop insurance

 Interest on operating capital 77.70

 Total, operating costs 2553.47

Allocated overhead:

 Capital recovery of machinery & equip 48.63

 Opportunity cost of land (rental rate) 100.00

 Total, allocated overhead 148.63

 Total costs listed 2,702.10

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2. Production costs for missing years were filled using the formula that draws data from price indexes 

(Col A) and calculates values for that year based on the accompanying “Cost Index” file.

Pre-planting percentage costs by expense category (Tab 2)

 Item 2011

Cash expenses:

 Fertilizer 283.05

 Storage 316.25

 Herbicides / pesticides 631.87

 Irrigation 48.60

 Seed/plants 407.55

 Custom labor - pre-planting 93.80

 Custom labor - post-planting 284.50

 Labor 232.78

 Fuel & lubrication 154.00

 Marketing 53.50

 Repair & maintenance 69.77

 Crop insurance 30.00

 Interest on operating capital 73.18

 Total, operating costs 2678.85

Allocated overhead:

 General overhead 265.00

 Taxes and insurance 6.02

 Equipment 218.04

 Land 450.00

 Total, allocated overhead 939.06

 Total costs listed 3617.91

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3. For these budgets, we used the following pre-planting cost percentages:

Item Fresh market onions Storage onions

Seed 0.0% 0.0%

Herbicide 0.0% 0.0%

Fertilizer 10.0% 20.0%

Storage -- 20.0%

Irrigation -- 20.0%

Custom labor, pre-planting -- 100.0%

Custom labor, post planting -- 0.0%

Other labor 10.0% 25.0%

Fuel & lubrication 50.0% 66.7%

Marketing -- 0.0%

Repairs & maintenance 50.0% 66.7%

Crop insurance 22.0% 22.0%

Interest on operating capital 25.0% 25.0%

General overhead -- 100.0%

Taxes and insurance -- 100.0%

Machinery and equipment 100.0% 100.0%

Land 100.0% 100.0%

Production costs vary by so much from one area to another, and pre-planting costs are no different. For 

onions, the costs that we allocate 100% to pre-planting include interest on operating capital, machinery & 

equipment, rent, and general overhead. We consider these costs to be unavoidable (fixed), regardless of 

where they appear on a budget.

Farmers also incur other pre-planting costs with onion production: land prep, including preparing beds, preplanting fertilizer, and often, other expenses such as pre-planting herbicides and/or the use of a cover 

crop. 

Pre-planting cost estimates (Tab 3)

4. Multiply appropriate cells on Tabs 1 and 2.

5. Copy and paste values from “Total cost” line on Tab 1 to Tab 3.

6. Calculate pre-planting costs as a percentage of total costs.

References:

Budgets used: 

Texas A&M budget archives (1998-2012)

http://agecoext.tamu.edu/resources/crop-livestock-budgets/by-commodity/fruits-andvegetables/archives.html

University of Idaho (Southwestern Idaho / Eastern Oregon): 

http://web.cals.uidaho.edu/idahoagbiz/files/2012/11/EBB2On11.pdf

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Additional budgets referenced:

Georgia: http://www.caes.uga.edu/publications/pubDetail.cfm?pk_id=7749#Production

Colorado: http://www.coopext.colostate.edu/ABM/cropbudgets.htm

http://www.coopext.colostate.edu/ABM/westernonions10.pdf

California: http://coststudies.ucdavis.edu/files/OnionsIR2011.pdf

Washington: http://www.farm-mgmt.wsu.edu/PDF-docs/irrigated/eb1979e_onions.pdf

2.2.11. Popcorn

The most detailed source of popcorn production cost information is a 2008 budget published by Ohio State 

University (http://aede.osu.edu/sites/aede/files/!import/popcorn2008.pdf). We used this as the key 

budget in our analysis.

Production costs (Tab 1)

1. Begin with Ohio State University crop budget for popcorn (2008). Expense categories map to the 

budget as follows:

2. Production costs for missing years filled using the formula that draws data from price indexes (Col 

A) and calculates values for that year based on the accompanying “Cost Index” file.

Pre-planting percentage costs by expense category (Tab 2)

3. For these budgets, we used the following pre-planting cost percentages:

- Fertilizer: 31%, same as for corn for grain

 Item 2008

Cash expenses:

 Seed 26.00

 Fertilizer 144.74

 Chemicals 52.81

 Fuel, lube, and repairs 51.10

 Hired labor 48.60

 Miscellaneous 9.00

 Crop insurance 15.50

 Interest on operating capital 15.71

 Total, operating costs 363.46

Allocated overhead:

 Management expenses 37.56

 Capital recovery of machinery & equip 65.07

 Opportunity cost of land (rental rate) 123.50

 Total, allocated overhead 226.13

 Total costs listed 589.59

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- Chemicals: 25%

- Fuel, lubrication, and repairs: 25%

- Hired labor: 30%

- Crop insurance: 7%, the PP share of total liabilities

- Interest on operating capital: 25%

And most overhead

- Management expenses: 30%

- Capital machinery costs: 100%

- Land: 100%

Several of these categories are rounded percentages drawn from the feed corn prevented planting cost 

percentages provided by ERS (chemicals, hired labor, management expenses).

Pre-planting cost estimates (Tab 3)

4. Multiply appropriate cells on Tabs 1 and 2.

5. Copy values for “Total cost” from Tab 1 to Tab 3

6. Calculate pre-planting costs as a percentage of total costs

References

Budgets: 

Ohio State University Extension (2008)

http://aede.osu.edu/sites/aede/files/!import/popcorn2008.pdf

University of Missouri Extension (2013)

http://extension.missouri.edu/seregion/Crop_Budgets_PDF.htm

Iowa State University Extension (2010)

http://www.extension.iastate.edu/publications/bfc16.pdf

Other references:

Popcorn Production and Marketing, Purdue

https://www.extension.purdue.edu/extmedia/NCH/NCH-5.html

Agricultural Marketing Resource Center

http://www.agmrc.org/commodities__products/grains__oilseeds/corn_grain/popcorn-profile/

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2.2.12.Northern Potatoes

Production costs (Tab 1)

Begin with University of Idaho budgets for 2005-2012, available at 

http://web.cals.uidaho.edu/idahoagbiz/enterprise-budgets/.

Map budget entries to consolidated budget CAR format:

1. Calculate average crop insurance costs using RMA data (premium-subsidy)/acres) for each year. In 

the case above, farmer premiums were $5,270,503 ($17,703,812 in total premiums less the subsidy 

of $12,432,309). These farmer premiums divided by 303,913 insured acres yield a crop insurance 

cost per acre, to the farmer, of $17.34). (This was then broken out of the “other category,” which 

also included miscellaneous items, primarily marketing assessments).

2. Production costs for missing years (2003, 2004) are filled in using the formula that draws data from 

price indexes (Col A) and calculates values for that year based on the accompanying “Cost Index” 

file.

