That's the difference between profit and loss based on benchmarks compiled by consultants Moe Russell andJohn McNutt in the November 2015 Farm Futures Magazine article, "Red Ink Coming, But How Much?" These benchmarks were released at the 2015 FBS User Conference in Moline, Illinois
While land costs are a prominent deciding factor, corn machinery costs varied from $65 to $211 per acre and overall operations costs (adding labor, fuel and custom work credit to the machinery) ranged from $65 to $362 per acre. “In most of my work with clients, if you look at a cost issue, it’s usually erosion across the board — land is too high, machinery cost is high because they’re not pushing enough units through, or buying too much new iron," says McNutt.
Click here for a copy of the Latta Harris/Russell Consulting Group corn-soybean benchmarks andhere to watch a video John and Moe's presentation at the 2015 FBS User Conference.
Editor's note: While very useful in identifying "high level" problems cost benchmark studies like this are usually based on "peanut butter spreading" of labor and machinery costs across all acresregardless of the mix of crops grown or the unique production practices used to grow each commodity. Moreover, operations decisions are ultimately made at the activity level (planting, spreading, spraying, harvesting, trucking, etc.)
To reach that level of accountability, benchmarking and control you need to adopt full activity-based management accounting. More to come on this subject next month.
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