2001 Economies of Scale Soybean Production Budget1
500, 1000, and 2000 Acres
40 Bushel per Acre Yield
Conservation Tillage Practices
Ohio State University Extension
  ITEM     EXPLANATION PRICE PER ACRES 2   YOUR
UNIT BUDGET
                  500 1000 2000    
RECEIPTS
Soybeans $5.40 /bu $216 $216 $216  
Yield 40 bu/A
VARIABLE  COSTS 3
Seed 80 lbs. 7% price adjust 21 20 19  
Fertilizer 4 .
P2O5(lbs) 30 10% price adjust 8 7 6  
K2O(lbs) 75 10% price adjust 11 10 9  
Lime(lbs) 750 10% price adjust 6 6 5  
Chemicals 5 7% price adjust 21 20 18  
Trucking - Fuel Only 0.03 /bu 1 1 1  
Fuel, Oil, Grease 5 5 5  
Repairs 12 12 11  
Miscellaneous 6 12 13 14  
Int. on Oper. Cap. 7 5 mo. 9.0% 4 3 3  
Hired Labor 8 0 0 0  
         
TOTAL VARIABLE COSTS -Per Acre 102 98 92  
-Per Bushel 2.54 2.44 2.30  
FIXED COSTS
Labor charge  (hrs.) 8 2.9 2.6 2.3 7.50 /hr 21 20 18  
Mach. and Equip. Charge 9 71 53 40  
Land Charge 70 70 70  
Management Charge 10 4% 5% 6% of gross revenue 9 11 13  
         
TOTAL FIXED COSTS 171 153 141  
TOTAL COSTS -Per Acre 272 251 233  
-Per Bushel 6.81 6.27 5.82  
RETURN ABOVE VARIABLE COSTS (ACRE) 114 118 124  
RETURN ABOVE TOTAL COSTS (ACRE) (56) (35) (17)  
RETURN TO LABOR AND MANAGEMENT (ACRE)11 (26) (5) 14  
TOTAL RETURN TO LABOR AND MANAGEMENT FOR OPERATION 12 (13,088) (4,642) 27,180  
       
1 This budget is intended to provide an example of how size of operations can affect the costs and returns of a crop enterprise.  It is only one of many possible scenarios and is not intended to provide the user with specific revenues, costs, or returns.
2 Acreage is total acres of soybeans produced.  Does not include acreage of other crops produced on the same farm.
3 A price adjustment is included for some variable costs.  This reflects the possible price difference of an input
based on quantity purchased.  The 1000 acre column is the base price, the 500 acre column pays base price
plus price adjustment, the 1000 acre column pays base price less price adjustment.  Some costs may not
reflect adjustment due to rounding.
4 Assumes only maintenance application of fertilizer needed, soil test values of 20 ppm P/A and 125 ppm K/A.
5 Based on use of Canopy, Fusion, COC.
6 Includes supplies, utilities, soil tests, small tools, crop insurance, etc…
7 Interest on all variable costs, except trucking, for 5 months at 9% interest rate.
8 Part or all of labor may be a variable cost if paid labor varies with acres farmed. It’s a fixed cost
if labor costs do not change with acres farmed.  Labor required per acre is increased 10% for 500 acres and
decreased 10% for 2000 acres.
9 Machinery charge includes depreciation, interest, insurance, and housing.  Machinery is assumed to be 100% owned and recently purchased.  Tractors and implements increase in size and number as acreage of operation increases.   All machinery is assumed to be used only on operator's farm, no custom work included.  The following page shows the machinery inventory for each size operation.
10 Management charges are greater for more acres due to the likelihood of having more fields/farms to manage and more transporting of equipment.
11 Estimated return that the operator will receive for supplying labor and management skills to the operation.
12 Total return that can be expected for the entire operation.  (Total Returns = return per acre x number of acres)
Machinery Inventory 11
500 Acres  
Number in Inventory Machine Purchase Price ($) Inventory Value       ($) Fuel (gal/A)   Repair Costs ($) # times used
1 Fertilizer Spreader 9,400 9,400 0.13 0.26 1
1 11 ft. Chisel plow 5,200 5,200 1.10 0.34 1
1 18 ft. Cultivator 9,000 9,000 0.60 0.25 1
1 25 ft. drill 25,300 25,300 0.35 1.19 1
1 30 ft. Sprayer 4,500 4,500 0.10 0.28 2
1 Small Combine w/ 15 ft.head 129,200 129,200 1.60 4.87 1
1 185 bu. Gravity Wagons 2,500 2,500 0.60 0.84 1
1 Small Tractor 23,200 23,200 1.94 1
1 Medium Tractor 27,200 27,200 2.28 1
0 Large Tractor 106,600 0
1 Pickup Truck (1/2) 12,500 12,500 0.10   0.05 1
TOTAL 235,500 4.48 12.30
Fixed Cost Expense Rate = 15% Diesel Price ($/gal) = $1.00
Total Annual Fixed Costs = $35,325
Fixed Costs per Acre = $71
1000 Acres
  Number in Inventory Machine Purchase Price ($) Inventory Value      ($) Fuel (gal/A)   Repair Costs ($) # times used
1 Fertilizer Spreader 9,400 9,400 0.13 0.26 1
1 19 ft. Chisel Plow 11,700 11,700 1.10 1.03 1
1 28 ft. Cultivator 14,200 14,200 0.60 0.25 1
1 30 ft. Drill 31,900 31,900 0.35 1.25 1
1 60 ft. Sprayer 6,000 6,000 0.20 0.22 2
1 Medium Combine 136,100 136,100 1.60 3.86 1
2 240 bu. Gravity Wagons 4,000 8,000 0.69 0.23 1
0 Small Tractor 23,200 0 0 0
1 Medium Tractor 27,200 27,200 1.14 1
1 Large Tractor 106,600 106,600 3.84 1
1 Pickup Truck (1/2) 12,500 12,500 0.10   0.05 1
TOTAL 354,200 4.77 12.13
Fixed Cost Expense Rate = 15% Diesel Price ($/gal) = $1.00
Total Annual Fixed Costs = $53,130
Fixed Costs per Acre = $53
2000 Acres
  Number in Inventory Machine Purchase Price ($) Inventory Value      ($) Fuel (gal/A)   Repair Costs ($) # times used
1 Fertilizer Spreader 9,400 9,400 0.13 0.26 1
1 30 ft.Chisel Plow 18,600 18,600 1.10 0.44 1
1 40 ft. Cultivator 14,700 14,700 0.60 0.18 1
1 30 ft Drill 31,900 31,900 0.35 1.26 1
1 60 ft. Sprayer 6,000 6,000 0.20 0.22 2
1 Large Combine 169,700 169,700 1.60 3.21 1
4 240 bu. Gravity Wagons 4,000 16,000 0.69 0.23 1
2 Small Tractor 23,200 46,400 0.49 1
2 Medium Tractor 57,300 114,600 2.4 1
1 Large Tractor 106,600 106,600 2.24 1
1 Pickup Truck (1/2) 12,500 12,500 0.10   0.05 1
TOTAL 537,000 4.77 10.98
Fixed Cost Expense Rate = 15% Diesel Price ($/gal) = $1.00
Total Annual Fixed Costs = $80,550
Fixed Costs per Acre = $40