Pre-planting estimates by expense category (Tab 2)

3. For these budgets, we used the following pre-planting cost percentages:

- Seed: 100% - typically not returnable for potatoes, never returnable if treated, does not 

keep

- Chemicals: 15% (assuming no pre-planting fungicide)

- Custom operations: 10%

- Crop insurance: 12%

- Fuel: 25%

 Item 2012

Cash expenses:

 Seed 301.00

 Fertilizer 524.00

 Chemicals 234.00

 Custom operations 212.00

 Machinery: Fuel, oil, lube, repairs 161.00

 Transload 58.00

 Irrigation 77.00

 Hired labor 142.00

 Miscellaneous 106.66

 Crop insurance 17.34

 Interest on operating capital 53.00

 Total, operating costs 1,886.00

Allocated overhead:

 Opportunity cost of unpaid labor 135.00

 Capital recovery of machinery & equip 233.00

 Opportunity cost of land (rental rate) 475.00

 General farm overhead 46.00

 Total, allocated overhead 889.00

 Total costs listed 2,775.00

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- Repairs and maintenance: 25%

- Hired labor: 10%

- Irrigation: 10% (however, purchased water is typically a sunk cost, for those not being 

supplied by municipal authorities)

- Interest on operating capital: 25%

- Unpaid labor: 15%

- Machinery: 100%

- Land: 100%

- General overhead: 100%

Pre-planting cost estimates (Tab 3)

4. Multiply appropriate cells on Tabs 1 and 2.

5. Copy values for “Total cost” from Tab 1 to Tab 3

6. Calculate pre-planting costs as a percentage of total costs

2.2.13. Southern Potatoes

Production costs (Tab 1)

1. Begin with University of Florida IFAS potato budgets for the Hastings area (2007/08 and 2008/09). 

Map budget entries to consolidated budget CAR format:

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2. Production costs for missing years (2003-2007 and 2010-2012) are filled in using the formula that 

draws data from price indexes (Col A) and calculates values for that year based on the 

accompanying “Cost Index” file.

Pre-planting estimates by expense category (Tab 2)

3. For these budgets, we used the following pre-planting cost percentages:

- Seed: 100% - typically not returnable for potatoes, never returnable if treated, does not 

keep

- Chemicals: 22% (to reflect the actual ratio for 2007/08)

- Custom operations: 10%

- Crop insurance: 12%

- Machinery: Fuel, oil, lube, repairs: 25%

- Hired labor: 10%

- Interest on operating capital: 25%

- Machinery: 100%

- Land: 100%

- Operator labor / management: 30%

 Item 2009

Cash expenses:

 Seed 525.00

 Fertilizer 550.90

 Chemicals 545.95

 Custom operations 19.50

 Machinery: Fuel, oil, lube, repairs 449.82

 Harvest & marketing costs 742.00

 Hired labor 284.15

 Miscellaneous 20.00

 Crop insurance 35.00

 Interest on operating capital 190.87

 Total, operating costs 3,363.19

Allocated overhead:

 Capital recovery of machinery & equip 99.15

 Opportunity cost of land (rental rate) 150.00

 General farm overhead & mgmt 535.89

 Total, allocated overhead 785.04

 Total costs listed 4,148.23

 Total costs listed 2,775.00

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- General overhead and management: 30%

Pre-planting cost estimates (Tab 3)

4. Multiply appropriate cells on Tabs 1 and 2.

5. Copy values for “Total cost” from Tab 1 to Tab 3

6. Calculate pre-planting costs as a percentage of total costs

References

Current / recent budgets: 

University of Idaho – Extension

Crop budgets

http://web.cals.uidaho.edu/idahoagbiz/enterprise-budgets/

University of California Davis

Klamath Basin – Fresh Market potatoes - 2008

http://coststudies.ucdavis.edu/files/potatoesir1_08.pdf

University of Florida – Extension

http://www.fred.ifas.ufl.edu/iatpc/files/HastingsTablePotato09.pdf

Other resources:

Potato production handbook (pp. 19-23)

http://potatoassociation.org/documents/A_ProductionHandbook_Final_000.pdf

United Seed Potato Growers of Idaho

http://www.unitedseedpotato.com/index.shtml

2.2.14. Processing Beans

Budgets for processing beans came from New York and Oregon. Both the New York and Oregon budgets are 

highly detailed. They require some aggregation of the categories to fit into our standardized format. 

The budgets and mapping for each state is shown below. We used the categories and values as shown to 

construct our budget.

The Oregon budget provided the preplanting percentages we used as well as the cost of production data. 

This budget is probably the most complex we dealt with. The “Labor” and “Machinery” categories are taken 

from the columns with the same names. The remaining categories are aggregated from the row labels being 

careful not to count labor or machinery costs twice.

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Oregon Bush Beans, Processed market, Willamette Valley region 2010

The New York budget detail is shown below. This budget is straightforward in mapping with the exception 

of “Herbicides”, “Fungicides”, and “Insecticides”. These were summed into one category called 

“Chemicals”. 

Description Units Labor Machinery Materials Total

Variable cash costs PREVENTED PLANTING CALCULATIONS

Field Preparations & Planting

 Tandem disk harrow 1 x/acre 1.69 4.29 $ 5.99 Cost PP %

 Mold Board plow 1 x/acre 2.13 5.25 $ 7.39 Machinery $ 110.41 $ 34.51 31.3%

 Harrow/roller packer 2 x/acre 3.05 7.67 $ 75.72 Miscellaneous $ 2.00 $ - 0.0%

 Preplant Fertilizer 65 Labor $ 104.21 $ 14.58 14.0%

 Field cultivator 2 x/acre 0.85 1.84 $ 2.69 Seed $ 200.00 $ - 0.0%

 Rotovator 1 x/acre 3.81 10.98 $ 14.79 Fertilizer $ 190.00 $ 65.00 34.2%

 Plant beans 1 x/acre 2.54 6.57 $ 259.10 Chemicals $ 105.00 $ - 0.0%

 seed 200 200 Irrigation $ 78.00 $ - 0.0%

 sidedress Fertilizer 50 50 Crop insurance* $ 10.47 $ 10.47 100.0%

 Culitivating weeds 1 x/acre 0.85 1.84 $ 2.69 Operating interest $ 31.58 $ 7.90 25.0%

 Self propelled boom sprayer 1 x/acre 0.43 0.46 $ 50.90 Total overhead costs $ 831.67 $ 132.46 15.9%

 herbicide 50 50

 Self propelled boom sprayer 1 x/acre 0.43 0.46 $ 55.90 Property Insurance $ 25.00 $ 25.00 100.0%

 fungicide 50 50 Property taxes $ 20.00 $ 20.00 100.0%

 insecticide 5 5 Land Rent $ 200.00 $ 200.00 100.0%

 Irrigation 55 78 $ 133.00 Machinery & equip - deprec, Int & Ins $ 122.68 $ 122.68 100.0%

 Labor 5 x/acre $ 11.00 Pickups, truck & ATV - deprec, Int & Ins $ 14.29 $ 14.29 100.0%

 Electricity 8 Acre/inch $ 3.50 Total Fixed costs $ 381.97 $ 381.97 100.0%

 Maint & repairs 1 x/acre $ 50.00

Harvesting All costs $ 1,213.64 $ 514.43 42.4%

 Bush bean harvester 1 x/acre 30.37 53.81 $ 84.18

 truck 2 x/acre 7.45 $ 7.45 * RMA website: Crop insurance Oregon 2010 was $20,341

Post Harvest producer premiumover 1942 acres ---> $10.47 / acre

 Flail crop residue 1 x/acre 3.05 4.48 $ 7.53

 soil test 1 x/acre 2 $ 2.00

 lime application 0.25 x/acre 75 $ 75.00

Other costs $ 784.33

 Pickup & ATV 1 x/acre 5.31 $ 5.31

 Interest: Operating Capital 6 months 31.58 $ 31.58

Total Varaible costs 104.2 110.41 606.58 $ 821.20

Fixed Cash Costs

 Property Insurance 1 x/acre $ 25.00

 Property taxes 1 x/acre $ 20.00

 Land Rent 1 x/acre $ 200.00

Total Fixed Cash Costs $ 245.00

Fixed Non-Cash costs

 Machinery & equip - deprec, Int & Ins $ 122.68

 Pickups, truck & ATV - deprec, Int & Ins $ 14.29

Total Fixed Non-Cash Costs $ 136.96

Total Fixed Costs $ 381.96

Total costs $ 1,203.17

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New York Snap bean budget 2010

