# Forecasting Cost Risks of Corn and Soybean Crops through Monte Carlo Simulation
## 2 Materials and Methods
### Economic Analysis of Corn and Soybeans
\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 \multicolumn{6}{c}{Productivity Data} \\ \hline \multirow{2}{*}{EPROD} & 91 bag/ha & 60 kg/bag & Corn & 11.3 & NA & NA \\  & 50 bag/ha & 60 kg/bag & Soybean & 22.6 & NA & NA \\ \hline \multicolumn{6}{c}{Gross Income} & \multicolumn{6}{c}{USD} \\ \hline \multicolumn{6}{c}{Corn} & \multicolumn{6}{c}{1026.3} \\ \multicolumn{6}{c}{Soybean} & \multicolumn{6}{c}{1128.6} \\ \hline \multicolumn{6}{c}{DOIL: diesel; FUT: fungicide trifoxytriben tebuonazole; HEGL: herbicide glyphosate; INTL: insecticide thiamethoxyam lambda-cylhalothrin; DLLC: dolomitic limestone corrective; NPKF: NPK 05-25-25 fertilizer; dollar exchange rate; SOY: soybean bag; COR: corn bag; SOYS: soybean seed; CORS: corn seed; TRAC: tractor driver hours (h); DAI: daily worker hours (h); PCF: potassium chloride fertilizer; URF: urea fertilizer. TCOST: Total Cost; EPROD: Expected Yield/Productivity; L: liter; T: tonne; ha: hectare; kg: kilogram. h: hours; NA not applicable. Source: São Paulo Banco de Dados [39].} \\ \hline \end{tabular}
\end{table} 
Table 2: _Cont._  
Figure 1: Frequency graph of total cost soy/hectare. The data used in this analysis were obtained from IPEA data, available from the authors upon request. For comparison purposes, the average calculation was performed considering only the costs of operating expenses, excluding other costs such as storage and charges, among others. The average production cost of soybeans was found to be USD 417.77 during the period between 2019 and 2021. The levels of certainty of the average production cost per hectare of corn associated with the analyzed variables were calculated using MCS and are presented in the frequency graph (Figure 2). The simulation results show that the range between USD 600.00 and USD 1150.00 contains the average production costs of corn per hectare in the state of Sao Paulo, with a level of certainty of 84.7% (blue Figure 2) for an average of USD 870.80 and a standard deviation of USD 192.40, considering the period between 2018 and 2022. The monitoring data from [54] regarding the production costs of the second corn crop for the years 2019 and 2020 show an average production cost of USD 421.26, represented by the city of Assis. On the other hand, [55] indicates costs in other states in Brazil that corroborate these results, with costs ranging from USD 613.00 to USD 653.00 in the 2018/19 and 2019/20 harvests (using transgenic seeds). It was observed that the production costs in each municipality and state were influenced by differences in terms of productivity. The costs of high-productivity areas are lower than the costs of low-productivity areas [13]. In addition to productivity, other factors contribute to the observed differences in corn production costs in the different regions, such as climate [56], prices of inputs [57], and technology used [58,59]. The most significant cost elements of corn and soybeans production costs (fertilizers and soil amendments) account for 68.7% and 61.5%, respectively. Equally important are the costs of agricultural inputs (herbicides, insecticides, and fungicides), which amount to 15% and 18.4% for corn and soybeans, respectively. An alternative to reduce these costs would be the use of Variable Rate Technology (VRT), which means the application of soil amendments and fertilizers according to each point analyzed by the grid or management zone [11]. According to [PERSON] et al. [60], this technique is employed in precision agriculture for the application of inputs and agricultural pesticides, which allows for the optimization of the effectiveness and costs of these inputs. These authors stated that the use of a VRT system proved to be advantageous in agricultural production. Consumption of inputs and, consequently, the cost of chemical fertilizers, can be reduced using organ mineral fertilizers (combinations of organic sources). Corroborating this, [PERSON] et al.