Current Year Cost of Production Estimates for Corn & Soybeans
Ag Decision Maker through Iowa State University Extension and Outreach released cost estimates of crop and pasture maintenance for the 2022 year. While the estimates cannot be tailored to each individual farm, they are an average of what a typical farmer can expect. Larger farms and smaller farms may be further away from the estimates due to their fixed costs. The data published was collected from multiple sources: “They include the annual Iowa Farm Business Association record summaries, production and costs data from the Departments of Economics, Agricultural and Biosystems Engineering, and Agronomy at Iowa State University, and a survey of selected agricultural cooperatives and other input suppliers around the state.”
The reported costs for corn and soybeans, starting in 2019, “reflect 30-year trend yields.” These numbers are updated annually. Cost per acre or per bushel includes seed, cheminals, machinery, labor, and land. Beginning this year, “reference yields are adjusted by the percent of the maximum yield attainable at the maximum return to nitrogen (MRTN) rate according to the Corn Nitrogen Rate Calculator.”
Corn Following Corn
The estimated production cost of corn following corn per acre for 2022 is $841.70. This is up about $140 from 2021. The assumed yield is 180 bu, down just 4 from 2021. Total cost per bushel is $4.68, which has not been that high since 2016.
Corn Following Soybeans
In 2021, the production cost of corn following soybeans was $664.42. For this year, the production cost is up to $784.76, and the assumed yield is down to 198 bu from 201 bu in 2021. The cost per bushel is $3.96, which is again comparable to 2016.
Soybeans Following Corn
Your soybeans following corn will change the least in 2022. Total production cost is up only about $75, coming in at $574.96. The yield for this crop has stayed steady since 2019 at 56 bu. The cost per bushel is up to $10.09. This is up from $8.94 in 2021, but again similar to 2016.
Seed, Chemicals, Etc.
For both corn and soybeans, costs for seed and chemicals are up $50-$100 from 2021. This is the biggest contributing factor to the higher production costs. While soybean yields are staying the same, corn has a lower yield but a higher cost. Corn following corn has a seed & chemical price increase of over $100 from 2021. This change is major. In 2020, the cost for seed & chemicals was $299, raised only by about $10 in 2021. The jump to over $400 in 2022 is the reason for the higher production costs. The seed and chemical costs for both corn and soybeans have never been this high.
The reason for the high chemical costs is nitrogen. Nitrogen cost is up 200% from 2021, and the demand growth is 1%. There are a few reasons for the higher cost. The first is an increase in natural gas prices due to countries reopening after the pandemic. Another reason is the amount of acres planted. Farmers are encouraged to grow soybeans when possible instead of corn to keep both cost and demand reasonable.
As stated, these cost estimates are the average for Iowa farms. To get the exact estimates for your farm, Ag Decision Maker has a worksheet alongside their data to assist you. Being aware of the higher costs, especially for fertilizers, will help you make decisions about possible costs you can cut throughout the year.
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