Cost Per Acre ($) Average Cost Per Acre ($) Average

Land Rent 54.09 Land Rent 54.09

Office 10.3 Office 10.30

Utilities 2 Utilities 2.00

Liability 1.88 Liability 1.88

Property Taxes 30.76 Property Taxes 30.76

Property Insurance 3.09 Property Insurance 3.09

Investment Repairs 8.06 Investment Repairs 8.06

Total Overhead Costs 110.18 Total Overhead Costs 110.18

Fixed Costs Fixed Costs 

Tractors 5.45 Tractors 5.45

Implements 40.91 Implements 40.91

Total Fixed Costs 46.36 Total Fixed Costs 46.36

Variable Costs Variable Costs 

Seed 59 Seed 59.00

Fertilizer 96.77 Fertilizer 96.77

Land Preparation 42.3 Land Preparation 42.30

 Plowing 11.52 Planting 11.88

 Disking and Harrowing 15.56 Irrigation 15.36

 Others 7.36 Chemicals 64.80

Planting 11.88 Custom 64.61

Cultivation 0.71 Repair and Maintenance 13.85

Irrigation 15.36 Other Variable Costs 36.59

 Central Pivot 11.79 Business Expenses 0.71

 Irrigation Gun 3.57 Crop Insurance 5.19

Herbicides 42.3 Total Variable Costs 411.06

 Dual, Treflan, Eptam, San 16.71 Total Costs 567.60

 Reflex+Basagran 16.93

 Roundup 6.21 Chemicals

 Others 2.44 Herbicides 42.30

Fungicides 14.81 Fungicides 14.81

 Bravo 3.74 Insecticides 7.69

 Topsin M 8.2

 Other 1.66

Insecticides 7.69

 Warrior 0.92

 Capture 0.82

 Brigade 0.28

 Lambda-Cyhalothrin 0.86

 Acephate 0.61

 Orthene 0.43

Custom 64.61

 Soil Testing 3.34

 Applying Calcium Lime 11.71

 Pest Scouting 3.7

 Pesticide Spraying 8

 Machine Harvesting 37.86

Repair and Maintenance 13.85

 Tractors & Implements 7.11

 Interest Charge 1.79

Other Variable Costs 36.59

 Equipment 0.71

 Misc Field/Shop Tools 0.94

 Labor 8.62

 Gas 0.71

 Diesel 10.31

 Interest on Capital 6.04

 Business Expenses 0.71

Crop Insurance 5.19

Total Variable Costs 411.06 411.06

Total Costs 567.6 567.6

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References:

Crop budgets

Cornell University Extension Service

http://dyson.cornell.edu/outreach/extensionpdf/2011/Cornell-Dyson-eb1110.pdf

Oregon State University Extension

http://arec.oregonstate.edu/oaeb/files/pdf/AEB0004.pdf

University of California Cooperative Extension

http://coststudies.ucdavis.edu/files/beanslglimavn10.pdf

http://coststudies.ucdavis.edu/files/beanslglimavn04.pdf

Other references

Examining the Costs of Producing Processing Snap Beans and Green Peas in New York State

http://dyson.cornell.edu/outreach/extensionpdf/.../Cornell-Dyson-eb1110.pdf

Commercial Lima Bean Production in Wisconsin, University of Wisconsin

http://www.soils.wisc.edu/extension/wcmc/2005/ppt/Bussan.pdf

Lima Beans, Oregon State University

http://nwrec.hort.oregonstate.edu/lima.html

Commercial Snap Bean production in Georgia, University of Georgia College of Agricultural & Environmental 

Sciences

http://www.caes.uga.edu/publications/pubDetail.cfm?pk_id=7881

Snap Bean Production, Pennsylvania State University

http://extension.psu.edu/business/ag-alternatives/horticulture/vegetables/snap-bean-production

2.2.15. Processing Sweet Corn

Few states publish budgets specifically for sweet corn for processing. One of the most recent budgets in a 

key producing region is a 2010 budget from Oregon State University Extension for the Willamette Valley: 

http://arec.oregonstate.edu/oaeb/files/pdf/AEB0006.pdf.

The budget for processing sweet corn is another detailed budget. However, it also breaks down cost by 

planting stage. It is easy to conform this budget to our standardized format and very easy to determine the 

preplanting factors.

Production costs (Tab 1)

1. Begin with OSU processing sweet corn budget for 2010.

The budget is detailed, and mostly chronological. The various line items from our condensed budget map 

are as follows:

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The only item missing from the Oregon budget is crop insurance. We calculated this directly from RMA’s 

summary of business files for 2010. Farmer premiums for sweet corn in Oregon were $146,400 ($374,325 

in total premiums less the subsidy of $227,925). These farmer premiums divided by 33,600 insured acres 

yield a crop insurance cost per acre, to the farmer, of $4.36.

2. Production costs for other years were filled using the formula that draws data from price indexes 

(Col A) and calculates values for that year based on the accompanying “Cost Index” data file.

Pre-planting percentage costs by expense category (Tab 2)

3. For the budget, we used the following pre-planting cost percentages:

Cash expenses:

- 23% of fertilizer to reflect the actual percentage in the budget, 

- 23% of fuel, lube, & repair to reflect the actual percentage in the budget, 

- 14% to reflect actual cost of labor prior to planting in the budget,

- 3% of crop insurance, and

- 25% of operating interest. 

 Item 2010

Cash expenses:

 Seed 100.00

 Fertilizer 280.00

 Chemicals 70.00

 Fuel, lube, and repairs 76.41

 Irrigation 85.00

 Hired labor 52.59

 Miscellaneous 2.00

 Crop insurance 4.36

 Interest on operating capital 24.04

 Total, operating costs 694.40

Allocated overhead:

 Returns to management / risk 67.95

 Capital recovery of machinery & equip 47.02

 Opportunity cost of land (rental rate) 200.00

 Taxes and insurance 45.00

 Total, allocated overhead 359.97

 Total costs listed 1,054.37

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And almost all overhead:

- 30% of returns to management risk, to reflect approximate pre-planting effort,

- 100% of machinery depreciation, 

- 100% of opportunity cost of land, and

- 100% of taxes and insurance.

Pre-planting cost estimates (Tab 3)

4. Multiply appropriate cells on Tabs 1 and 2.

5. Copy and paste values from “Total cost” line on Tab 1 to Tab 3.

6. Calculate pre-planting costs as a percentage of total costs.

References:

Oregon State University Extension

http://arec.oregonstate.edu/oaeb/files/pdf/AEB0006.pdf

Washington State University Extension

http://www.farm-mgmt.wsu.edu/PDF-docs/irrigated/eb1941e.pdf

(Note: processing corn accounted for 97.5% of state sweet corn production in 2002 – see p.1 of the report)

2.2.16. Rye

The rye budgets came from 3 major sources, North Dakota State University, Oklahoma State University, and 

Wisconsin University. The North Dakota budgets cover 2004-2012 and are separated into one of nine regions 

in the state. Each budget follows the ERS format very closely so no changes were made to the format. 

Budgets from the rye growing regions in the state were simply averaged together to get a state average by 

year. This average was used as the values for the cost of production. The production costs for 2003 were 

imputed using the price index.

The Oklahoma State University budgets cover 2003, and 2005-2012. Although there was a budget for 2003, 

it was ultimately dropped as the production costs were not in line with the budgets for 2005-2012. The 

production costs for 2003 and 2004 were imputed using the price indexes. In, addition some minor tweaking 

was needed to align the accounting items.

