# Forecasting Cost Risks of Corn and Soybean Crops through Monte Carlo Simulation
## 2 Materials and Methods
### Economic Analysis of Corn and Soybeans  
The data related to prices, quantity of inputs used in soybean and corn cultivation, production costs, and net profit are presented in Table 2. The 'description' column highlights the quantity used for the different inputs, while the 'crop' column indicates whether they are used in corn, soybean, or both. The average cost per hectare for the different inputs is also presented. The inputs that contribute more to the total production cost of these crops are NPK 05-25-25 fertilizer (45.9% in corn production and 56.5% in soybean production), soybean seeds (15.7% in soybean production), corn seeds (10.5% in corn production), potassium chloride fertilizer (9.6% in corn production), and urea (9.2% in soybean production). \begin{table}
\begin{tabular}{c c c c c c} \hline \hline
**Items** & **Description** & **Unit** & **Crop** & **Cost/ha (USD)** & **Cost/ha/Corn (\%)** & **Cost/ha/Soybean (\%)** \\ \hline DOIL & 36 & L/ha & Corn/soybean & 29.8 & 4.7 & 5.8 \\ FUT & 0.750 & L/ha & Corn/soybean & 28.9 & 4.6 & 5.7 \\ HEGL & 5 & L/ha & Corn/soybean & 36.2 & 5.8 & 7.1 \\ INTL & 0.750 & L/ha & Corn/soybean & 28.6 & 4.6 & 5.6 \\ DLLC & 1 & T/ha & Corn/soybean & 25.3 & 4.0 & 5.0 \\ NPKF & 500 & T/ha & Corn/soybean & 288.0 & 45.9 & 56.5 \\ COR & 60 & kg/ha & Soybean & 10.5 & NA & NA \\ SOY & 20 & kg/ha & Corn & 11.3 & NA & NA \\ SOYS & 60 & kg/ha & Soybean & 79.9 & NA & 15.7 \\ CORS & 20 & kg/ha & Corn & 66.0 & 10.5 & NA \\ TRAC & 2 & 2 h/ha & Corn/soybean & 2.83 & 0.5 & 0.6 \\ DAI & 2 & 2 h/ha & Corn/soybean & 3.84 & 0.6 & 0.8 \\ PCF & 100 & kg/ha & Corn & 60.2 & 9.6 & NA \\ URF & 100 & kg/ha & Corn & 58.0 & 9.2 & NA \\ \hline \multirow{2}{*}{TCOST} & NA & ha & Corn & 627.7 & 100 & NA \\  & NA & ha & Soybean & 509.5 & NA & 100 \\ \hline \hline \end{tabular}
\end{table} 
Table 2: Economic analysis of corn and soybeans. The average production cost per hectare is USD 627.7 for corn and USD 509.5 for soybean. The Expected Yield/Productivity per hectare for corn and soybean was based on the literature (EPROD in Table 2). In the market, these grains are sold in 60 kg bags, thus, the average production cost per bag is presented. The Gross income was calculated by multiplying the expected productivity by the average price of corn and soybean bags. The levels of certainty regarding the average production cost per hectare of corn associated with the analyzed variables were calculated using MCS and are presented in the frequency graph presented in Figure 1.  
The simulation results presented in Figure 1 show that the average production costs of soybean per hectare in the state of Sao Paulo ranged between USD 260.00 and USD 420.00, with a level of certainty of 86.4% (blue Figure 1) for an average of USD 340.20 and a standard deviation of USD 53.55, in the period between 2018 and 2022. These results are based on historical prices. Thus, the analysis conducted can help in the minimization of uncertainty regarding soybean production costs for the state and support decision-making regarding input purchases. The results obtained in this study are similar to the information published by [53] for the state of Sao Paulo, specifically the city of Assis, one of the main corn producers' municipalities in the state. The values provided by Conab are presented in Brazilian Reais and have been converted to US Dollars using the average exchange rate (R$/USD) for each year.