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Figure 1: Oklahoma rye budget mapping to report format.

The budget from Wisconsin was mainly used as a check. There was only one rye budget available for one 

year, 2013. Although the Wisconsin budget has limited usefulness, it can provide insight and necessary clues 

to the overall picture. As only the 2013 data was available, the production costs for 2003 -2012 were 

imputed using the price indexes. In addition, some reformatting was necessary to conform to the budget 

to our standard format.

OPERATING INPUTS Item

Rye Seed Cash expenses:

Fertilizer Rye Seed

$0-Not used Custom Harvest Fertilizer 

Pesticide Pesticide 

Crop Insurance Crop Insurance 

Operating Capital Operating Capital

Machinery Labor Hrs. Machinery Labor Hrs. 

Custom Hire Custom Hire 

Machinery Fuel, Lube, Repairs Machinery Fuel, Lube, Repairs 

$0-Not used Other Expense Total, operating costs

Total Operating Costs 

FIXED COSTS Allocated overhead:

$0-Not used Machinery/Irrigation Interest

Interest Taxes

Taxes Insurance

Insurance Depreciation 

Depreciation Land 

$0-Not used Land Total, allocated overhead

$0-Not used Interest

$0-Not used Taxes

Total Fixed Costs 

Total Costs

Land value based on the ERS 

Production Costs and Returns 

opportunity cost of land for 

wheat in the prairie gateway.

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Operating Costs ($/acre) Operating Costs ($/acre)

Fertility

Urea 46-0-0 22.95 Fertilizer 53.40

Phosphorus 18-46-0 10.85 Rye Seed 24.00

Potassium 0-0-60 19.60 Crop ins 9.93

Seed Plants Pest Scouting 9.00

Rye Seed 24.00 Custom operations 11.44

Miscellaneous Hauling 8.90

Actual production history - Rye 70% 9.93 Herbicides 3.04

Pest Scouting 9.00 Labor 4.31

Custom fertilizer spreading 11.44 Fuel, lube, elec. 22.04

Hauling 8.90 Repairs and Maintenance 17.79

Weed Control Interest on operating costs 3.15

2,4-D (amine) 3.04 Total Operating Costs 167.00

Disease Control

None 0.00

Insect Control

None 0.00

Part-time Labor 4.00

 Part-time Labor Benefits 0.31

Energy Expenses

 Diesel Fuel (with WI tax credit) 16.00

 Gasoline (with WI tax credit) 3.17

 Electricity 0.00

 Engine Lubrication 2.88

Repairs and Maintenance

 Power Units 10.74

 Implements 7.05

 Durables 0.00

Sub-Total 163.85

Interest on Operating Capital - 6 months 3.15

Total Operating Costs per Acre 167.00

Fixed Expenses ($/acre)

Management charge 0.00 Fixed Expenses ($/acre)

Land ownership costs 125.00 Hired Labor 13.80

Labor Expenses 13.80 Capital recovery of machinery & equip 25.09

Interest and Insurance Expenses Opportunity cost of land (rental rate) 125.00

 Power Units 8.16 Interest and insurance 13.72

 Implements 5.56 Total Fixed Expenses per Acre 177.61

 Durables 0.00 Total Costs per Acre 344.61

Depreciation Expenses

 Power Units 11.15

 Implements 13.94

 Durables 0.00

Total Fixed Expenses per Acre 177.61

Total Costs per Acre 344.61

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References:

Budgets:

North Dakota budgets are available at 

http://www.ag.ndsu.edu/farmmanagement/crop-budget-archive

Wisconsin budget available at

http://www.uwex.edu/ces/farmteam/budgets/fieldcrop.cfm

Oklahoma budget (available on request for a fee) from

http://agecon.okstate.edu/budgets/

Other references:

“Alternate Field Crops Manual: Rye”, University of Wisconsin Cooperative Extension

http://www.hort.purdue.edu/newcrop/afcm/rye.html

“Rye Profile” Kansas State University

http://www.agmrc.org/commodities__products/grains__oilseeds/rye-profile/

“Crop Profile for Rye in Georgia”, University of Georgia University Cooperative Extension

http://www.ipmcenters.org/cropprofiles/docs/GArye.html

“Cereal Rye” USDA NRCS Plant Guide

http://plants.usda.gov/factsheet/pdf/fs_sece.pdf

2.2.17. Safflower

Safflower budgets for the years 2004-2012 came from North Dakota State University Extension Service. 

Budgets are separated into one of nine regions in the state. Each budget follows the ERS format very closely 

so no changes were made to the format. Budgets from the safflower growing regions were simply averaged 

together to get a state average by year. This average was used as the values for the cost of production. 

The production costs for 2003 were imputed using the price index.

Production costs (Tab 1)

1. Begin with NDSU safflower budgets for NW and SW North Dakota (2004, 2012) and UC Davis crop 

budgets for bed-planted, irrigated safflower (2005, 2011). NDSU regions were averaged and are 

easily mapped line-for-line; the CA safflower (2011) budget is mapped below.

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2. Production costs for missing years were filled using the formula that draws data from price indexes 

(Col A) and calculates values for that year based on the accompanying “Cost Index” data file.

Pre-planting percentage costs by expense category (Tab 2)

3. For the budget, we used the following pre-planting cost percentages, after consulting with a 

safflower expert:

Cash expenses:

- 100% of fertilizer, 

- 100% of herbicides, 

- 65% of fuel & lubrication and repairs,

- 50% of hired labor,

- 29% of crop insurance,

- and 25% of operating interest.

And most overhead:

- 20% of managerial labor (supervisor),

 Item 2011

Cash expenses:

 Seed 13.00

 Fertilizer 58.00

 Chemicals 19.00

 Custom operations 36.00

 Fuel, lube, and repairs 34.00

 Hired labor 30.00

 Irrigation water 11.00

 Crop insurance 3.40

 Interest on operating capital 5.00

 Total, operating costs 209.40

Allocated overhead:

 Managerial labor 25.00

 Capital recovery of machinery & equip 27.00

 Opportunity cost of land (rental rate) 73.00

 Taxes and insurance 4.00

 Other farm overhead 15.00

 Total, allocated overhead 144.00

 Total costs listed 353.40

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- 100% of machinery capital recovery costs, 

- 100% of land charge,

- 100% of taxes and insurance,

- and 100% of other overhead.

Pre-planting cost estimates (Tab 3)

4. Multiply appropriate cells on Tabs 1 and 2.

5. Calculate pre-planting costs as a percentage of total costs.

References:

Budgets:

CA Budgets (2005, 2011)

http://coststudies.ucdavis.edu/archived.php

NDSU crop budgets (2004, 2012) 

http://www.ag.ndsu.edu/farmmanagement/crop-budget-archive

Utah Budgets 2003, 2006, 2013)

http://extension.usu.edu/agribusiness/htm/budgets

Other references

Agricultural Marketing Resource Center

On safflower: http://www.agmrc.org/commodities__products/grains__oilseeds/safflower/

“Safflower Production”, North Dakota State University Extension Service

http://www.ag.ndsu.edu/publications/landing-pages/crops/safflower-production-a-870

2.2.18. Sunflower Seeds

Sunflower seed budgets for the years 2004-2012 came from North Dakota State University Extension Service. 

Note that separate budgets were built for confectionery and oil sunflower seeds. North Dakota publishes 

separate budgets for each region; these regional budgets were averaged (9 for oil sunflower seeds, 8 for 

confectionery sunflower seeds) to calculate costs for each year.

Each budget follows the ERS format very closely, with most budget categories clearly matching the final 

format. Herbicides and insecticides were combined for the “chemicals” entry, and machinery depreciation 

and machinery investment were combined to form “capital recovery of machinery and equipment.” Finally, 

returns to labor and management were averaged over all 10 years, with the resulting average used as the 

figure for 2008. The figures for 2003-2007 and 2009-2012 were subsequently computed using the NASS price 

index for “LABOR, WAGE RATES.”

Finally, all other 2003 production costs were calculated using appropriate price indexes, identified on the 

first tab of each of the sunflower CAR (costs and returns) files.

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Preplant percentages were obtained using production and timing information provided by extension experts.

Production costs (Tab 1)

1. North Dakota represents 50% of national production and is geographically proximate to other key 

producing areas.

2. We began with NDSU crop budgets for oil sunflower seed and confectionery sunflower seed (2004-

2012), averaging figures for all regions with available budgets. In this case, 8 budgets for oil 

sunflower seed and 7 for confectionery sunflower seed.

3. Production costs for 2003 were filled using the formula that draws data from price indexes (Col A) 

and calculates values for that year based on the accompanying “Cost Index” data file.

Pre-planting percentage costs by expense category (Tab 2)

4. For the budget, we used the following pre-planting cost percentages:

Cash expenses:

- 25% of herbicides, 

- 47% of crop insurance,

- 1/4 of fuel & lubrication and repairs

- 25% of operating interest 

- 1/3 of miscellaneous costs, including soil testing but excluding aerial applications

And almost all overhead:

- 30% of operator labor

- 100% misc. overhead, 

- 100% of capital recover of machinery,

- and 100% of land charge

Pre-planting cost estimates (Tab 3)

For each crop type:

5. Multiply appropriate cells on Tabs 1 and 2.

6. Copy and paste values from “Total cost” line on Tab 1 to Tab 3.

7. Calculate pre-planting costs as a percentage of total costs.

References:

NDSU crop budgets (2004-2013) 

http://www.ag.ndsu.edu/farmmanagement/crop-budget-archive

“Sunflower Production”, North Dakota State University Extension Service

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http://www.ag.ndsu.edu/extensionentomology/recent-publications-main/publications/A-1331-sunflowerproduction-field-guide

2.2.19. Tobacco

The USDA ERS published budgets for 2003 and 2004 for flue cured and Burley tobacco. These budgets are 

no longer published. We combined the ERS budgets with available budgets from the Kentucky and North 

Carolina Extension offices to come up with estimates for the entire 2003-2012 period. Budgets from both 

state extension offices required aggregation of line items to fit into our standard format. See the graphics 

below for the way we constructed the tobacco budgets.

The seedlings represent a sunk cost because there is probably no market for them, as all growers would 

have produced their own or contracted for them. Application of lime, phosphorous and potassium would 

occur before planting but remains an asset if it’s on owned land. Nitrogen would typically be applied just 

before or after planting, so would not be a cost in a prevented planting situation. Soil fumigants would 

probably have been applied in flue-cured production areas and represent about 35% of chemical costs.

The NCSU budgets include all labor, including operator labor, in one category. They do not include a land 

charge so we used 1.5 times the NASS cash rent figures for the state. They also do not include taxes and 

insurance or general farm overhead, so we used the ERS estimates for corn for the Southern Seaboard 

region.

The Kentucky budgets did not include separate costs for custom operations or fuel, lube and electricity. 

Fuel costs were included in variable machinery costs and are included in the repairs line. We used ERS 

estimates for corn in the Eastern Uplands region for general farm overhead.

Kentucky Burley tobacco budget for 2008

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Amount 

(Per 

acre)

Units Price

Total

 $/Ac

2200 lb $1.75 $3,850.00

Item 2008

Cash expenses:

6.5 thousand $40.00 $260.00 Seed and plant bed $260.00

250 lb $0.70 $175.00 Fertilizer $425.50

100 lb $0.75 $75.00 Chemicals $320.00

250 lb $0.60 $150.00 Custom operations

1.5 ton $17.00 $25.50 Fuel, lube, and electricity

1 acre $65.00 $65.00 Repairs $186.00

1 acre $80.00 $80.00 Hired labor $1,800.00

1 acre $125.00 $125.00 Marketing expenses $75.00

1 acre $50.00 $50.00 Miscellaneous $14.00

6 trips $8.50 $51.00 Crop insurance $100.00

1 acre $30.00 $30.00 Interest on operating capital $138.96

3 trips $30.00 $90.00 Total, operating costs $3,319.46

1 acre $15.00 $15.00

1 acre $14.00 $14.00 Allocated overhead:

25 miles $3.00 $75.00 Opportunity cost of unpaid labor $525.00

1 acre $100.00 $100.00 Capital recovery of machinery & equip $200.00

150 hours $12.00 $1,800.00 Opportunity cost of land (rental rate) $250.00

Migrant Housing & Tr 1 acre $0.00 $0.00 Taxes and insurance $148.00

1 acre $0.00 $0.00 General farm overhead*

$3,705.50 dollars 3.75% $138.96 Total, allocated overhead $1,123.00

$3,319.46

$530.54 Total costs listed $4,442.46

 *General farm overhead - used Corn Eastern Uplands

1 acre $250.00 $250.00

$4,000 dollars 5.0% $200.00

1 acre $148.00 $148.00

$598.00

-$67.46

35 hours $ 15.00 $525.00

-$523.64

TOTAL COSTS $4,442.46

Univesity of Kentucky Burley Tobacco Budget, Per 

Acre Costs and Returns

Item

GROSS REVENUE

Tobacco Sales

VARIABLE COSTS

Transplants

Nitrogen

Phosphorus

Potassium

Lime

Herbicides

Insecticides

Fungicides

Sucker Control

Tillage

Planting

Spraying

Cover Crop

Property taxes/insura

Materials & Supplies

Trucking

Crop Insurance

Hired Labor

Other

Operating Interest (1 

TOTAL FIXED COSTS

RETURN TO OPERATOR LABOR AND MANAG

OPERATOR LABOR

Operator labor/manag

RETURN TO CAPITAL & MAN

OTAL VARIABLE COST

RN OVER VARIABLE C

FIXED COSTS

Land Rental Cost

Buildings/facilities co

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North Carolina Flue cured tobacco

References:

Foreman, Linda, and William McBride. Policy Reform in the Tobacco

Industry: Producers Adapt to a Changing Market, EIB-77, U.S.

Department of Agriculture, Economic Research Service, May 2011.

http://www.ers.usda.gov/publications/eib-economic-information-bulletin/eib77.aspx

“2011-2012 Kentucky & Tennessee Tobacco Production Guide”, University of Tennessee institute of 

Agriculture & University of Kentucky College of Agriculture

http://www2.ca.uky.edu/agc/pubs/id/id160/id160.pdf

Variable Costs

Plants 155 Item 2008

Fumigation 136.5 Cash expenses:

Fertilizer 208.53 Seed and plant bed 155.00

8-16-24 143.5 Fertilizer 208.53

15.5-0-0 51 Chemicals 327.17

Lime (prorated) 14.03 Custom operations/hauling 48.00

Herbicides 43.23 Fuel, lube, and electricity 99.00

Insecticides 34.5 Curing fuel 392.00

Sucker control 112.94 Repairs/machinery costs 217.32

Hauling 48 Hired labor 815.99

Cover Crop 0 Marketing expenses

Curing Fuel 392 Miscellaneous 7.20

Electricity 99 Crop insurance 65.00

Crop Ins 65 Interest on operating capital 27.63

Baling Supplies 7.2 Total, operating costs 2,362.84

Tractor/Machinery 217.32

Labor Allocated overhead:

Pre Harvest 241.92 Opportunity cost of unpaid labor

Harvest 376.32 Capital recovery of machinery and equipment 491.27

Mach Pre Harvest 34.23 Opportunity cost of land (rental rate) 81.75

Mach Harvest 163.52 Taxes and insurance 8.95

Interest on Operating capital 27.63 General farm overhead 18.05

 Total, allocated overhead 600.02

Fixed costs Total costs listed 2,962.86

Tractor/Machinery 317.94

Bulk Barn 173.33

Rent based on 1.5 x NASS cash rent for the state

Taxes & insurance = ERS S. Seaboard # for corn

General farm overhead = ERS S. Seaboard # for corn

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2.3. Special cases

There are three special cases, hybrid corn seed, hybrid sorghum seed, and sugar beets. Sugar beet 

production costs were combined from ERS data and University budgets. Both hybrid corn seed and hybrid 

sorghum seed were special cases for which no budget existed at all. These crops are different from the 

other crops covered by the Prevented Planting provisions. First, these crops produce the seed stock for the 

following year’s crop. Second, there are relatively few producers for hybrid seed stocks and the farmers 

usually specialize in seed production. Third, production inputs are similar to the production crop but 

management practices are much more intense. Fourth, some costs are borne by the seed companies and 

in most cases any extraordinary costs are borne by the seed company. Fifth, crop failure is rare due to the 

intense management from the farmer and extensive support from the seed company. For these reasons,

production costs are generally not known outside the community of farmers that produce seed stocks. In 

order to produce any sort of budget we resorted to interviews with seed company agronomists. They work 

in the test fields and closely with the farmers who produce the seed stocks and are in the best position to 

estimate costs and production practices.

2.3.1. Hybrid corn seed 

There are no known published hybrid corn seed estimates of production. Production costs were estimated 

based on ERS corn cost data and expert opinion of costs for the 2013 crop year. Production costs for 

previous years were imputed using the price indexes to calculate the value.

In the absence of a production cost budget for hybrid seed corn, we adapted the corn production budget as 

follows:

• We deleted seed costs and crop insurance costs.

• We added a line for detasseling, using a figure of $280/acre we found for 2007 and indexing it for 

the other years.

• We increased the factors for fuel and repairs to 44% and 40% to reflect the higher number of field 

operations prior to planting.

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Production costs

 Item

Cash expenses:

 Seed Paid by seed co

 Fertilizer Similar fert costs to 120-160 bu./acre com corn

 Chemicals

Some paid by seed co., com. If needed, very little cost maybe $0.50 per 

acre

 Custom operations ERS Corn Commodity Costs and Returns

 Fuel, lube, and electricity Zero no till. Ops. One to 2 extra passes preplanting. 

 Repairs Zero no till. Ops. One to 2 extra passes preplanting. 

 Purchased irrigation water Some preplant irrigation in central Corn belt

 Crop Insurance Paid by seed co

 Detasseling

Estimate came from research paper, independently verified by seed 

company agronomist

 Interest on operating costs

 

Allocated overhead:

 Hired Labor ERS Corn Commodity Costs and Returns

 Opportunity cost of unpaid labor ERS Corn Commodity Costs and Returns

 Capital recovery of machinery & 

equip. ERS Corn Commodity Costs and Returns

 Opportunity cost of land (rental 

rate) ERS Corn Commodity Costs and Returns

 Taxes and insurance ERS Corn Commodity Costs and Returns

 General farm overhead ERS Corn Commodity Costs and Returns

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Prevented planting factor

 Item

Cash expenses:

 Seed 0%, Paid by seed co

 Fertilizer Similar fert costs to 120-160 bu/acre com corn

 Chemicals

Some paid by seed co., com. If needed, very little cost maybe $0.50 per 

acre

 Custom operations ERS Corn Commodity Costs and Returns

 Fuel, lube, and electricity One to 2 extra passes preplanting. 22 -> 44

 Repairs One to 2 extra passes preplanting. 19 -> 40

 Purchased irrigation water Some preplant irrigation in central Corn belt

 Crop Insurance 0% Paid by seed co

 Detasseling 0%

 Interest on operating costs ERS Corn Commodity Costs and Returns

 

Allocated overhead:

 Hired Labor ERS Corn Commodity Costs and Returns

 Opportunity cost of unpaid labor ERS Corn Commodity Costs and Returns

 Capital recovery of machinery & 

equip. 100%

 Opportunity cost of land (rental 

rate) 100%

 Taxes and insurance 100%

 General farm overhead 100%

References:

APHIS - Pioneer Hi-Bred DP32138-1

http://www.aphis.usda.gov/brs/aphisdocs/08_33801p_dea.pdf

Detasseling: 

http://www.pantagraph.com/business/teens-drawn-to-cash-rewards-of-detasselingcorn/article_09e58722-998a-5dfe-aea6-20282a782b7e.html

2.3.2. Hybrid sorghum seed 

There are no known published hybrid sorghum seed production cost estimates. Production costs were 

estimated based on ERS sorghum grain data and expert opinion of costs for the 2013 crop year. Production 

costs for previous years were imputed using the price indexes to calculate the value.

The seed company representative we spoke with indicated production costs of seed for grain sorghum, 

forage sorghum, and sudangrass sorghum. Each has the same costs except for the way the seed companies 

handle what they provide the farmer at no charge. 

Production costs:

The table below details the production costs provided by a seed company representative.

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 Item 2013

Cash expenses:

 Seed 0 Seed company provides seed

 Fertilizer 150 Same as for grain sorghum 65% pre planting

 Chemicals 115 Same as for grain sorghum 50% pre planting

 Custom operations 30 Same as for grain sorghum 50% pre planting

 Fuel, lube, & electricity 200 11 field passes 5 before planting = 45%

 Repairs same as for Prairie Gateway grain sorghum

 Purchased irrigation water 180

18in/acre, about $10/inch, same as sorghum and 30% less than irr 

corn

 Hauling 0 Seed company provides hauling

 Crop Insurance same as for Prairie Gateway grain sorghum

 Interest on operating capital same as for Prairie Gateway grain sorghum

Allocated overhead:

 Hired labor 25

same as for other comparable crops in TX including grain sorghum 

50% preplanting

 Opportunity cost of unpaid 

labor same as for Prairie Gateway grain sorghum

 Capital recovery of machinery 

& equip same as for Prairie Gateway grain sorghum

 Opportunity cost of land 

(rental rate) same as for Prairie Gateway grain sorghum

 Taxes and insurance same as for Prairie Gateway grain sorghum

 General farm overhead same as for Prairie Gateway grain sorghum

Prevented planting factors:

The table below shows the details of the prevented planting factors provided by a seed company 

representative. The cash expenses all came from his recommendations. The allocated overhead factors 

follow our normal convention except hired labor and opportunity cost of labor. The hired labor and 

Opportunity cos categories were a reasonable estimate provided by the seed company representative. 

 Item 2013

Cash expenses:

 Seed 0%

 Fertilizer 65%

 Chemicals 50%

 Custom operations 50%

 Fuel, lube, & electricity 45%

 Repairs 45%

 Purchased irrigation water 25%

 Hauling 0%

 Crop Insurance

 Interest on operating capital 25%

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Allocated overhead:

 Hired labor 50%

 Opportunity cost of unpaid 

labor 50%

 Capital recovery of machinery 

& equip 100%

 Opportunity cost of land 

(rental rate) 100%

 Taxes and insurance 100%

 General farm overhead 100%

Grain sorghum - Methodology

Production costs (Tab 1)

7. We used a combination of expert testimony for 2013 and 2003-2012 ERS production data to 

estimate production costs. The experts’ numbers for 2013 were then adjusted using the indexes 

to fill in values for 2003-2012.

8. Crop insurance costs were added from RMA data

Pre-planting percentage costs by expense category (Tab 2)

9. For the budget, we used the following pre-planting cost percentages, which again are a 

composite of ERS data and expert opinion respectively.

Cash expenses:

• 0% for seed,

• 65% of fertilizer 

• 50% of chemicals

• 50% of custom operations 

• 45% of fuel, lube, and electricity

• 45% of repairs

• 0.2% of crop insurance, and 

• 25% of interest on operating costs 

Overhead:

• 50% of hired labor,

• 50% of the opportunity cost of unpaid labor,

• 100% of the capital recovery of machinery & equipment,

• 100% of the opportunity cost of land,

• 100% of taxes and insurance, and 

• 100% of general farm overhead

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Pre-planting cost estimates (Tab 3)

10. Multiply appropriate cells on Tabs 1 and 2.

11. Link “Total cost” values from Tab 1 on Tab 3. 

Calculate pre-planting costs as a percentage of total costs.

References:

“Nutrient Management Suggestions for Grain Sorghum” (University of Nebraska-Lincoln)

http://www.ianrpubs.unl.edu/pages/publicationD.jsp?publicationId=671

“Sorghum Fertility Management,” Bill McClure, Pioneer

https://www.pioneer.com/home/site/ca/template.CONTENT/products/sorghum/productionmanual/guid.AE3799A5-A380-492A-B5DF-1D49E8B1735B

“Grain Sorghum,” University of Arizona

http://cals.arizona.edu/crops/soils/aznsorghum.pdf

Grain Sorghum Production Calendar

http://pods.dasnr.okstate.edu/docushare/dsweb/Get/Document-2620/PSS-2113web.pdf

Others

http://sorghumcheckoff.com/for-farmer/production-tools/

http://sorghumcheckoff.com/wp-content/uploads/2012/06/WhatisSorghum.pdf

2.3.3. Sugar beets

Sugar beets represent a special case of the ERS data. Future updates will require an approach as described 

in the budget based crops section. 

ERS prepared estimates of production cost for sugar beets up through 2007 in connection with the sugar 

program. Estimates are available for three regions, defined as Great Lakes, Great Plains, and Northwest.

For later years one has to rely primarily on state extension budgets. We found full or partial budgets for 

selected years for Idaho (2009, 2011), Michigan (2011), Colorado (2010, 2012), Nebraska (2011) and 

Minnesota (2010). The recent budgets specifically address costs for Roundup Ready beet production. 

Fortunately we also found actual production cost data for Minnesota and North Dakota through the 

University of Minnesota’s FINBIN database which compiles actual farm financial and operating data from 

participating farmers. An average of 135 sugar beet growers participate each year, which is a respectable 

sample.

We used the Michigan and Idaho budgets and the FINBIN cost data in extending the production cost estimates 

for the three regions in the ERS data. The resulting budgets are representative of 85 percent of total sugar 

beet harvested area.

For Idaho and Michigan, the crop insurance cost is based on RMA SOB data and the share of indemnities 

attributable to prevented planting claims. We estimated taxes.

The Michigan budget did not include figures for custom operations, capital recovery, general farm overhead 

or the coop share cost. These were extrapolated using price indexes 

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For the Red River Valley of Minnesota and North Dakota, the FINBIN data included a crop insurance cost 

which we used. We estimated the Coop share.

The linkages to our ERS budget format are shown on the next three pages.

Idaho Costs for 2011:

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Michigan costs

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Red River Valley 2011 costs from FINBIN:

Direct Expenses 

Seed 155.15 Item 2011

Fertilizer 97.08 Cash expenses:

Crop chemicals 86.08 Seed 155.15

Crop insurance 24.8 Fertilizer 97.08

Fuel & oil 80.86 Chemicals 86.08

Repairs 98.99 Custom operations 19.26

Custom hire 14.39 Fuel, lube, and electr 80.86

Total Custom hire 19.26 Repairs 98.99

Hired labor 23.77 Hired labor 72.24

Total hired labor 72.24 Freight and dirt hauli 9.40

Land rent 92.62 Miscellaneous 11.02

Stock/quota lease 122.19 Hauling allowance (-) 0.00

Land plus quota 214.81 Crop insurance 24.80

Machinery leases 3.97 Interest on operating 17.84

Hauling and trucking 9.4 Total, operating cos 672.72

Marketing 0.42

Organic certification 2.11 Allocated overhead:

Operating interest 17.84 Opportunity cost of u 119.14

Miscellaneous 4.52 Capital recovery of m 102.20

Total Miscellaneous 11.02 Opportunity cost of la 214.81

Total direct expenses per acre 834.2 Taxes and insurance 16.15

Return over direct exp per acre 352.38 General farm overhea 14.04

 Coop share 16.00

Overhead Expenses Total, allocated ove 482.34

Custom hire 4.87

Hired labor 48.47 Total costs listed 1,155.06

Machinery leases 8.54

Building leases 2.38

RE & pers. property taxes 4.32

Farm insurance 11.83

Taxes + insurance 16.15

Utilities 8.18

Dues & professional fees 5.86

Interest 21.7

Mach & bldg depreciation 91.28

Machinery & equipment 102.2

Miscellaneous 12.88

General farm overhead 14.04

Total overhead expenses per acre 220.31

Total dir & ovhd expenses per acre 1,054.51

Net return per acre 132.07

Government payments 11.69

Net return with govt pmts 143.76

Labor & management charge 119.14

Net return over lbr & mgt 24.61

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References:

Idaho budgets

http://web.cals.uidaho.edu/idahoagbiz/enterprise-budgets/

FINBIN budgets (see instructions under green peas, Section 2.2.7)

http://www.finbin.umn.edu/

Michigan budgets

http://firm.msue.msu.edu/budgets_cost_of_production_and_decision_making_tools

2013 Sugar Beet Production Guide

NDSU and U. Minnesota Extension Service

http://www.sbreb.org/production/2013/2013SBProductionGuide.pdf

Characteristics and Production Costs of U.S. Sugarbeet Farms

http://www.ers.usda.gov/publications/sb-statistical-bulletin/sb974-8.aspx

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3. UPDATING PREVENTED PLANTING COST ESTIMATES

3.1. Updating methodology

Producing estimates of prevented planting costs involves four basic steps. 

Step one: identify crop budgets for all available years 

The goal here was to include, on a yearly basis for the years 2003 through 2012, annual cost estimates for 

various expense categories for each crop. Categories were listed under operating costs (fertilizer, fuel, 

repairs, etc.) or overhead costs (capital costs of machinery, land, etc.).

For the major crops, and some others, we had data available from USDA’s ERS for all years, derived from 

ARMS surveys. The ERS publishes CAR (cost and returns) data for the eight major crops. The CAR information 

relies on surveys to account for farm production costs. As such, it is as statistically representative of 

average costs as possible. Where available, we used these figures. 

For minor crops there are no statistically valid historical data; one must rely on published budgets. These 

are generally published by state university extension offices in key growing states. They tend to be forecast 

models that only represent a rough/best guess as to costs for the upcoming crop year. Most are based on 

small surveys or conversations with farmers.

 For some states and crops, these budgets are updated annually, thus we had data for all (or 

almost all) years. 

 For other states and crops, we had episodic budgets (published only once or every few years).

Extensions in some cases published multiple budgets for the same crop type, but differing by management 

practice (till vs. no till, irrigated vs. non-irrigated), by variety, by geographic regions within the state, or 

in some other way. We dealt with these situations in different ways. In some cases, we chose a single, 

“most representative” budget. In others, we averaged multiple budgets (e.g., averaging regional budgets 

within a state).

Typically, one or more expense items that we considered to be a pre-planting cost had to be added to any 

given crop budget (e.g., crop insurance payments or a land charge). 

Step two: estimate values for missing years

For crops where published budgets were not available for every year, we had to estimate the costs for that 

year. We did this by using price index data to estimate the missing values. For example, to calculate a 

2006 machinery expense we did not have, we would take a published 2005 machinery expense and use 

NASS’s prices paid index for machinery costs (i.e., reflecting machinery inflation) to calculate the value for 

2006. The price index data come from the USDA NASS Quick Stats database. We considered using price 

indexes from other sources but concluded that the various NASS series sufficiently comprehensive.

This process required the use of a separate Cost Index file, which includes all the relevant price indexes. 

In each crop budget, each expense line also identifies the relevant index (e.g., CONSUMER PRICE INDEX, or 

MACHINERY, or REPAIRS). 

We then used formulas that would “look up” both the relevant index and values already available, then 

calculate and populate the missing values. This exercise was complex and is described below.

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Step three: estimate the percentage of each cost category that should be considered pre-planting

Just as with budget availability, the precision of our pre-planting percentages varied.

 For several major crops, ERS updated (in late 2013) its pre-planting percentage estimates. 

 For some other crops, previous ERS pre-planting percentage estimates were available, though 

not updated.

 For the remaining crops, we relied on multiple techniques to identify the most appropriate 

percentage for each expense category for each crop:

• In some cases, we chose percentages for analogous major crops (e.g., using the same land 

costs for rye as for spring wheat).

• For some categories, we considered the proportion of field operations, based on an 

analysis of budgets (for example, if 2 of 7 field passes occurred prior to planting, our fuel 

and repair estimates would be 2/7 or 29% of overall reported fuel and repair costs).

• Some budgets, in addition to detailing expenses by category, also detail expenses 

chronologically, thus allowing us to identify the proportion of expenses in each category 

that was spent pre-planting.

• In other cases, we were influenced by conversations with extension/crop experts. 

References are provided in each crop section.

• We used other techniques as well.

For each crop, we provide a detailed methodology, including any special circumstances or techniques 

employed.

Step four: multiply budgets by pre-planting percentages to get pre-planting costs

Once (1) a cost budget spreadsheet and (2) a pre-planting percentages spreadsheet were built, we 

multiplied their corresponding values onto a third spreadsheet, one listing (3) pre-planting costs. 

This third spreadsheet also divided these pre-planting costs by total costs to identify the percentage of 

costs for each year that are pre-planting costs.

3.2. Updating procedures

How to update the prevented planting estimates will depend on the source of the crop budget data, 

generally either the ERS Cost of Production Survey or university extension budgets.

1. Updating ERS cost and return estimates

Updating the ERS cost and return estimates are straightforward. Simply obtain the most recent budgets 

from http://www.ers.usda.gov/data-products/commodity-costs-and-returns.aspx.

 In the “Production costs” tab, append the table with the new years, then plug the updated 

numbers into the excel spreadsheet in the correct region and year. 

 In the “Preplant” tab, append new years to the existing table and finally extend the factors 

across to the appropriate ending year. 

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 Finally, in the “[crop] prevented planting” tab, append the new years into the table and copy 

the formulas to the right to fill in the estimates.

2. Updating university extension budgets

 For the university extension budgets, check the source to see if there are updated budgets. 

Next, review the methodology specifics for the crop to see if anything needs to be done to the 

budget.

 Enter the new budget data for available years.

Any missing years and/or data will need to be estimated using NASS price indexes.

3. Estimate missing values using NASS price indexes.

Two files are needed for each crop: 

 a CAR file (that contains the production costs, prevented planting factors, and the prevented 

planting percentages), and 

 a cost index file (that contains the NASS index for prices paid). 

These files must be located together in the same folder. The CAR files follow this naming convention: 

“[Crop] CAR.xlsx.

The data for the cost index file comes from the NASS QuickStats 2.0 online web query tool, 

http://www.nass.usda.gov/Quick_Stats/.

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The information to update the cost index file is highlighted in the graphic above. Specifically, select:

• Sector: ECONOMICS

• Group: PRICES PAID

• Commodity: ALL

• Category: INDEX FOR PRICES PAID 1990-1992

• Data Item: ALL

• Year: [Select appropriate years]

Add the new data on the “Index” tab of “Cost Index.xlsx file; make sure the data and categories match:

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Update the “Reference Calcs” tab of the “Cost Index.xlsx” file by extending columns F through H.

Each column contains a sequence. These must be continued, e.g., 2013 is followed by 2014, 2015 etc., S 

is followed by T, U, V etc. If the sequence goes past Z the next character would be AA, then AB, and so 

on.

In the “[CROP] Car.xlsx” file there are three (3) tabs. The first tab is where the production budget data is 

entered. It also references the appropriate price index in the “Cost Index.xlsx” file.

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In the picture above, the blue boxes indicate (1) the cost index references and (2) the expense categories 

for the budget data. These will not change. The red box is where new data will need to be appended, if 

it was not already entered directly from available budgets (in step #2).

Missing data will be estimated using formulas that use the price index listed in Column A to then pull a 

scaling factor from the Cost Index file.

The formula we used is highlighted in the following image.

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The cell references are identified in the image as well. The formula uses two named ranges: “PPI” and 

“Column”. Both refer to the “Cost Index.xlsx” file. PPI (highlighted) refers to the data on the Index tab 

starting at B2 and extending to the last column and row in which there is data. In the example below, the 

data extends from B2 to S42.

The “Column” named range refers to the highlighted cells (G2:H18) on the “Reference calcs” tab.

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A step-by-step explanation of the formula 

=IFERROR((VLOOKUP($A17,PPI,(VLOOKUP(CHAR(CODE(K$2)+1),Column,2,FALSE)),FALSE)/VLOOKUP($A17,P

PI,(VLOOKUP(K$2,Column,2,FALSE)),FALSE))*K17,"ERR") is as follows:

1. ((VLOOKUP($A17 looks up the index phrase in $A17 = LABOR, WAGE RATES - INDEX FOR PRICE PAID, 

1990 – 1992 

2. PPI, then finds that phrase in the Cost Index workbook and finds that the index is on Row 23

3. (VLOOKUP(CHAR(CODE(K$2)+1) looks up the character code in cell $K2 for the “Column” reference 

(Q) then adds one --> R

4. Column,2,FALSE)),FALSE)/, looks up R in the “Column” range to find in column the data point in 

R23 --> 199

5. 199 divided by

6. ((VLOOKUP($A17, looks up the index phrase in $A17 = LABOR, WAGE RATES - INDEX FOR PRICE 

PAID, 1990 – 1992 

7. PPI, then finds that phrase in Cost Index workbook and finds that the index data is on Row 23

8. (VLOOKUP(CHAR(CODE(K$2)), looks up the character code in cell $K2 for the “Column” reference 

(Q)

9. Column,2,FALSE)),FALSE)/, looks up Q in the “Column” range to get the data point in Q23 --> 192

10. 199/192= 1.0364583333

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11. *K17, multiplied by cell K17 --> 4.50

The IFERROR [=IFERROR (,”ERR”)] function simply alerts the user to a breakdown in the formula.

Finally, make sure that the columns and factors on Tabs 2 (Preplant) and 3 ([Crop] prevented planting costs) 

of the CAR file have been extended to cover the additional years.

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